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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Premier Veterinary Group Plc | LSE:PVG | London | Ordinary Share | GB00BSZLMS59 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 34.50 | 32.00 | 37.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPVG
RNS Number : 6581X
Premier Veterinary Group PLC
28 November 2017
PREMIER VETERINARY GROUP PLC
PRELIMINARY ANNOUNCEMENT
AUDITED FINAL RESULTS FOR THE YEARED 30 SEPTEMBER 2017
London, UK, 28 November 2017 - Premier Veterinary Group plc (LSE: PVG) ("PVG" or the "Company") today announces its audited results for the year ended 30 September 2017.
Dominic Tonner, CEO of PVG commented:
"The progress made in the last 12 months in the UK and European markets, together with the revised strategies now in place to address challenges in the USA, provide a broad basis for delivery of our plans for the forthcoming financial year."
2017 HIGHLIGHTS
-- GBP5.9m net cash proceeds following the disposal -of The Premier Buying Group in April 2017 to support continued investment in the Premier Pet Care Plan business in the US and Europe.
-- 50% increase in contracted clinics with a total of 1,084 clinics in UK, Europe and the US signed up to Premier Pet Care Plan (30 September 2016: 723).
-- 36% increase in global revenues from Premier Pet Care Plan to GBP2,534k for the year ended 30 September 2017 (30 September 2016: GBP1,869k).
-- 35% increase in the number of pets on plan with 188,000 on plan at 30 September 2017 (30 September 2016: 139,000).
-- 29% increase in the number of pets on plan in the UK to 156,000 at 30 September 2017 (30 September 2016: 121,000).
-- 43% increase in the number of global direct debits processed to 2,005,000 in year ended 30 September 2017 (30 September 2016: 1,402,000).
POST PERIOD HIGHLIGHTS
-- On 27 November 2017, PVG entered into a committed facility with Bybrook Finance Solutions Limited ("BFSL") for up to GBP1.5m in unsecured loan notes to be drawn down in three equal tranches from 1 June 2018 to 31 May 2019. This arrangement provides PVG with security of funding whilst at the same time being sufficiently flexible to continue to consider alternative sources of funding. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.
A full copy of the Company's Annual Report and Accounts for the year ended 30 September 2017 (the "Annual Report") will be available shortly on its website at www.premiervetgroup.co.uk within the Investor Relations section. The Annual Report will also be uploaded to the National Storage Mechanism, and will also shortly be available for viewing.
Disclosure & Transparency Rule ("DTR") 6.3.5 requires the Company to disclose to the media certain information from its Annual Report, if that information is of a type that would be required to be disseminated in a half-yearly report. Accordingly, this announcement should be read in conjunction with and is not a substitute for reading the full Annual Report. Together these constitute the information required by DTR 6.3.5, which is required to be communicated in unedited full text through a Regulatory Information Service.
The information included in this announcement is extracted from the Annual Report which was approved by the Directors on 27 November 2017. Defined terms used in the announcement refer to terms as defined in the Annual Report unless the context otherwise requires.
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information, please contact:
Premier Veterinary Group Tel: +44 (0)117 970 4130 plc Dominic Tonner, Chief Executive Officer Will Evans, Chief Financial Officer
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group'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 Group's control that could cause the actual results, performance or achievements of the Group 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 Group's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Group 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 Group'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.
CHAIRMAN'S STATEMENT
Overview and results
I am pleased to report that 2016/17 has seen the Group deliver a solid overall performance despite some operational challenges in the US. In the past financial year, we have grown the business organically to develop and expand our partnerships in overseas territories predominantly in the US, Netherlands and France.
Our focus is the Group's preventative healthcare programme for pets branded Premier Pet Care Plan ("PPCP") where the size of the opportunity is identified as significant. We leverage our strategic partnerships to ensure we deliver preventative healthcare programmes based on equitable principles that benefit pet owners and their pets, veterinary practices, product manufacturers, and distribution.
In March we announced our decision to sell The Premier Buying Group to support our investment and growth plans internationally in both the USA and Europe. The buying group business was sold to Animal Healthcare Services Limited, a subsidiary of US company Henry Schein Inc., in April this year, for a total cash consideration of GBP6.3m which has enabled us to remain focussed on those territories where we see targeted opportunities for growth. We have seen an increase in the uptake in our care plans through clinics across our key strategic territories of the US ("PPCP"), Holland ("Huisdieren Zorg Plan") and France ("Premier VetoPlan").
During the year ended September 2017, we significantly increased our total number of pets on plan to 188,000, a 35% increase on September 2016, and the number of direct debits processed increased by 43% demonstrating the significant progress we have made in executing our strategy.
In these results, following the disposal of Premier Buying Group, references to "continuing" operations are in relation to the PPCP business. Total revenue from continuing operations for the year ended 30 September 2017 was GBP2,534k compared with GBP1,869k last year, an increase of 36%. The loss from continuing operations increased from GBP3,195k to GBP4,269k. This increased loss relates to the investment in sales and training resources and infrastructures in Europe and the US to expand our geographical markets, coupled with expansion in technical resources to support improvements in our technical capabilities.
The profit attributable to equity holders for the year was GBP1,621k compared to a profit of GBP1,824k for the year ended 30 September 2016, after recognising profit on discontinued operations, including the gain on disposal of the buying group, of GBP5,890k. In the year ended 30 September 2016, the Group recognised profit on discontinued operations of GBP5,019k which included the earnings of the Premier Buying Group, and the gain on disposal of the veterinary business.
