Acquisitions give National Vet Care profit a bounce

National Veterinary Care (ASX:NVL) has posted full-year earnings at the upper end of forecasts, despite a softening of market conditions in the last two months of FY18.

The bottom-line profit of $6.2 million is 42 per cent up on the previous corresponding period, aided by a 26 per cent lift in revenue to $84.2 million.

However, the weaker conditions towards the end of the reporting period hit underlying EBITDA margins which slipped from 18.1 per cent a year ago to 15.9 per cent.

Managing director Tom Steenackers says the second full year of operations for National Veterinary Care was marked by continued growth and consolidation.

It was underpinned by the acquisition of 13 veterinary businesses along the eastern seaboard and the first full year of contribution from the New Zealand operations.

The group has 67 centres in its stable following the settlement of the latest acquisition in Victoria this week. This is up from the 63 listed in the financial results.

"The size of NVL's addressable market within Australia and New Zealand has increased and is now more than $3 billion," says Steenackers.

"The new acquisitions, together with organic growth within the clinics, strong growth in member numbers for the wellness program and a focus on value initiatives and refining our offering through the Management Services and Procurement Group, have all contributed to the FY18 results," he says.

"Our commitment to long-term business growth, and desire to realise synergies as we grow, has seen us invest heavily in our people and systems over the past 12 months.

"At the same time, we have delivered solid revenue and portfolio growth consistently throughout the year.

"With our clear growth strategy and impact of the recent strategic investment in the business, we are well placed to deliver sustainable value to our clients and our shareholders in the years ahead."

Over the first four weeks of the current financial year, National Veterinary Care has reported organic growth of 2.5 per cent on a like-for-like basis in its existing portfolio.

Finance costs rose $152,000 to $1.65 million over the year and group debt has risen from $24.8 million to $34 million.

NVL is paying a final dividend of 3c per share, in line with the payout in FY17.