CVS Group Aktie

Welcome to this presentation of CVS Group's interim results for the six-month period to December 2025. I'm Richard Fairman, CEO. And later, you will also hear from Robin Alfonso, our Chief Financial Officer; and Paul Higgs, our Chief Veterinary Officer.

Our purpose at CVS is to give the best possible care to as many animals as possible, and I'm pleased to report on continued progress in the period. We completed our step-up from AIM to the main market on the 29th of January 2026, and we hope this will bring benefits from improved liquidity, access to a more diverse pool of capital, index inclusion for March and an increase in our profile as a company.

We have launched our new consumer-facing U.K. companion animal joint brand under CVS Vets, and you will see this reflected in this presentation. Now this reflects the care, value and service, which we are renowned for as a trusted partner for our clients. Our presence in Australia is growing with three acquisitions completed in the period and a further two practice acquisitions completed so far in the second half of the year. We have continued our disciplined capital investment, improving our facilities, clinical equipment and technology, and we are confident this investment will drive long-term growth in shareholder value.

We welcome the launch by DEFRA of a consultation into the outdated Veterinary Surgeons Act from 1966, and we are engaging with that process and encouraging CVS colleagues to do so. And we look forward to the CMA's final decision in the coming weeks. We continue to trade in line with market expectations, and Robin will provide further detail on our financial performance later.

Highlights for the first half include revenue increased by 5.8% in the period with growth across all divisions and like-for-like sales improving. Adjusted EBITDA increased by 3.9% to GBP 67.7 million. We invested GBP 17.5 million in capital expenditure, but maintained leverage at 1.41x. We saw an improvement in both our client Net Promoter Score, which improved to 81.2 and our employee Net Promoter Score to 10.

Having first entered Australia in July 2023, we have grown to 33 practices operating across 55 sites. Our Australia practices are performing well and now present circa 10% of group revenue. We have consciously focused on acquiring larger, high-quality small animal first opinion practices with strong leadership teams, great facilities and excellent reputations. These practices tend to deliver higher margins, and hence, Australia now represents circa 15% of group EBITDA. The Australian market has low levels of consolidation, and we have a strong pipeline and an expectation that we will complete a number of further acquisitions in the remainder of this financial year.

Whilst the level of corporate consolidation is higher in the U.K. at circa 60%, we have less than a 9% market share, and we are confident there will be an opportunity for CVS to make further high-quality acquisitions following the conclusion of the CMA process.

The CMA market investigation has been underway for the past 2.5 years, and we have proactively engaged with the CMA throughout this time. This is to both help the CMA understand the sector and some of the challenges, but importantly, to ensure an appropriate outcome in the best interest of consumers. The CMA announced their provisional decision in October 2025, and this has brought much needed certainty. We do not agree with all of the CMA proposed remedies and feel some such as the proposed price gap on prescription fees are not justified by their findings. However, we are comfortable with them and have already implemented price lists on our practice websites and have commenced the rollout of our new joint branding. We will continue to support the CMA during the remainder of their investigation and look forward to the publication of their final decision scheduled for the coming weeks.

I will now pass over to Robin, who will provide further color on our financial performance in the period.

Thanks, Richard. H1 2026 marked a return to organic like-for-like sales growth as well as growth from acquisitions, cementing a positive first half performance. In May 2025, we sold our crematoria operations and have therefore restated our H1 2025 numbers to reflect these operations as discontinued. Revenue grew 5.8% to GBP 356.9 million, benefiting from acquisitions made in the current and prior year with like-for-like growth of plus 2.7%. Our like-for-like sales growth is adjusted for working days and on a constant currency basis. It excludes current year acquisitions, and it only includes prior year acquisitions from the same month this year as they acquired in the previous year. We are pleased that revenue growth has been achieved across all divisions. This growth was achieved despite continued softer market conditions in the U.K. and a backdrop of lower visit numbers in small animal practices. Client demand for our most advanced referral care remains strong.

Adjusted EBITDA grew 3.9% to GBP 67.7 million, benefiting from increased revenue. An adjusted EBITDA margin of 19% was down 0.3 percentage points versus prior year with cost efficiencies and synergies largely offsetting the increase in National Living and National Minimum Wage alongside increases in employers' national insurance contributions from April 2025, which have an annualized impact of circa GBP 4 million and GBP 8 million, respectively. Margin of 19% continues to be within our 19% to 23% range ambition.

During the period, GBP 7 million was recognized in respect of net research and development expenditure tax credits, which was the same as H1 2025. And free cash flow increased 16.2% to GBP 34.4 million due to the increase in adjusted EBITDA and favorable operating cash conversion, which was up 3.3 percentage points on H1 2025 and in line with our stated ambition of greater than 70% operating cash conversion. With robust cash generation and a strong balance sheet, we've continued to invest in future growth through CapEx investment and further acquisitions. We also undertook a small share buyback to support the move to the main market, which concluded in January 2026.