In our trading updates released on 22 September 2017 and 18 October 2017, the Board highlighted the Company's potential need for funding towards the end of the current financial year. The Company has today entered into a committed facility with Bybrook Finance Solutions Limited ("BFSL"), whose sole shareholder is Rajan Uppal, a director of PVG. The facility provides the Company with a level of certainty of funding while also providing flexibility to continue to assess other funding options which could be used to refinance this facility in due course, should they provide better value to shareholders. Further details on the facility are provided within the operational and financial review.
At present the intention is that no dividends will be paid by the Company. This position will be reviewed if future activities lead to significant levels of distributable profits, taking into account any earnings to be reinvested in the Group's business, of which there can be no assurance.
Governance and management
The Board remains committed to maintaining the highest standards of transparency, ethics and corporate governance whilst also providing leadership controls and strategic oversight to ensure that we deliver value to all shareholders. Board evaluations helps us identify areas where we can enhance effectiveness and we continue to ensure we have the relevant skills and experience on the Board to make a difference to Board discussions. Since the end of the financial year, Iain Ross resigned as a non-executive Director from the Board due to other commitments and we thank Iain for his services to the Company, and wish him all the best in his future endeavours.
During the year we were also pleased to have appointed Investec Bank plc as the Company's Corporate Broker and Financial Adviser in February 2017 and PricewaterhouseCoopers LLP as the Company's acting Auditors, for which formal appointment is proposed for approval by Shareholders at the Company's forthcoming Annual General Meeting.
Looking ahead
The Board believes that continued growth in the number of pets on plan will be achieved in the established UK market and in Europe. The US market represents the largest single opportunity for additional growth. The outcome of the initiatives and enhancements implemented to address the different approach to certain elements of the provision of preventative healthcare plans in the US will become evident during the course of the current financial year.
I would like to take this opportunity of thanking the shareholders for their continued support, and also to thank our management team and staff under the leadership of our CEO, Dominic Tonner, for their outstanding commitment and contribution to the success of the business which you will read about in the Strategic Report.
I look forward to updating you on future developments.
Juliet Thompson
Chairman
Premier Veterinary Group plc
27 November 2017
OUR STRATEGY
The overall strategy for the business remains consistent and the Group's objectives are to:
-- leverage the success of the PVA business -- develop the business through its global strategic partnerships and growing data set -- continued investment in PVA's global transaction platform -- develop new opportunities for growth
The Board continually evaluates how best to achieve these objectives.
Leverage the success of PVA
The PPCP business was started by PVA in 2010 in the UK and has been grown organically to become a sustainable, cash generative business in the UK with continuing opportunities for growth. There are significant opportunities to leverage the intellectual property which has been developed in the UK business and exists in our systems and processes to expand PPCP to international markets. The Group has undertaken significant amounts of research to identify countries with similar economic and socio-demographic characteristics relevant to the PPCP business and has identified a number of territories which are likely to embrace the PPCP offering, most notably in mainland Europe and the US.
PVA also started the Premier Buying Group ('PBG') in 2010 and had successfully grown that business to generate annual revenues in excess of GBP1m. During the year the Board concluded that, given the significant growth opportunities for PPCP in the UK and internationally, management should focus the entirety of its efforts on developing the PPCP business and decided to dispose of PBG. On 30 April 2017, the Group completed the sale of the business, trade and assets of the PBG to Animal Healthcare Services Limited, a subsidiary of Henry Schein, Inc. for a cash consideration of GBP6.3million. The net proceeds from the disposal provide additional funding required for the PPCP expansion.
PVA has been successful in implementing its international growth strategy for PPCP. Its first significant investment overseas was in the Netherlands, branded as Huisdieren Zorg Plan ("HZP"), which started during 2015. HZP now has 24,000 pets on plan and is expected to become profitable during the financial year ending 30 September 2018. Operations were established in the US during the second half of financial year ended 30 September 2016 and the first clinics were launched in September 2016. Since then 198 clinics have signed contracts to launch PPCP, and 92 have actually been launched. The business started operating in France during this financial year and whilst it is early days in developing the market, 50 clinics have signed contracts and 33 of those have launched PPCP.
Develop the business through its global strategic partnerships and growing data set
The business has significant long-term relationships with global pharmaceutical manufacturers, buying groups and distribution that operate in the animal sector. These relationships are vital in establishing PPCP in new territories.
Furthermore the substantial data sets that the business has been building over previous years provide insight to work with our strategic partners to develop our businesses, strengthen relationships and identify opportunities for future value creation. The Group's IT investment programme will continue building a significant data set to help with planning and be of value to our partners.
In the last twelve months, we have been successful in signing a number of cooperation agreements with significant manufacturers, buying groups and distribution in Netherlands, France and the US.
Continued investment in PVA's global transaction platform
The investment required to capture the significant international opportunities is considerable both in establishing operations in each territory but also in developing the IT and back office support to deliver a consistent, high quality customer experience in every territory.
The group expects to continue to invest in the global transaction platform and portal which will help generate more revenue, create bigger barriers to entry for any competition and deliver competitive advantage.
Develop new opportunities for growth
Notwithstanding the significant consolidation of veterinary practices that is taking place in the UK, the market in the UK and overseas is still fragmented and the directors believe that, by adopting an opportunistic and entrepreneurial approach, the Group will be in a position to identify and exploit new opportunities for growth.
