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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
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  4.50 11.39% 44.00 42.00 46.00 42.00 42.00 42.00 85,040 16:35:26
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonequity Investment Instruments 3.2 -3.6 -23.2 - 7

Premier Veterinary Group PLC Final Results

31/01/2020 4:52pm

UK Regulatory (RNS & others)


Premier Veterinary (LSE:PVG)
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TIDMPVG

RNS Number : 6385B

Premier Veterinary Group PLC

31 January 2020

PREMIER VETERINARY GROUP PLC

PRELIMINARY ANNOUNCEMENT

AUDITED FINAL RESULTS FOR THE YEARED 30 SEPTEMBER 2018

London, UK, 31 January 2020 - Premier Veterinary Group plc (LSE: PVG) ("PVG" or the "Company") today announces its audited results for the year ended 30 September 2019.

2019 HIGHLIGHTS

-- 22% increase in global revenues to GBP3,861k for the year ended 30 September 2019 (30 September 2018: GBP3,152k).

-- 27% increase in the number of pets on plan with 311,000 on plan at 30 September 2019 (30 September 2018: 244,000).

-- 24% increase in the number of pets on plan in the UK to 240,000 at 30 September 2019 (30 September 2018: 193,000).

-- 30% increase in the number of global monthly transactions processed to 3,398,000 in year ended 30 September 2018 (30 September 2018: 2,616,000).

POST PERIOD HIGHLIGHTS

-- On 29 January 2020 the Group announced that an agreement had been reached whereby BFSL has agreed to the roll up of monthly interest payments and the extension of the repayment date of the GBP3.85m facility and accrued interest to 31 July 2021.

-- In addition PVG entered into a further agreement with BFSL to provide an additional secured loan facility of GBP1.1m. The first tranche of GBP0.6m was drawn on 29 January 2020 with two further tranches of GBP0.25m each available for draw down at PVG's request on 22 May 2020 and 24 July 2020. These further tranches can only be drawn by PVG if on or before 30 April 2020 it has issued BFSL with warrants to subscribe for up to 383,673 new PVG ordinary shares of 10p each at an exercise price of 10p per share within 5 years of the issue of any such warrants. Interest of 1% per month accrues on the loan facility on a monthly compound basis and is added to the total loan amount. The total loan together with accrued interest is repayable on 30 April 2020 with an option for PVG to extend the repayment date to 31 July 2021 by issuing the warrants referred to above. The loan will be utilised by PVG to fund the Group's working capital requirements including the payment of a GBP0.1m arrangement fee payable to BFSL.

A full copy of the Company's Annual Report and Financial Statements for the year ended 30 September 2019 (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 31 January 2020. 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. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

For further information, please contact:

 
 Premier Veterinary Group plc           Tel: +44 (0)117 970 4130 
  Dominic Tonner, Chief Executive 
  Officer 
  Andy Paull, 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 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.

CHAIR'S STATEMENT

Overview and results

Introduction

The nature and organisation of veterinary pet care continues to undergo significant change in its ownership and structure throughout our operative markets. I am therefore pleased to be able to report that, despite the changing environment, the Group continues to successfully adapt and grow its business. This has been achieved by a continued focus on delivery of its ongoing core strategic objectives, coupled with appropriate investment in the necessary human and technological resources.

Results

During the year ended 30 September 2019, we have increased our total number of pets enrolled on our pet healthcare programmes ("Pets on Plan") by 27% over the previous year to a total of 311,000. This in turn has driven a 30% increase in the number of transactions processed, with a resulting 22% uplift in total revenue from continuing operations to GBP3.86 million accompanied by a GBP0.64 million reduction in losses from continuing operations to GBP2.93 million. The Board has continued to manage its cost base, as part of which the Directors have agreed to waive until further notice a substantial element of their remuneration.

The Board has maintained a constant review of the necessary funding provision required to support its investment and business development needs, including the management of its facilities with Bybrook Finance Solutions Limited and new arrangements have been agreed.

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, of which there can be no assurance, taking into account any earnings to be reinvested in the Group's business. Further details on our operational and financial performance can be found in the operational and financial review.

