PREMIER VETERINARY GROUP PLC

TRADING UPDATE

London, UK, 29 April 2015- Premier Veterinary Group plc (LSE: PVG) ("PVG" or the "Company") announces a Trading Update.

On 21 November 2014 a Circular was sent to shareholders and subsequently on 26 February 2015 a Prospectus was published in relation to the acquisition of PVG 2007 Limited (formerly Premier Veterinary Group Limited) ("PVGL"). These documents contained financial results for PVGL for the six-month period up to the 31 March 2014. Therefore, in addition to releasing the 2014 Annual Report, the Company is also providing today a Trading Update.  

PVG comprises two distinct but complementary businesses; the operation of veterinary practices and the provision of products and services to third party practices via PVG's wholly owned subsidiary Premier Vet Alliance Limited ("PVA").

HIGHLIGHTS

·      PVG's total revenues increased by 3% to £3.88m for the six months ended 31 March 2015 (£3.76m six months ended 31 March 2014).

·      On 31 March 2015 the trade and assets of WVS Limited ("WVS") (a wholly owned subsidiary of PVG) were sold.  WVS was a sole practice operating outside of PVG's core geographical areas.

·      PVA's revenues for the six months ended 31 March 2015 increased by 18% to £1.07m (£0.91m six months ended 31 March 2014).

·      The number of pets covered by PVA's Pet Care Plan on behalf of third party practices in the UK has increased by 72% to 56,629 as at 31 March 2015 (32,483 as at 31 March 2014).

·      PVA's Pet Care Plan is currently being rolled out across all of Medivet's 114 UK practices pursuant to a three-year agreement.

·      During 2015/16 PVA expects to commence the roll out of PVA's Pet Care Plan in the Nordic region pursuant to an agreement with the largest and fastest growing Nordic operator of companion animal hospitals and veterinary clinics.

·      PVA has directly launched Pet Care Plan in the Netherlands and the Republic of Ireland. To date agreements have been entered into with 29 third party clinics.

·      The number of PVA's buying group members has increased by 10% to 323 as at 31 March 2015 from (305 as at 31 March 2014).

Dominic Tonner, CEO, commented:

"Whilst completing all necessary documentation in relation to the 'reverse' transaction to become a listed company, the PVG team has managed to make considerable progress to introduce further operational efficiencies and conclude a number of commercial agreements which will allow us to build the PVA business in the UK and expand our business into Europe. We anticipate these initiatives will positively impact our revenues during the remainder of the year but significant costs will be incurred in connection with our European expansion plans. 

In addition, as announced today, it is the intention of the Directors to change the year end of Premier Veterinary Group plc from 31 December to 30 September to bring it into line with its subsidiaries. Accordingly, the first results of the Enlarged Group will, therefore, be the unaudited interim results for the six months ended 31 March 2015 which it is anticipated will be released on 29 May 2015, followed by an annual financial report to 30 September 2015."

COMMENTARY

PVG's total revenues increased by 3% to £3.88m for the six months ended 31 March 2015 (£3.76m six months ended 31 March 2014).

Veterinary Practices

On 31 March 2015 the trade and assets of WVS Limited (WVS) were sold for a consideration of £0.2m payable in cash.  After accounting for certain costs it is expected that there will be a positive impact on cash and net assets.  WVS was a sole practice operating outside of PVG's core geographical areas.  For the 6 month period ended 31 March 2015 it generated revenues of £0.095m and incurred a pre-tax loss of £0.012m not taking into account the impact of the sale of the trade and assets.

Revenues for the remainder of PVG's veterinary practices for the six months ended 31 March 2015 were £2.71m broadly in line with the corresponding period last year.  Profitability was however significantly increased (gross profit increased from 45% to 52%) as a result of initiatives put in place during 2014. 

Premier Vet Alliance (PVA)

PVA's revenues for the six months ended 31 March 2015 increased by 18% to £1.07m (£0.91m six months ended 31 March 2014) driven by increased numbers of pets covered by PVA's preventative healthcare plan for companion animals, "Pet Care Plan". Revenue generated from PVA's buying group, which provides independent veterinary practices with enhanced discounts and rebates, was in line with the prior year.

Pet Care Plan (UK)

The number of pets covered by Pet Care Plan in the UK on behalf of third party practices as at 31 March 2015 was 56,629 (32,483 as at 31 March 2014), an increase of 72%.  During this period the monthly cash value of the direct debit collections has increased by 71% to £887,004 (£518,506 31 March 2014). Pet Care Plan is currently being rolled out across all of Medivet's UK practices pursuant to a three year agreement.  Medivet, a limited liability partnership, is the largest privately owned veterinary group in the UK and has 114 practices in the UK.

Pet Care Plan (Rest of Europe)

Revenues from Pet Care Plan covering pets in the rest of Europe will be generated for the first time in the second half of the financial year through a combination of activities:

·      During 2015/16 PVA expects to commence the roll out of PVA's Pet Care Plan in the Nordic region pursuant to an agreement with the largest and fastest growing Nordic operator of companion animal hospitals and veterinary clinics.

·      Through its own initiatives PVA has launched Pet Care Plan in the Netherlands and the Republic of Ireland.  Agreements have been entered into with 29 third party clinics and Pet Care Plan is already providing benefits to pets and their owners in these countries.

A significant investment will be required in connection with these European expansion plans that will have an impact on group profitability.

Buying Group

The number of buying group members has increased from 305 at 31 March 2014 to 323 as at 31 March 2015.  Revenues have remained in line with the prior year.

Administrative Expenses

There will be an increase in administrative expenses as head office costs have increased primarily as a result of the acquisition of PVGL (the "Acquisition") and the listed company status.  

Year-End and Basis of Accounting

As announced today, it is the intention of the Directors to change the year end of PVG from 31 December to 30 September to bring it into line with its subsidiaries. Accordingly the first results of the Enlarged Group will, therefore, be the unaudited interim results for the six months ended 31 March 2015 (which it is anticipated will be released on 29 May 2015), followed by an annual financial report to 30 September 2015.

The Company was, immediately prior to the Acquisition, deemed to be a cash shell and as such was not classified as a business under IFRS 3 Business Combinations and, therefore, the Acquisition is outside the scope of IFRS 3.  As such, in accordance with Listing Rule LR 5.6.4, and by virtue of the relative size of PVGL when compared to the Company, the accounting acquirer has been determined to be PVGL and the accounting acquiree, the Company. The results for the six months ended 31 March 2015 and the year ended 30 September 2015 will, therefore, be prepared on the basis that the Company has been acquired by PVGL and, notwithstanding that the Acquisition was made on 5 February 2015, those results will therefore include the full six months to 31 March 2015 and year to 30 September 2015 of PVGL's trading activities respectively.

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This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.