OPERATIONAL AND FINANCIAL REVIEW
Chief Executive's overview
In this financial year we have continued to pursue our strategy of targeted geographical expansion in order to increase the Group's growth potential. Following a careful evaluation process, we have invested in our target markets, in sales and training resources to promote growth. Further investment in our IT and Finance teams has been made to ensure that the business delivers a high quality customer experience and to build on our technical competitive advantage.
The Group continues to invest in the development of its bespoke software system to facilitate the worldwide operation of Premier Pet Care Plan, and the Group is pleased to report that this transaction platform is fully functioning and operating to specification in UK, Mainland Europe and the US. The Group will continue to add functionality to the platform, after careful assessment, with the intention of developing further revenue generating opportunities, creating bigger barriers to entry and delivering competitive advantage. In addition, the collection and validation of significant data sets has been building over previous years and may create further value for the business.
This continued investment was supported in part through the successful disposal of PBG, which not only left the Group in a debt-free position but has also enabled our management to focus on the development and expansion of Premier Pet Care Plan, for which we have been encouraged by the consistent growth in the number of pets on plan.
Our markets
In order to deliver our international expansion strategy, our business is organised in to the three regions of UK, Europe and the USA.
UK
The UK business has performed well this year and in line with our expectations. The number of pets on plan grew in the financial year from 121,000 to 156,000. The number of pets on plan has grown by 29% on the same period last year. The UK business is well established, cash generative and continues to see opportunities for growth from its existing customer base and new customer opportunities.
During the year, the majority of the UK customer base has been migrated on to the global portal as part of the strategy to implement a standard global processing portal. Whilst enabling operational efficiencies for the business, the new portal also enables customers to access more real time information on the performance of PPCP in each clinic.
We announced last year that we had signed a three-year extension to our existing contract with Medivet Group Limited ("Medivet") for the provision of Premier Pet Care Plan to all Medivet's new and existing practices in the UK. Medivet, now operates out of 169 clinics spread across the country.
The UK business currently has 575 clinics signed up to the Premier Pet Care Plan and management recognises that there are good opportunities for further growth both within the UK independent veterinary market of approximately 3,500 clinics and by leveraging the strategic relationships the business has with manufacturers and distribution.
Europe
In Europe the number of pets on plan has grown from 18,000 to 28,000, an increase of 56% on the same period last year. During the year we have migrated all of our European customers on to the global portal and this has made significant improvements in the customer service experience.
In the Netherlands, our most significant territory in Europe where we operate under the HZP brand, the number of pets on PPCP has grown by 46% in the last year to 24,000. In September 2017, we acquired the customer base of a small competitor in this region providing an opportunity for HZP to migrate and launch these customers on to our global platform. Initial meetings with these potential customers are encouraging and all of the customers that have been contacted to date have agreed to transfer to HZP. At the end of September 2017, HZP had 190 contracted clinics and with opportunities presented by the customer base acquisition is well placed to exceed 200 contracted clinics in the foreseeable future.
The available market for preventative healthcare programmes for pets across the Netherlands is estimated at 1,100 veterinary practices, and an estimated 1.6 million dogs and 2.6 million cats (Source: FEDIAF - 2012). Substantial opportunities remain available for further growth in the Dutch market.
The available market for preventative healthcare programmes for pets across France is estimated at over 7 million dogs - similar to the UK - and over 11 million cats - more than 30% higher than the UK (Source: FACCO, France). There are approximately 6,000 veterinary practices in France.
Our operation in France is branded as Premier Veto Plan ("PVP"). We started operating in this territory in the current financial year and this territory is showing encouraging signs. 50 clinics have signed contracts and 33 of those have launched PPCP. PVP now has just over 1,000 pets on plan which is a good performance given the relatively short period of time that clinics have been launched.
In France, as part of the strategy to leverage relationships, we signed an agreement in February 2017 with MSD Animal Health (a wholly owned subsidiary of Merck & Co., Inc.), who are the second largest global manufacturer serving this market. This agreement results in their representatives identifying and supporting practices which are interested in launching PVP and has proven to be an important source of leads to establish PVP in France.
In October 2017, we entered into an agreement with Clubvet, one of France's largest buying groups, with approximately 300 members. This is a cooperation agreement by which each party will promote the other's services to develop the sales pipeline.
Within Europe, we have decided to focus our resources to further grow our established business in the Netherlands and developing the operations in France. The business in the Netherlands is expected to become profitable in the financial year ending 30 September 2018, demonstrating our ability to develop profitable operations through organic growth.
USA
The available market for preventative healthcare programmes for pets across the US is estimated at 70 million dogs and 74 million cats (U.S. Pet Ownership & Demographics Sourcebook 2012).
The business started its services in the US in September 2016. Since that time significant progress has been achieved as outlined below:
-- the number of pets on plan has increased to 4,000 as at 30 September 2017.
-- contracts have been signed with 198 clinics to implement PPCP. 92 clinics have been launched with the remainder in the launch pipeline.
-- a number of cooperation agreements have been signed with major distributors and Group Purchasing Organisations (buying groups) who promote PPCP and develop our sales pipeline, including:
- Purchases Services Holdings LLC ("PSI") - a Group purchasing organisation with over 4,000 members
- The Veterinary Cooperative ("TVC") - a Group purchasing organisation with over 3,000 members
- Midwest Veterinary Supply Inc - one of the largest regional distributors in the US with a client base of 10,000 veterinary hospitals across the Mid-West and South East of the US.