Governance

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.

Throughout the year, the Board has been mindful of its board and committee membership and composition.

Looking ahead

The Board remains focussed on continued growth in revenues and control of costs in order that positive EBITDA can be achieved in the short to medium term.

I would like to take this opportunity of expressing my thanks to all those engaged by the Company for their continued dedication to delivering the high standards of service expected by our customers and also to our supportive shareholders.

Graham Dick

Chair

Premier Veterinary Group plc

31 January 2020

CEO'S STATEMENT

OUR STRATEGY

The Board regularly evaluates how best to achieve its strategic objectives. Our strategy remains focussed on four key areas:

To leverage the success of PVA

The PPCP business was started by PVA in 2010 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, systems and processes which have been developed in the UK business to expand PPCP, both in the UK and into 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 USA.

To develop the business through its global strategic partnerships and growing data set

The business has long-term relationships with global pharmaceutical manufacturers, buying groups and distributors that operate in the animal health sector. Furthermore, the substantial data sets generated by the business over previous years provide valuable insights on which 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 continues to build significant data sets to enhance planning and partner value.

To continue to invest in our global transaction platform

The investment required to capture significant international opportunities is considerable, not only in establishing operations in each territory but also in developing the IT and back office support necessary to deliver consistent, high quality customer experience in every territory. The Group expects to continue to invest in its global transaction platform and portal, which will help generate increased revenue and deliver competitive advantage.

To develop new opportunities for growth

Notwithstanding the significant level of consolidation currently taking place, the UK and overseas markets remain 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

Operational and financial overview

2019 has seen positive progress in the continuation of business growth. The number of revenue-generating pets on plan across our operations in the UK, Europe and the USA has increased by 27% on the previous year to 311,000 from 244,000 as at the end of the financial year. We have continued to pursue our strategy to leverage strategic partnerships and to focus on our core territories to increase the Group's growth potential. Alongside this, we continue to invest in our operating model, core infrastructure and plans to work with clients to support them as we develop business solutions and opportunities.

Our bespoke software system facilitates the operation of Premier Pet Care Plan in the UK, 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, and delivering competitive advantage.

PVG has continued to make significant investments across the three geographical territories in which it operates to ensure that it remains at the forefront of working with veterinary practices to deliver preventative healthcare programmes for pets.

Our operating model

Our core revenue is generated from processing the payments made by pet owners for their Plan, using our own state of the art payment platform. In addition, not only does our business model allow us to generate income from processing payments, but we can also add further value by applying our expertise and knowledge of animal health markets to produce significant, tangible benefits for our clients and strategic supply partners.

We continue to invest in the solutions we offer our customers to help drive greater efficiency through the transaction process. Our Global Transaction Platform ("Platform") delivers a high-quality customer experience, enabling the collection of payments across the UK, Europe and the US and provides real-time access to client records and regular management reporting. We believe this provides a technical competitive advantage to ensure our services meet customers' expectations to provide them with flexible and effective solutions.

Our knowledgeable sales and training teams assist customers with Plan design, point of sale marketing and staff training.

We provide advice on what to include as part of the Plan based on our experience and market expertise. We ensure we keep Plans simple and flexible for the client whilst also ensuring Plans remain price competitive and generate bottom-line growth.

Once a Plan has been structured, we launch the customer's plan on our Platform and train their staff. We also provide continuous training and post-launch support which delivers an end-to-end solution and results for our partners and pet owners. Should customers and pet owners choose to, they can also benefit from our text messaging reminder service to ensure they never miss out on the benefits that the Plan provides.

Market overview

Our operations and performance in the UK

In the UK, PPCP revenues are up by 6% to GBP2,106k (2018: GBP1,985k - up by 6% on 2017). The increase in revenues driven by the continued growth in pets on plan is partially offset by a reduction in revenues from other third parties. EBITDA generated by the PPCP business in the UK has decreased by 15% to GBP461k (2018: GBP540k).

