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Is the National Veterinary Care Ltd (ASX:NVL) share price a buy after its AGM?

The National Veterinary Care Ltd (ASX: NVL) share price could be a buy after the company held its annual general meeting today.

The veterinary clinic operator gave a trading update along with providing a strategic review.

Trading update

The company has now settled 27 clinics since the start of FY19, which represents 41% growth of clinic numbers. This mainly relates to the New Zealand based Pet Doctors acquisition. An additional four clinics will be settled by the end of January 2019, which will bring the total up to 97.

National Veterinary Care said that it has achieved total portfolio organic revenue growth of 2.45% up to the end of October 2018.

Additionally, the veterinary clinic operator revealed that its Wellness Program has grown its membership by 13% since the start of FY19, with an NPS score of just over 75.

Strategy implementation

National Vet Care is working through the integration steps with the Pet Doctors business, which comprises 23 clinics and two training centres.

Management is implementing National Vet Care systems, recognising supplier synergies, reducing office support costs and reviewing the Pet Doctors operations.

Wages will be brought closer to National Vet Care levels and it will consider consolidating & merging clinics that are smaller and close together geographically.

FY19 guidance

Management re-iterated that based on the current initiatives and clinic numbers the full year guidance is for revenue growth of 40% more than last year and the underlying EBITDA margin will be 14.5% to 15%.

National Vet Care is going through a lot of growth and integration at the moment. The current market volatility is hurting small caps in-particular, its share price fell over 3% today.

I think it’s trading attractively at 19x FY18’s earnings. Until it reaches 150 clinics there could be a lot more profit growth to come.

A couple of people have suggested that if the Greencross Limited (ASX: GXL) takeover goes ahead then National Vet Care could acquire some of its standalone clinics. This could be very interesting for the company.

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Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO. The Motley Fool Australia owns shares of and has recommended Greencross Limited. The Motley Fool Australia owns shares of NATVETCARE FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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