- Merritt Veterinary Supplies Inc. ("MVS") - a leading veterinary supplies distributor which has 9,000 member hospitals in the south east of the US.
- Veterinary Products, Inc. ("VPI"), - a veterinary distributor co-op with over 600 member hospitals located primarily in the south east of the US.
-- the operational infrastructure has been expanded to address the demand and geographical reach of opportunities in the US.
-- the business is registered in 22 states with the bulk of operations focussed in the mid-west and south-eastern states.
Whilst we have made significant progress in this territory, we have identified during the year a number of differences between the UK and US markets which have necessitated a different approach to certain elements of the provision of preventative healthcare plans in the US. The key difference relates to the sensitivity to working capital in US veterinary hospitals. This sensitivity had resulted in both the rate of clinic sign up reducing and a more substantial reduction in the rate of pet sign ups after the initial launch than has been experienced in other regions. A number of initiatives were implemented to address these issues.
These initial changes resulted in increased activity in clinics signing up to PPCP and the level of clinic sign ups in June through to August 2017 has been the highest that has been achieved since starting operations in the US. However, the initiatives that have been implemented are taking longer than originally expected to reverse the slowdown in pet sign up rates after the initial launch and further enhancements are now being implemented.
Following a recent review, the Board has decided to focus the Group's US resources in the mid-west and south-eastern states, where it has its largest presence, until such time that the changes the Group is implementing to improve sign up rates take effect and are sustained. The business will continue to service existing customers in all regions. The decision to focus the Group's resources will be reflected in a lower and slower growing cost base than previously envisaged.
The US remains a key focus for the business representing our largest growth opportunity.
Financial review
The following review should be read in conjunction with the financial statements and related notes in the Annual Report.
The Group disposed of Premier Buying Group ("PBG") on 30 April 2017 and accordingly the results of PBG are treated as discontinued in the financial statements. Following the disposal of PBG, the principal activity of the business is PPCP and any references to continuing operations are in relation to the PPCP business.
The Group's total revenue from continuing operations for the year ended 30 September 2017 was GBP2,534k, an increase of 36% (2016: GBP1,869k). This growth was driven by an increased number of fee generating pets on plan throughout the year.
The tables below show the revenues and operating results from each of the geographical regions in which the business now operates.
Hot Features
Premium
GBP000s Revenue
--------------- --------------
2017 2016
--------------- ------ ------
PPCP - UK 1,873 1,606
--------------- ------ ------
PPCP - Europe 493 263
--------------- ------ ------
PPCP- USA 168 -
--------------- ------ ------
Total 2,534 1,869
--------------- ------ ------
GBP000s Operating profit/(loss)
----------------------------------------- --------------------------
2017 2016
----------------------------------------- ------------ ------------
EBITDA*
----------------------------------------- ------------ ------------
PPCP - UK 622 442
----------------------------------------- ------------ ------------
PPCP - Europe (983) (809)
----------------------------------------- ------------ ------------
PPCP- USA (1,895) (635)
----------------------------------------- ------------ ------------
Total EBITDA from PPCP (2,256) (1,002)
----------------------------------------- ------------ ------------
Central unallocated costs (1,546) (1,908)
----------------------------------------- ------------ ------------
Total EBITDA from continuing operations (3,802) (2,910)
----------------------------------------- ------------ ------------
One-off items (172) -
----------------------------------------- ------------ ------------
Depreciation and amortisation (134) (77)
----------------------------------------- ------------ ------------
Finance expenses (161) (208)
----------------------------------------- ------------ ------------
Loss from continuing operations (4,269) (3,195)
----------------------------------------- ------------ ------------
*EBITDA represents earnings before interest, tax, depreciation and amortisation
In the UK, PPCP revenues are up by 17% to GBP1,873k (2016: GBP1,606k). EBITDA generated by the PPCP business in the UK has increased by 41% to GBP622k (2016: GBP442k). This increase has been achieved despite an increased level of investment in Finance and IT resources.
In Europe, PPCP revenues are up by 87% to GBP493k (2016: GBP263k). The EBITDA loss in Europe increased from GBP809k loss to GBP983k loss. This has resulted from the investment in operations in France and initial costs invested in other European territories.
In the US, PPCP revenues of GBP168k have been generated. As noted elsewhere in the strategic report, significant investment has been made during the year in the US business resulting in an overall EBITDA loss in the territory of GBP1,895k (2016: EBITDA loss of GBP635k).
Central unallocated costs have reduced in the year predominantly as Executive Directors will not receive a bonus for the financial year ended 30 September 2017.
One-off items relate to expenses that were incurred in relation to (i) mobilising the cooperation agreements in the US including significant travel, relocation and recruitment expenses and (ii) legal expenses incurred in relation to the acquisition of the competitor customer base in the Netherlands.
Interest costs for the year were GBP161k (2016: GBP208k) which includes an early repayment charge of GBP74k.
The loss from continuing operations increased from GBP3,195k to GBP4,269k, as explained by the operational changes above, but partially mitigated by the reduction in interest costs.
Profits on discontinued operations before central costs were GBP303k, representing profits from PBG up to the point of disposal.