The UK business has grown the number of pets on plan from 193,000 to 240,000 representing a 24% growth 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. We continue to work with customers to enhance the quality of real time information provided by our Platform on the performance of PPCP in each clinic.

A new Home Delivery option has been developed for the UK market which is in the process of implementation and is expected to enhance service, bond our customers and provide growth opportunities in this market.

Our operations and performance in Europe

Further progress has been made in the number of pets on plan in Europe during the financial year. The business continues to keep under careful review the current political and financial uncertainties as the UK transitions toward leaving the EU.

Our operations in Europe have continued to see an increase in the number of pets on plan from 42,000 to 52,500, representing a 25% increase on the same period last year. In Europe, revenues are up by 14% to GBP924k (2018: GBP808k). The EBITDA loss in Europe improved from GBP775k to GBP593k.

The Group's most significant territory in Europe is the Netherlands which, as anticipated, started to become cash generative during the latter part of the financial year. Huisdieren Zorg Plan ("HZP"), in the Netherlands was launched during 2015. The number of pets on plan has grown by 11% to 36,500 as at 30 September 2019 (30 September 2018: 33,000). In the last 12 months, there have been increased levels of clinic acquisition by corporate veterinary groups. This presents both opportunities and threats for the Group's operation but as a consequence some reduction in rates of growth are expected in the future, and to recognise this shift in the market a new strategy has been implemented whereby the territory is now managed from the UK which has resulted in a significant reduction in costs. Opportunities regarding a Home Delivery option for this territory are being pursued to further secure our business moving forward.

Our operation in France is branded as Premier Veto Plan ("PVP") through which there were 14,000 pets on plan as at 30 September 2019 (30 September 2018: 7,000). The strong pipeline of new sales opportunities provides encouraging signs for continued growth in this region.

The business continues to pursue opportunities in France, with an available market for preventative healthcare programmes for pets across France 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).

Our operations and performance in the USA

Operations were established in the USA during the second half of financial year 2016 and the first plans were launched in September 2016. The business continues to work hard in the USA to focus on changes we have implemented to satisfy the specific need of the USA market and the revised strategy of focussing on corporate owned groups, with introductions provided by the major pharmaceutical companies, is beginning to deliver significant growth

During the financial year ended 30 September 2018, we were pleased to announce the signing of a contract with a major veterinary consolidator in the USA who currently has over 200 hospitals across 25 States. Of these hospitals, in excess of 160 are companion animal, the target market for PVA and plans have been launched in 74 of their hospitals so far. The average size of these hospitals is larger than the average size of UK and USA practices currently served.

The available market for preventative healthcare programmes for pets across the USA is estimated at 70 million dogs and 74 million cats (US Pet Ownership & Demographics Sourcebook 2012). The number of pets on plan increased to 19,000 as at 30 September 2019 (30 September 2018: 9,000).

Revenues are up by 131% to GBP831k (2018: GBP359k) and the EBITDA loss improved from GBP1,438k to GBP678k.

Group Financial Summary Overview

The following review should be read in conjunction with the financial statements and related notes of this Annual Report. The Group's total revenue from continuing operations for the year ended 30 September 2019 was GBP3,861, an increase of 22% (2018: GBP3,152k). 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.

 
 GBP000s             Revenue 
                   2019    2018 
                 ------  ------ 
 PPCP - UK        2,106   1,985 
                 ------  ------ 
 PPCP - Europe      924     808 
                 ------  ------ 
 PPCP - USA         831     359 
                 ------  ------ 
 Total            3,861   3,152 
                 ------  ------ 
 
 
 GBP000s                           Operating Profit/(Loss) 
                                         2019          2018 
                                 ------------  ------------ 
 EBITDA* 
                                 ------------  ------------ 
 PPCP - UK                                461           540 
                                 ------------  ------------ 
 PPCP - Europe                          (593)         (775) 
                                 ------------  ------------ 
 PPCP - USA                             (678)       (1,438) 
                                 ------------  ------------ 
 Total EBITDA from PPCP                 (810)       (1,673) 
                                 ------------  ------------ 
 Central unallocated costs            (1,480)       (1,576) 
                                 ------------  ------------ 
 Total EDITDA from continuing 
  operations                          (2,290)       (3,249) 
                                 ------------  ------------ 
 Depreciation and amortisation          (165)         (247) 
                                 ------------  ------------ 
 Finance Expenses                       (504)         (102) 
                                 ------------  ------------ 
 Loss before Income Tax               (2,959)       (3,598) 
                                 ------------  ------------ 
 

* EBITDA represents earnings before interest, tax, depreciation and amortisation.