As a result of these investments, net bank borrowings increased to GBP 28.8 million since June 2025 to GBP 160.2 million and leverage increased to 1.41x. Leverage is well below our 2x target ceiling and provides firepower to continue with our ongoing expansion in Australia and the U.K. in due course.

Adjusted EPS of 40.2p was up 2.2p, benefiting from an increase in EBITDA. We continue to invest in our practice facilities, clinical equipment and technology with total capital expenditure of GBP 17.5 million, and Paul will touch on these more later. Consideration for acquisitions of GBP 23.3 million represents continued momentum in Australia with a further two acquisitions of nine practice sites. Pleasingly, performance has been in line with expectations. The group's short-term expansion focus will be in Australia, where there is a strong pipeline of exciting opportunities. There may also be acquisition opportunities in the U.K. following the end of the CMA investigation.

Moving on to Slide 10. I'm pleased with the resilient EBITDA performance, which has been underpinned by growth and acquisitions. Revenue increased to GBP 356.9 million from GBP 337.3 million, benefiting from acquisitions and like-for-like growth of 2.7%. Australia now represents about 10% of group revenue. EBITDA increased to GBP 67.7 million from GBP 65.1 million, benefiting from revenue growth with resilient adjusted EBITDA margin, which largely held up despite wage inflation in addition to investments in online marketing and IT.

We are pleased to have offset the vast majority of cost headwinds from the national insurance contributions and National Living and minimum wage pressure and deliver EBITDA margin within our stated range of between 19% to 23%. We continue to target investments primarily in practice facilities and equipment to expand margins over the longer term.

We've seen revenue growth across all our divisions. The Veterinary Practices division comprises our companion animal, referrals, farm animal and equine veterinary practices as well as our buying groups, Vet Direct and MiPet Insurance. This division delivered 5.4% growth in revenue, benefiting from acquisitions and a return to like-for-like growth despite softer market conditions in the U.K. and a backdrop of lower visit numbers in small animal practices. Client demand for our most advanced referral care, however, remains strong. EBITDA grew 6.3%.

The Laboratories division provides analyzers in practice, which supports testing in-house, for which we supply the reagents for the tests and diagnostic testing services. Revenue in this division increased 10.3%, benefiting from improved case volume and increased analyzers in practice. EBITDA grew 17.8%.

And our online retail business, revenue increased 8.5%, benefiting from improved visits and conversion rates following the launch of the new website in February 2025. Profitability in the first half was impacted by cost of living, compounded by price elasticity testing, resulting in the division only breaking even in the first half. Profit is expected to return in the second half of the year.

And in head office, we saw an increase in cost of GBP 1.2 million due to increased share option costs with options having not vested in the past few years, continued investment in people, especially in Australia and continued investment in IT. I'm pleased to say the momentum seen across the group in the first half has continued into H2 2026, and we continue to trade in line with market expectations.

On to Slide 12, we have a healthy balance sheet with GBP 350 million of debt facility and headroom within our leverage target ceiling and therefore, capital available to support our investment opportunities. Our stated ambition is to invest GBP 30 million to GBP 50 million per annum on capital investment and over GBP 50 million on acquisitions, which has primarily been in Australia, but acquisition opportunities may open up in the U.K. post the CMA conclusion. We have funding in place to support this growth. The group continues to generate healthy cash flows with operating cash conversion of 75%, which is in line with our Capital Markets Day ambition of 70%. Free cash flow of GBP 34.4 million benefited from increased EBITDA and operating cash conversion.

With robust cash generation and a strong balance sheet, we've been able to continue to invest in future growth through CapEx investment and further acquisitions. We also undertook a small share buyback to support the move to the main market, which concluded in January 2026. As a result of these investments, net bank borrowings increased GBP 28.8 million from June 2025 to GBP 160.2 million and leverage increased to 1.41x. Leverage is well below our 2x target ceiling and provides firepower to continue with our ongoing expansion in Australia and the U.K. in due course.

We have committed bank facilities to February 2028 and have also hedged GBP 100 million of debt, swapping variable SONIA to fixed, securing an interest rate, including current margin of circa 5.5% through to February 2028. We take a considered and disciplined approach to capital allocation, actively engaging with shareholders and reviewing the approach on a regular basis. Presently, it's considered that investments in capital expenditure and acquisitions to be appropriate uses of capital to deliver long-term accretive growth to shareholders.

Investments are carefully appraised against our hurdle rate of greater than 10% IRR and in most cases, deliver positive return on capital employed over the longer term. Our investment unlocks opportunities as well as continued investment opportunities in facilities, clinical equipment and technology, there is a strong pipeline of acquisition opportunities in Australia and acquisition opportunities in the U.K. in due course.

We look forward to enhancing the client experience further and delivering on our purpose to give the best possible care to as many animals as possible.

I will now pass to Paul, our Chief Veterinary Officer, to update you on our strategic progress.