The gain on disposal of PBG before tax of GBP5,843k represents gross proceeds of GBP6,300k less expenses of GBP378K and net assets disposed of GBP79k. In the year ended 30 September 2016 the Group recognised a gain on disposal of the veterinary business of GBP4,253k. The Group has recognised a total tax charge resulting from the gain of GBP256k, GBP132k relating to current tax and GBP124k relating to deferred tax. The taxable gain has been reduced by utilising brought forward tax losses which had not previously been recognised and claiming rollover relief where available. The use of rollover relief gives rise to the deferred tax charge.
As a result of the profits on disposal in each financial year, the Group generated a profit for the year of GBP1,621k (2016: GBP1,824k).
The Group has invested and capitalised GBP196k (2016: GBP221k) in its bespoke software system to facilitate the worldwide operation of Premier Pet Care Plan. Similar levels of capital investment are anticipated in the coming year. In addition to this, the Group has expensed GBP390k (2016: GBP190k) of salary and other costs to develop and refine the overall transaction processing platform and customer portal.
The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Group to the fund and into personal arrangements in respect of the period.
Net assets were GBP3,307k at 30 September 2017 (at 30 September 2016: net assets of GBP1,638k).
As at 30 September 2016 the Group had issued GBP900k of unsecured Loan Notes. A further GBP350k of unsecured loan notes were issued in January 2017. Following the disposal of Premier Buying Group, part of the proceeds were used to repay the loan notes.
At 30 September 2017, the Group had cash balances of GBP3,218k (2016: GBP1,254k) and no debt (2016: debt of GBP900k).
Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group made a loss from continuing operations of GBP4,269k in the year ended 30 September 2017 and ended the year with net assets of GBP3,307k. As at 30 September 2017, the Group had cash and short term deposits of GBP3,218k.
In order to ensure that the Group has sufficient cash resources for the foreseeable future PVG has today entered into an arrangement with Bybrook Finance Solutions Limited ("BFSL") whereby BFSL has agreed to provide up to GBP1.5m in unsecured loan notes to be drawn down in three equal tranches from 1 June 2018 to 31 May 2019. PVG has the right to cancel the commitment at any time before drawdown without penalty. Any amounts drawn down are repayable after two years unless PVG opts to repay earlier by giving not less than three months' notice. The facility attracts a monthly charge of 0.5% on any amounts committed which increases to 1% per month for any amounts drawn. This arrangement provides PVG with security of funding whilst at the same time being sufficiently flexible to consider alternative sources of funding. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.
The directors consider that with its current cash reserves and the additional funds available from the committed funding facility that the Group has sufficient resources to meet all current liabilities as they fall due. After consideration of market conditions, the Group's financial position, the Group's forecasts and projections, which allow for reasonable possible changes in trading performance and after making enquiries, the directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements.
Outlook
The global preventative healthcare market for pets continues to show positive signs, with international consolidators, independent hospitals, distribution and manufacturers all recognizing the benefits it brings to their businesses.
The established UK and developing European markets provide ongoing development in the number of pets on plan. The Group has built a profitable cash generative PPCP business in the UK and is replicating this model in the Netherlands where we expect to become profitable during the coming financial year. The fledgling French business is showing early promise where our relationship with MSD will play an important role for both parties.
The US market continues to represent the largest single opportunity for additional growth. Initiatives and enhancements have been implemented to address the different approach to certain elements of the provision of preventative healthcare plans in the US, the outcome of which will become evident during the course of the current financial year.
The progress made in the last 12 months in the UK and European markets, together with the revised strategies now in place to address challenges in the USA, provide a broad basis for delivery of our plans for the forthcoming financial year. The Group expects to continue to invest in the global transaction platform and portal, which will help generate more revenue, create bigger barriers to entry for any competition and deliver competitive advantage. Our employees are one of our key strengths, and I am delighted that we have been able to attract and retain such a high calibre of staff both in the UK and in our overseas operations to enable delivery of our ongoing expansion strategy.
I look forward to announcing future developments throughout the coming 12 months.
Dominic Tonner
Chief Executive Officer
Premier Veterinary Group plc
27 November 2017
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Annual Report, Directors' remuneration report and the financial statements in accordance with applicable laws and regulations.
Company law requires the directors to prepare such financial statements for each financial year. Under that law the directors are required to prepare financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union ("EU"). Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that period. In preparing these financial statements, the directors are required to:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
-- provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
-- make an assessment of the Company's and the Group's ability to continue as a going concern.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's and the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and Article 4 of IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's and the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The directors confirm that:
(a) the Company and the Group financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the profit of the Group and of the assets, liabilities and financial position of the Company and Group taken as a whole;
(b) the Annual Report, including the Strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that it faces; and
(c) the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's performance, business model and strategy.