Central unallocated costs have reduced by GBP139k relative to the previous year. As in the previous year the Executive Directors will not receive a bonus for the financial year ended 30 September 2019.

Finance costs for the year were GBP504k (being GBP385k of interest and GBP119k of amortised arrangement fees) (2018: GBP102k of interest only).

The loss from continuing operations reduced from GBP3,567k to GBP2,926k, directly as a result of the increase in revenues and concerted effort to challenge and reduce the groups relative cost base. Overall operating costs have reduced by GBP449k whilst interest costs have increased by GBP402k.

Continued investment

The Group has invested and capitalised GBP141k (2018: GBP250k) of costs relating to its bespoke software system to facilitate the operation of Premier Pet Care Plan in the UK, Europe and the US. This level of investment is expected to be repeated in the current financial year as further enhancements and services are developed.

Funding

As at 30 September 2019, the Group held cash balances of GBP686k and had outstanding loan facility liabilities of GBP3.85m with Bybrook Finance Solutions Limited ("BFSL"). Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, participated in the funding of the facility by entering into direct arrangements with BFSL.

As previously announced, PVG requires additional funding to support the directors' going concern assessment, continue to maximise the growth opportunities that the Group has developed and to reach overall profitability.

The full Board sought alternative funding options and the non-conflicted directors of PVG, have negotiated terms with BFSL on behalf of the Group. Having taken external advice and considered the possibility of raising alternative sources of finance within the timescales required the Board concluded that the BFSL proposal is the best available at the current time and will provide the Group with the funding to realise growth opportunities which are in the best interests of all stakeholders of the Company.

On 29 January 2020 the Group announced that an agreement had been reached whereby BFSL has agreed to the roll up of monthly interest payments and the extension of the repayment date of the GBP3.85m facility and accrued interest to 31 July 2021.

In addition PVG entered into a further agreement with BFSL to provide an additional secured loan facility of GBP1.1m. The first tranche of GBP0.6m was drawn on 29 January 2020 with two further tranches of GBP0.25m each available for draw down at PVG's request on 22 May 2020 and 24 July 2020. These further tranches can only be drawn by PVG if on or before 30 April 2020 it has issued BFSL with warrants to subscribe for up to 383,673 new PVG ordinary shares of 10p each at an exercise price of 10p per share within 5 years of the issue of any such warrants. Interest of 1% per month accrues on the loan facility on a monthly compound basis and is added to the total loan amount. The total loan together with accrued interest is repayable on 30 April 2020 with an option for PVG to extend the repayment date to 31 July 2021 by issuing the warrants referred to above. The loan will be utilised by PVG to fund the Group's working capital requirements including the payment of a GBP0.1m arrangement fee payable to BFSL. Full details of the terms of the loan facilities can be found in note 24 to the financial statements.

Pension scheme

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 year.

Going Concern

The consolidated financial statements have been prepared on a going concern basis. The Group made a loss from continuing operations of GBP2,926k in the year ended 30 September 2019 and ended the year with net liabilities of GBP3,239k. As at 30 September 2019, the Group had cash and short-term deposits of GBP686k.

In order to ensure that the Group has sufficient cash resources for the foreseeable future, PVG has entered into a new facility with Bybrook Finance Solutions Limited ("BFSL") on 29 January 2020 and agreed the deferral of interest and extension of the repayment date of its existing GBP3.85m facility. The terms of the loan facility are outlined in note 24 to the financial statements.

