Veterinary business National Veterinary Care Ltd (ASX: NVL) reported its half-year result to the market this morning.
National Veterinary Care’s HY20 numbers
The veterinary clinic operator announced that its revenue rose by 30.1% to $69 million. It achieved total portfolio like for like (LFL) organic revenue growth of 2.81% on a rolling 12-month basis.
It expanded its network with the acquisition of four clinics, as well as acquiring one buying group and opening one greenfield clinic.
Looking at the underlying numbers, which management thinks could give a better understanding of the operating profit, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 34% to $10.9 million, the underlying EBITDA margin improved by 60 basis points (0.60%) to 15.9% and the underlying net profit rose by 23.8% to $5 million.
Net profit grew by 75% to $4.1 million and diluted earnings per share (EPS) increased by 62.8% to 6.03 cents.
The company’s Best for Pet Wellness Program continues to be an important business initiative and driver of organic growth and it has grown to more than 28,000 members across the clinic network.
The company reaffirmed its guidance for FY20 for underlying revenue to be above $140 million, which would be growth of more than 20%. The underlying EBITDA margin is expected to be in the range of 15.5% to 16%, which excludes the impact of the AASB 16 Leases accounting standard.
Takeover by VetPartners
On 16 December 2019, National Vet Care announced that it had entered into binding scheme implementation deed with VetPartners. It’s proposed that VetPartners will acquire all of National Veterinary Care’s shares for $3.70 per share in cash.
The takeover still requires certain conditions to be met, including shareholder approval. The proposed transaction is expected to settle in early April.
The National Veterinary Care share price fell 0.3% to $3.67 today.
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Returns as of 6th October 2020
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. 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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