By order of the Board
Juliet Thompson Dominic Tonner Director Director 27 November 2017 27 November 2017
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR YEARED 30 SEPTEMBER 2017
Year Year
ended ended
30 September 30 September
2017 2016
(restated*)
Note GBP'000 GBP'000
Revenue 4 2,534 1,869
Cost of sales (74) (42)
--------------- ---------------
Gross profit 2,460 1,827
Administrative expenses (6,568) (4,814)
--------------- ---------------
Loss from operations (4,108) (2,987)
Finance expense (161) (208)
--------------- ---------------
Loss before income tax (4,269) (3,195)
Income tax (expense)/credit - -
--------------- ---------------
Loss from continuing operations (4,269) (3,195)
Profit on discontinued operations,
net of tax 5 5,890 5,019
Profit and total comprehensive
income for the year attributable
to equity holders of the parent
company 1,621 1,824
=============== ===============
(Loss) per share for loss from
continuing operations attributable
to the owners of the parent during
the year:
Basic (pence) 6 (28.2) (22.4)
Diluted (pence) 6 (27.6) (20.4)
--------------- ---------------
Earnings per share for profit
attributable to the owners of
the parent during the year:
Basic (pence) 6 10.7 12.8
Diluted (pence) 6 10.5 11.7
--------------- ---------------
* Prior year comparatives have been restated to include the results of the Premier Buying Group in discontinued operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2017
As at As at
30 September 30 September
2017 2016
Note GBP'000 GBP'000
Non-current assets
Property, plant and equipment 63 80
Other intangible assets 432 366
Total non-current assets 495 446
Current assets
Trade and other receivables 7 705 1,719
Cash and cash equivalents 3,218 1,254
-------------- --------------
Total current assets 3,923 2,973
Total assets 4,418 3,419
============== ==============
Equity attributable to equity
holders of the Company
Called up share capital 1,535 1,491
Share premium 5 1
Share based payments reserve 35 35
Reverse acquisition reserves 3,671 3,671
Accumulated losses (1,939) (3,560)
-------------- --------------
Total equity 3,307 1,638
Current liabilities
Trade and other payables 845 871
Current tax liabilities 132 -
Total current liabilities 977 871
Non-current liabilities
Financial liabilities 8 - 900
Deferred tax provision 134 10
-------------- --------------
Total non-current liabilities 134 910
Total liabilities 1,111 1,781
Total equity and liabilities 4,418 3,419
============== ==============
The financial statements were approved and authorised for issue by the Board and authorised for issue on 27 November 2017. They were signed on its behalf:
Dominic Tonner Juliet Thompson Director Director 27 November 2017 27 November 2017
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2017
Called Share
up based Reverse
Share Share payments acquisition Accumulated Total
capital premium reserve reserve losses equity
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as
at 1 October
2015 3,279 118,947 20 (117,159) (5,384) (297)
Transactions
with owners:
Capital restructure (1,883) (118,947) - 120,830 - -
Shares issued
(options exercised) 95 1 - - - 96
Credit to
equity for
share
based compensation - - 15 - - 15
--------- ---------- ---------- ------------- ------------ --------
(1,788) (118,946) 15 120,830 - 111
Profit and
total comprehensive
income for
the year: - - - - 1,824 1,824
Balance as
at 30 September
2016 and 1
October 2016 1,491 1 35 3,671 (3,560) 1,638
Transactions
with owners:
Shares issued
(options exercised) 44 4 - - - 48
44 4 - - - 48
Profit and
total comprehensive
income for
the year: - - - - 1,621 1,621
Balance as
at 30 September
2017 1,535 5 35 3,671 (1,939) 3,307
========= ========== ========== ============= ============ ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 SEPTEMBER 2017
Year ended Year ended
30 September 30 September
2017 2016
(restated)
GBP'000 GBP'000
Cash flows from:
Continuing operating activities
Loss before income tax (4,269) (3,195)
Finance expense 161 208
Share based payment - 15
Depreciation of property, plant and equipment 26 23
Amortisation of intangible assets 108 69
Decrease/(increase) in trade and other receivables 14 (141)
Decrease in trade and other payables (88) (25)
---------------------------- ----------------------------
Cash used in continuing operations (4,048) (3,046)
Discontinued operating activities 338 881
---------------------------- ----------------------------
Cash used in operations (3,710) (2,165)
Income taxes
---------------------------- ----------------------------
Net cash used in operating activities (3,710) (2,165)
Investing activities
Purchase of PPE (25) (61)
Proceeds from disposal of PPE - 76
Purchase of Intangible assets (251) (225)
Purchase of business combinations (net of cash acquired) - -
---------------------------- ----------------------------
Net cash used in continuing investing activities (276) (210)
Discontinued investing activities 6,963 5,047
---------------------------- ----------------------------
Net cash generated from investing activities 6,687 4,837
Financing activities
Issue of new shares (net of costs) 48 97
Loan notes issued and other loans received 350 900
Repayment of loan notes (1,250) (2,575)
Repayment of loan redemption fee - (400)
Repayment of bank loans - -
Payment of finance leases - (30)
Interest paid (161) (73)
---------------------------- ----------------------------
Net cash used in continuing financing activities (1,013) (2,081)
Discontinued financing activities - -
---------------------------- ----------------------------
Net cash used in financing activities (1,013) (2,081)
Net increase in cash and cash equivalents 1,964 591
Cash and cash equivalents at beginning of year 1,254 663
Cash and cash equivalents at end of year 3,218 1,254
============================ ============================
Shown as:
Cash and cash equivalents in continuing activities 3,218 1,254
Cash and cash equivalents in discontinued activities - -
3,218 1,254
============================ ============================
* Prior year comparatives have been restated to include the results of the Premier Buying Group in discontinued operations.
SELECTED NOTES TO THE FINANCIAL INFORMATION
1 Presentation of financial information
These results for the year ended 30 September 2017 are an excerpt from the Annual Report and do not constitute the Company's statutory accounts for the years ended 30 September 2017. PricewaterhouseCoopers LLP reported on the accounts for the year ended 30 September 2017. Their report for the year ended 30 September 2017 was unqualified and did not contain statements under Sections 498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.