The Board considers that with its current cash reserves and the additional funds available from the new facility, after running various sensitivity analyses including ones with moderate growth and the implementation of further cost savings initiatives, 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 Board 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 Board continues to adopt the going concern basis in preparing the financial statements.

Outlook

The business continues to develop its corporate agreements in the USA. This, along with the new service strategy in the Netherlands and continued growth in pets on plan in France and the UK demonstrates that the substantial and consistent investment in our global transaction platform is now delivering significant and measurable benefits with competitive advantage to our company. Furthermore, our people's focus on customer service and technical capability has enabled us to deliver and adapt our strategy in the face of strong competition whilst continuing to deliver significant growth.

The business looks forward to working with our partners to support the growth of their businesses in innovative and exciting ways.

We look forward to announcing further developments throughout the coming 12 months.

Dominic Tonner

Chief Executive Officer

Premier Veterinary Group plc

31 January 2020

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group and company for that period. In preparing the financial statements, the directors are required to:

   --       select suitable accounting policies and then apply them consistently; 

-- state whether applicable IFRSs as adopted by the European Union have been followed for the group financial statements and IFRSs as adopted by the European Union have been followed for the company financial statements, subject to any material departures disclosed and explained in the financial statements;

   --       make judgements and accounting estimates that are reasonable and prudent; and 

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

The directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

Each of the directors, whose names and functions are listed in the Corporate Governance Statement confirm that, to the best of their knowledge:

-- the company financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the company;

-- the group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the group; and

-- the Directors' Report includes a fair review of the development and performance of the business and the position of the group and company, together with a description of the principal risks and uncertainties that it faces.

In the case of each director in office at the date the Directors' Report is approved:

-- so far as the director is aware, there is no relevant audit information of which the group and company's auditors are unaware; and

-- they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the group and company's auditors are aware of that information.

By order of the Board

 
 Graham Dick       Dominic Tonner 
 Director          Director 
 31 January 2020   31 January 2020 
 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR YEARED 30 SEPTEMBER 2019

 
                                                               Year         Year 
                                                           ended 30     ended 30 
                                                          September    September 
                                                               2019         2018 
                                                  Note      GBP'000      GBP'000 
 Revenue                                           7          3,861        3,152 
 Cost of sales                                                (282)        (165) 
                                                        -----------  ----------- 
 Gross profit                                                 3,579        2,987 
 Administrative expenses                                    (6,034)      (6,483) 
                                                        -----------  ----------- 
 Loss from operations                              4        (2,455)      (3,496) 
 Finance expense                                   8          (504)        (102) 
                                                        -----------  ----------- 
 Loss before income tax                                     (2,959)      (3,598) 
 Income tax credit                                               33           31 
                                                        -----------  ----------- 
 Loss from continuing operations                            (2,926)      (3,567) 
 Profit on discontinued operations, net 
  of tax                                                      3,861        3,152 
 Loss for the year                                            (282)        (165) 
                                                        ===========  =========== 
 
 Exchange differences on translation of 
  foreign operations                                           (59)            6 
 
 Total comprehensive expense for the year 
  attributable to equity holders of the parent 
  company                                                   (2,985)      (3,561) 
 
 Loss per share for profit attributable 
  to the owners of the parent during the 
  year: 
 Basic (pence)                                     10        (19.5)       (23.2) 
 Diluted (pence)                                   10        (18.9)       (22.6) 
                                                        -----------  ----------- 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2019

 
                                                      As at 30     As at 30 
                                                     September    September 
                                                          2019         2018 
                                             Note      GBP'000      GBP'000 
 Non-current assets 
 Property, plant and equipment                11            23           32 
 Other intangible assets                      12           474          471 
 Total non-current assets                                  497          503 
 
 Current assets 
 Trade and other receivables                  14           569          534 
 Cash and cash equivalents                    23           686          648 
                                                   -----------  ----------- 
 Total current assets                                    1,255        1,182 
 
 Total assets                                            1,752        1,685 
                                                   ===========  =========== 
 