Whilst the financial information included in this annual results release has been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRS. Full Financial Statements that comply with IFRS are included in the Annual Report which will be available at www.premiervetgroup.co.uk and hard copies distributed in due course.
2 Going concern
The consolidated financial statements have been prepared on a going concern basis. The Group made a loss from continuing operations of GBP4,269k in the year ended 30 September 2017 and ended the year with net assets of GBP3,307k. As at 30 September 2017, the Group had cash and short term deposits of GBP3,218k.
In order to ensure that the Group has sufficient cash resources for the foreseeable future PVG has today entered into an arrangement with Bybrook Finance Solutions Limited ("BFSL") whereby BFSL has agreed to provide up to GBP1.5m in unsecured loan notes to be drawn down in three equal tranches from 1 April 2018 to March 2019. PVG has the right to cancel the commitment at any time before drawdown without penalty. Any amounts drawn down are repayable after two years unless PVG opts to repay earlier by giving not less than three months' notice. The facility attracts a monthly charge of 0.5% on any amounts committed which increases to 1% per month for any amounts drawn. This arrangement provides PVG with security of funding whilst at the same time being sufficiently flexible to consider alternative sources of funding. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.
The directors consider that with its current cash reserves and the additional funds available from the committed funding facility that the Group has sufficient resources to meet all current liabilities as they fall due. After consideration of market conditions, the Group's financial position, the Group's forecasts and projections, which allow for reasonable possible changes in trading performance and after making enquiries, the directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements.
3 Employee remuneration
Year ended 30 September 2017 Year ended 30 September 2016
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Wages and salaries 3,491 106 3,597 2,287 292 2,579
Social security costs 242 17 259 261 18 279
Other pension costs 30 - 30 15 1 16
Share based payment expense - - - 15 - 15
----------- ------------- -------- ----------- ------------- --------
3,763 123 3,886 2,578 311 2,889
----------- ------------- -------- ----------- ------------- --------
The average monthly number of employees during the period was as follows:
Year ended 30 September 2017 Year ended 30 September 2016
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Staff and directors 58 2 60 40 27 67
----------- ------------- -------- ----------- ------------- --------
4 Segmental reporting
Management have defined operating segments as those on which results are considered by the Chief Executive Officer. Central administrative expenses (including amortisation, impairment and depreciation), finance costs and income tax expenses are monitored centrally and are not allocated to operating segments. Further to this, assets and liabilities are not allocated to operating segments as they are shared by the Group. These operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results.
The Premier Pet Care Plan ("PPCP") business is organised in three geographical regions as follows:
-- PPCP United Kingdom -- PPCP Europe (including Republic of Ireland) -- PPCP US
All revenue is derived from external customers.
Prior to disposal the Premier Buying Group and Veterinary business were separate operating segments.
Prior year comparatives have been restated to include the results of the Premier Buying Group in discontinued operations.
Total
PPCP PPCP Continuing Discontinued
UK PPCP Europe US operations operations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended
30 September
2017
Group's
revenue
per consolidated
statement
of comprehensive
income 1,873 493 168 2,534 579 3,113
Gross profit 1,839 467 154 2,460 579 3,039
Administrative
expenses (1,266) (1,533) (2,223) (5,022) (276) (5,298)
-------- ------------ -------- ------------ ------------- --------
Profit/(loss)
before central
costs 573 (1,066) (2,069) (2,562) 303 (2,259)
Central
unallocated
administrative
costs (1,546) - (1,546)
Gain on
disposal - 5,843 5,843
Finance
expense (161) - (161)
Tax on gain
on disposal - (256) (256)
------------ -------------
(Loss)/Profit
before income
tax (4,269) 5,890 1,621
============ ============= ========
Year ended
30 September
2016
Group's
revenue
per consolidated
statement
of comprehensive
income 1,606 263 - 1,869 2,371 4,240
======== ============ ======== ============ ============= ========
Gross profit 1,573 254 - 1,827 1,838 3,665
Administrative
expenses (1,164) (1,107) (635) (2,906) (910) (3,816)
-------- ------------ -------- ------------ ------------- --------
Profit/(loss)
before central
costs 409 (853) (635) (1,079) 928 (151)
Central
unallocated
administrative
costs (1,908) - (1,908)
Gain on
disposal - 4,091 4,091
Finance
expense (208) - (208)
------------ -------------
(Loss)/Profit
before income
tax (3,195) 5,019 1,824
============ ============= ========
All Group Non-Current assets are located in the UK.
Year Year
ended 30 ended 30
September September
2017 2016
Revenue GBP'000 GBP'000
Denmark 46 27
Ireland 19 45
Netherlands 394 171
France 32 -
Germany 2 -
Sweden - 20
USA 168 -
UK 1,873 1,606
--------------- ----------------
Continuing 2,534 1,869
Discontinued - UK 579 2,371
Total 3,113 4,240
=============== ================
5 Discontinued operations
During the year ended 30 September 2016, the Group disposed of its veterinary practices and accordingly the results of this business were presented as discontinued operations.
During the financial year ending 30 September 2017, the Board agreed to the disposal of the Premier Buying Group. The disposal was completed on 30 April 2017.
The results of discontinued operations during the year ended 30 September 2017 included the results of the Premier Buying Group up to the point of disposal and the gain recognised on disposal. The results for discontinued operations for the year ended 30 September 2016 have been restated to include the results of the Premier Buying Group during that period along with the results of the veterinary practices.
Year ended Year ended
30 September 30
2017 September 2016
GBP'000 GBP'000
Result of discontinued
operations
Revenue 579 2,371
Expenses other than
finance costs (276) (1,443)
Gain on disposal 5,843 4,091
Income tax on gain (256) -
-------------- --------------------
Profit for the year 5,890 5,019
============== ====================
Year ended Year
30 September ended 30 September
2017 2016
Earnings per share
from discontinued
operations
Basic earnings per
share (pence) 38.9 35.2
Diluted earnings per
share (pence) 38.1 32.1
Year ended Year ended
30 September 30 September
2017 2016
GBP'000 GBP'000
Cash flows used in
discontinued operations
Operating activities 338 881
Investing activities - (74)
Financing activities - -
-------------- --------------------
Net cash from discontinued
operations 338 807
============== ====================
6 Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. For the purposes of this calculation, the weighted average number of shares is the number of ordinary shares in the period, excluding deferred shares, incorporating the reorganisation of share capital set out in note 18 as if it had taken effect on 1 October 2016.
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potentially dilutive ordinary shares.
Year ended 30 September Year ended 30 September
2017 2016
Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/Profit
for the year (4,269) 5,890 1,621 (3,195) 5,019 1,824
No. No. No. No. No. No.
Weighted
average number
of shares
used in basic
earnings
per share 15,130,373 15,130,373 15,130,373 14,263,344 14,263,344 14,263,344
Effect of
dilutive
potential
ordinary
shares from
share options
and warrants 348,595 348,595 348,595 1,362,641 1,362,641 1,362,641
------------- ------------- ------------- ------------- ------------- -------------
Weighted
average number
of shares
used in diluted
earnings
per share 15,478,968 15,478,968 15,478,968 15,625,985 15,625,985 15,625,985
------------- ------------- ------------- ------------- ------------- -------------
For continuing operations potential ordinary shares from share options are non-dilutive.
7 Trade and other receivables
As at 30 September 2017 As at 30 September 2016
GBP'000 GBP'000
Trade receivables 457 412
Other receivables - 1,154
Prepayments and accrued income 248 153
------------------------ ------------------------
705 1,719
------------------------ ------------------------
All amounts are considered to be receivable within one year. The net carrying value of trade and other receivables is considered a reasonable approximation of fair value.
The ageing analysis of trade receivables is as follows. Management consider none of the receivables to be impaired.
As at 30 September 2017 As at 30 September 2016
GBP'000 GBP'000
Up to 3 months 223 351
3 to 6 months 234 61
6 to 12 months - -
More than 12 months - -
------------------------ ------------------------
457 412
------------------------ ------------------------
Trade and other receivables have not been discounted. The accrued income has not been discounted.
Included within other receivables is GBPNil (2016 - GBP1,000,000) held in escrow in relation to deferred consideration for the Vet Group disposal.
8 Financial liabilities
As at 30 As at 30
September September
2017 2016
GBP'000 GBP'000
Non-current
Loan notes - 900
- 900
-------------------------- -------------
Following the disposal of the Premier Buying Group on 30 April 2017 the prior year non-current loan note balances of GBP900,000 were repaid.
On the 26 January 2017 the Company issued GBP350,000 of unsecured loan notes to Bybrook Financial Services Limited ("BFSL"). The Company had the right to repay the loan note in full or in part before maturity. Following disposal of the PBG, the outstanding loan notes to BFSL were repaid in full as well as early repayment fees of GBP74,000, being interest on the unexpired period.
On 3 May 2017 the Company repaid the loan note to BFSL of GBP350,000 in full.
As at 30 September As at 30
2017 September
2016
Ageing of bank and other
loans: GBP'000 GBP'000
Repayable within 1 - 2
years - 900
- 900
----------------------------------------------- -----------
9 Share capital
On 31 August 2016 the merger reserve, included within the reverse acquisition reserve, was capitalised by a bonus issue of deferred shares with a nominal value of 90 pence. Following an application to the high court an order was passed to complete a capital restructure which cancelled 3,782,766 deferred shares held at a value of GBP3,404,000 and cancelled share premium held at a value of GBP118,947,000. The accounts present retained earnings as a continuation of the consolidated financial statements of PVG 2007 Limited (formerly Premier Vet Group Limited) and share capital and premium as the parent company equity, as explained in note 2 (Basis of preparation). Therefore as the transaction relates to the parent company equity the cancellation has been recorded in the reverse acquisition reserve.
Ordinary shares Deferred shares Total
No. GBP'000 No. GBP'000 GBP'000
Shares at 1 October
2015 (Ordinary
10 pence, deferred
90 pence) 13,951,773 1,396 2,092,766 1,883 3,279
Share options
exercised 955,660 95 - - 95
Capitalisation
of merger reserve 1,690,000 1,521 1,521
Capital restructure - - (3,782,766) (3,404) (3,404)
Shares at 30
September 2016
(Ordinary 10
pence) 14,907,433 1,491 - - 1,491
Share options
and warrants
exercised 439,517 44 - - 44
Shares 30 at
September 2017
(Ordinary 10
pence) 15,346,950 1,535 - - 1,535
============= ======== ============ ======== ========
The deferred shares have no rights.
10 Dividends
The directors are unable to recommend the payment of a dividend (year ended 30 September 2016: GBPnil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UBOARBWAAUUA
(END) Dow Jones Newswires
November 28, 2017 02:01 ET (07:01 GMT)
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