 Equity attributable to equity holders of 
  the Company 
 Called up share capital                      17         1,535        1,535 
 Share premium                                               5            5 
 Share based payments reserve                               35           35 
 Reverse acquisition reserves                            3,671        3,671 
 Accumulated losses                                    (8,485)      (5,500) 
                                                   -----------  ----------- 
 Total equity                                          (3,239)        (254) 
 
 Current liabilities 
 Trade and other payables                     15           938          703 
 Current tax liabilities                                   133          133 
 Total current liabilities                               1,071          836 
 
 Non-current liabilities 
 Loans and borrowings                         16         3,850        1,000 
 Deferred tax provision                       19            70          103 
                                                   -----------  ----------- 
 Total non-current liabilities                           3,920        1,103 
 
 Total liabilities                                       4,991        1,939 
 
 Total equity and liabilities                            1,752        1,685 
                                                   ===========  =========== 
 

The financial statements were approved and authorised for issue by the Board and authorised for issue on 31 January 2020. They were signed on its behalf:

Dominic Tonner

Director

31 January 2020

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR YEARED 30 SEPTEMBER 2019

 
                                 Called                  Share 
                                     up                  based        Reverse 
                                  Share      Share    payments    acquisition   Accumulated     Total 
                                capital    premium     reserve        reserve        losses    equity 
                                GBP'000    GBP'000     GBP'000        GBP'000       GBP'000   GBP'000 
 
 Balance as at 1 October 
  2017                            1,535          5          35          3,671       (1,939)     3,307 
 
 Loss for the year:                   -          -           -              -       (3,567)   (3,567) 
 
 Other comprehensive income 
  for the year:                       -          -           -              -             6         6 
 
 Balance as at 30 September 
  2018                            1,535          5          35          3,671       (5,500)     (254) 
 
 Loss for the year:                   -          -           -              -       (2,926)   (2,926) 
 
 Other comprehensive income 
  for the year:                       -          -           -              -          (59)      (59) 
 
 Balance as at 30 September 
  2019                            1,535          5          35          3,671       (8,485)   (3,239) 
                              =========  =========  ==========  =============  ============  ======== 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR YEARED 30 SEPTEMBER 2019

 
                                                                 Year ended                  Year ended 
                                                               30 September                30 September 
                                                                       2019             2018 
                                                                    GBP'000                     GBP'000 
 Cash flows from: 
 Continuing operating activities 
 Loss before income tax                                             (2,959)                     (3,598) 
 Finance expense                                                        504                         102 
 Differences on translation of operations                              (59)                           - 
  in foreign currencies 
 Depreciation of property, plant and equipment                           28                          36 
 Amortisation of intangible assets                                      137                         211 
 Decrease in trade and other receivables                                196                         181 
 Decrease in trade and other payables                                   235                       (140) 
                                                 --------------------------  -------------------------- 
 Cash used in operations                                            (1,918)                     (3,208) 
 
 Income taxes                                                             -                           - 
                                                 --------------------------  -------------------------- 
 Net cash used in operating activities                               1,918)                     (3,208) 
 
 Investing activities 
 Purchase of property, plant and equipment                             (19)                        (10) 
 Purchase of intangible assets                                        (140)                       (250) 
                                                 --------------------------  -------------------------- 
 Net cash used in continuing investing 
  activities                                                          (159)                       (260) 
 
 Financing activities 
 Loan notes issued and other loans received                           3,850                       1,000 
 Repayment of loan notes                                            (1,000)                           - 
 Payment of loan arrangement fee                                      (350)                           - 
 Interest paid                                                        (385)                       (102) 
                                                 --------------------------  -------------------------- 
 Net cash generated from financing activities                         2,115                         898 
 
 Net (decrease)/increase in cash and cash 
  equivalents                                                            38                     (2,570) 
 Cash and cash equivalents at beginning 
  of year                                                               648                       3,218 
 Cash and cash equivalents at end of year                               686                         648 
                                                 ==========================  ========================== 
 
 Shown as: 
 Cash and cash equivalents                                              686                         648 
                                                 ==========================  ========================== 
 

SELECTED NOTES TO THE FINANCIAL INFORMATION

   1        Presentation of financial information 

These results for the year ended 30 September 2019 are an excerpt from the Annual Report and do not constitute the Company's statutory accounts for the year ended 30 September 2019. PricewaterhouseCoopers LLP reported on the accounts for the year ended 30 September 2019. Their report for the year ended 30 September 2019 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 GBP2,926k in the year ended 30 September 2019 and ended the year with net liabilities of GBP3,239k. As at 30 September 2019, the Group had cash and short term deposits of GBP686k.

On 29 January 2020 the Group announced that an agreement had been reached whereby BFSL has agreed to the roll up of monthly interest payments and the extension of the repayment date of the GBP3.85m facility and accrued interest to 31 July 2021.

In addition PVG entered into a further agreement with BFSL to provide an additional secured loan facility of GBP1.1m. The first tranche of GBP0.6m was drawn on 29 January 2020 with two further tranches of GBP0.25m each available for draw down at PVG's request on 22 May 2020 and 24 July 2020. These further tranches can only be drawn by PVG if on or before 30 April 2020 it has issued BFSL with warrants to subscribe for up to 383,673 new PVG ordinary shares of 10p each at an exercise price of 10p per share within 5 years of the issue of any such warrants. Interest of 1% per month accrues on the loan facility on a monthly compound basis and is added to the total loan amount. The total loan together with accrued interest is repayable on 30 April 2020 with an option for PVG to extend the repayment date to 31 July 2021 by issuing the warrants referred to above. The loan will be utilised by PVG to fund the Group's working capital requirements including the payment of a GBP0.1m arrangement fee payable to BFSL. Rajan Uppal, a director of the Company, is the sole shareholder and director of BFSL. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, took part in the PVG funding of the GBP3.85m facility by entering into direct arrangements with BFSL. Further information relating to the arrangements with BFSL is set out in note 24.

The directors consider that with its current cash reserves and the additional funds available from the new facility, the Group has sufficient resources after running various sensitivity analyses including ones with moderate growth and the implementation of further cost savings initiatives, 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                Year 
                           ended 30 September 2019    ended 30 
                                                      September 
                                                        2018 
                                           GBP'000      GBP'000 
 Wages and salaries                          2,781        3,126 
 Social security costs                         388          503 
 Other pension costs                            91           66 
                                             3,260        3,695 
                         -------------------------  ----------- 
 

The average monthly number of employees during the year was as follows:

 
                                          Year                       Year 
                       ended 30 September 2019    ended 30 September 2018 
 Directors                                   5                          5 
 Management                                  6                          7 
 Finance                                     5                          5 
 IT                                          4                          4 
 Customer Services                           8                          7 
 Sales                                       4                          9 
 Trainers                                   19                         18 
                     -------------------------  ------------------------- 
 Total                                      51                         55 
                     -------------------------  ------------------------- 
 
   4        Segmental reporting 

Management have defined operating segments as those on which results are considered by the Management team. 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 USA 

All revenue is derived from external customers.

 
                                               PPCP UK   PPCP Europe   PPCP US       Total 
                                               GBP'000       GBP'000   GBP'000     GBP'000 
 Year ended 30 September 2019 
 Group's revenue per consolidated statement 
  of comprehensive income                        2,106           924       831       3,861 
 
 Gross profit                                    2,045           870       664       3,579 
 Administrative expenses                       (1,686)       (1,537)   (1,374)     (4,597) 
                                              --------  ------------  --------  ---------- 
 Profit/(loss) before central costs                359         (667)     (710)     (1,018) 
 Central unallocated administrative 
  costs                                                                            (1,437) 
 Finance expense                                                                     (504) 
 Loss before income tax                                                            (2,959) 
                                                                                ========== 
 
 Year ended 30 September 2018 
 Group's revenue per consolidated statement 
  of comprehensive income                        1,985           808       359       3,152 
                                              --------  ------------  --------  ---------- 
 
 Gross profit                                    1,939           761       287       2,987 
 Administrative expenses                       (1,517)       (1,635)   (1,755)     (4,907) 
                                              --------  ------------  --------  ---------- 
 Profit/(loss) before central costs                422         (874)   (1,468)     (1,920) 
 Central unallocated administrative 
  costs                                                                            (1,576) 
 Finance expense                                                                     (102) 
 
 Loss before income tax                                                            (3,598) 
                                                                                ========== 
 
 
                         Year             Year 
                                         ended 
                     ended 30               30 
                    September        September 
                         2019             2018 
 Revenue              GBP'000          GBP'000 
 
 Denmark                    9               24 
 Ireland                   20               21 
 Netherlands              600              537 
 France                   294              225 
 Germany                    1                1 
 USA                      831              359 
 UK                     2,106            1,985 
               --------------  --------------- 
 Total                  3,861            3,152 
               ==============  =============== 
 
   5        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 year. For the purposes of this calculation, the weighted average number of shares is the number of ordinary shares in the period, excluding deferred shares.

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 2019   Year ended 30 September 2018 
                                                                           GBP'000                        GBP'000 
 Total comprehensive loss for the year                                     (2,985)                        (3,561) 
 
                                                                               No.                            No. 
 Weighted average number of shares used in basic 
  earnings per share                                                    15,346,950                     15,346,950 
 Effect of dilutive potential 
  ordinary shares from share options and warrants                          418,552                        399,035 
                                                     -----------------------------  ----------------------------- 
 Weighted average number of shares used in diluted 
  earnings per share                                                    15,765,502                     15,745,985 
                                                     -----------------------------  ----------------------------- 
 
   6        Trade and other receivables 
 
                                   As at 30 September 2019   As at 30 September 2018 
                                                   GBP'000                   GBP'000 
 Trade receivables                                     148                       286 
 Other receivables                                      31                        39 
 Prepayments and accrued income                        390                       209 
                                  ------------------------  ------------------------ 
                                                       569                       534 
                                  ------------------------  ------------------------ 
 

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 considers GBP20k (2017: GBP36k) of the Group's receivables to be impaired and has deducted this amount from the 'more than 12 months' row in arriving at the following.

 
                          As at 30           As at 
                         September    30 September 
                              2019            2018 
                           GBP'000         GBP'000 
 Up to 3 months                 33              80 
 3 to 6 months                   7              46 
 6 to 12 months                 19             124 
 More than 12 months            89              36 
                       -----------  -------------- 
                               148             286 
                       -----------  -------------- 
 

Trade and other receivables have not been discounted. The accrued income has not been discounted.

   7        Loans and borrowings 
 
   As at 30 September 2018   As at 30 September 2017 
                   GBP'000                   GBP'000 
 

Non-current

 
 Loan notes    3,850   1,000 
               3,850   1,000 
              ------  ------ 
 

On the 25 January 2019 the Company entered into a term loan facility of GBP3,850,000 with Bybrook Financial Services Limited ("BFSL") whilst simultaneously repaying the previously issued GBP1,000,000 loan notes to BFSL. The company has the right to repay the facility in full or in part before maturity. The loan is due for repayment 24 months after the drawdown date. Further details in respect of the loan are provided in note 21.

.

 
                                    As at 30 September 2018   As at 30 September 2017 
 Ageing of bank and other loans:                    GBP'000                   GBP'000 
 Repayable within 1 - 2 years                         3,850                     1,000 
                                                      3,850                     1,000 
                                   ------------------------  ------------------------ 
 
   8        Called up share capital 
 
                                  Ordinary shares     Total 
                                    No.   GBP'000   GBP'000 
 Shares at 1 October 
  2017 (Ordinary 10 
  pence)                     15,346,950     1,535     1,535 
 
 Share options and                    -         -         - 
  warrants exercised 
 
 Shares at 1 October 
  2018 (Ordinary 10 
  pence)                     15,346,950     1,535     1,535 
 
 Share options and                    -         -         - 
  warrants exercised 
 
 
 Shares at 30 September 
  2019 (Ordinary 10 
  pence)                     15,346,950     1,535     1,535 
                          =============  ========  ======== 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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