Thanks, Robin. Our new brand reflects who we are and what the letters CVS stands for: care, value and service. In the half, we have launched our dual brand approach initially to colleagues at our leadership conference in November, digitally to clients on our new consumer websites and then through updated signage, which is being rolled out across our U.K. companion animal sites as we speak. Our colleagues have welcomed this fantastic opportunity to speak about our common purpose and identity. Our client-friendly branding encapsulates why pet owners trust us, CVS, how our colleagues support and guide pet owners to find the most appropriate and individualized care and what we offer pets and their owners day in and day out. We are just a short walk away. Our new signage is fresh and it's consistent where practices retain their local name, but shows that they are part of the wider CVS Vet Group.

I'm pleased that our vision of being the veterinary company people most want to work for is delivering high colleague satisfaction and reduced attrition. We've launched our new clear employer brand centered around clinical quality, learning, progression and support. And these four elements encapsulate what our colleagues tell us is great about working at CVS. We aim to provide the best possible care to animals. We have a market-leading learning, education and development program with the platform Knowledge Hub and have established career pathways in our teams, especially for nurses and receptionists. Finally, we support. A practitioner is never alone, whether that's through support from our practice teams, our market-leading VetOracle service or well-being support. We listen and we care.

We also inspire to support exceptional employee experience, we have empowered accountable leaders, which drive and support our teams. Our colleague satisfaction has taken a knock in recent years, and we're pleased with the progression of our employee Net Promoter Score to positive 10 at December, ahead of our FY 2026 target of plus 5. Attrition continues to be stable and even reduced marginally in the half. And I would like to take this opportunity to thank all of our CVS colleagues for their outstanding commitment and dedication and for the care they provide to our clients and their animals.

Our considered approach to capital allocation supports our disciplined investment program. In H1 2026, we invested GBP 17.5 million in capital expenditure and continue to be committed to invest in our U.K. practices. In the half, we spent GBP 6.5 million on practice relocations, refurbishments and associated clinical equipment. We have a consistent, welcoming look and feel, which provides attractive spaces for both clients and colleagues. This investment has contributed to the improvement in both our client and employee engagement as measured through the group's respective Net Promoter Scores.

A practice-wide refurbishment or where required full relocation can benefit the clinical offering, practice teams and clients over the long term. We typically seek larger footprints, providing additional space to address the client demand for our services, improve clinical activity, for example, through imaging equipment, dental or endoscopy and these new facilities provide a positive environment for our clinical teams to work in, which not only can improve their well-being, but also attract further clinicians and provide secure business continuity over the long term. For now, the focus on capital expenditure remains in the U.K., but there will be opportunities to invest in Australia sites as we grow.

Over my career as a vet, the progress of veterinary care is second to none. What we can offer today is vastly improved from that of 2010 or even five years ago and what clients expect from us has changed too. The research underpins evidence-based veterinary medicine and CVS is committed to turning evidence into improved patient care. Each year, our colleagues contribute to over 100 peer-reviewed publications and present more than 30 research abstracts at leading conferences, sharing insights that shape the future of veterinary practice. We also fund external research collaborations with a recently funded research collaboration making the national news by providing a comprehensive human and feline comparative oncogenomics analysis that gives insight into feline cancer but also potentially human cancers, too. The CVS is shaping the future of veterinary nursing through a pioneering nurse optimization PhD launched in partnership with the Royal Veterinary College. This three-year project will explore how evidence-based frameworks can enhance job satisfaction, patient care and workforce sustainability and helping define the role of veterinary nurses for years to come.

In 2025, antimicrobial stewardship, AMS, remains a key research priority. Antimicrobial resistance is one of the most urgent global health challenges, and CVS is leading efforts to promote responsible prescribing and robust infection control. Our CVS-funded PhD project with the University of Liverpool is focused on reducing the use of highest priority, critically important antibiotics or HPCIAs and promoting diagnostic-led prescribing. Alongside this, a 12-month collaboration with the University of Bristol across more than 50 CVS practices is already showing promising results, reducing antibiotic use and encouraging behavior change through CPD training and case-based learning.

Now these are just a small number of examples of the wide-reaching research that we support. By embedding research into everyday practice and partnering with leading institutions, CVS is driving continuous improvement and fostering a culture of learning across our group. Our research agenda is focused on practical solutions that benefit patients, clients and the profession.

I'll now pass over to Richard for some closing remarks.

Thank you, Paul. We have taken a number of positive steps in the period, which positions CVS to deliver further enhanced value for all our stakeholders. As you have seen through this presentation, our new CVS Vs companion animal consumer brand is now live with circa 60 practices already rebranded. Our strategy for growth is clear to provide great client service and care to as many animals as possible. Our clients appreciate this care and the value and service we provide as reflected by the further increase in our client Net Promoter Score. We maintain a disciplined investment approach and have a healthy balance sheet. Strong operating cash flows support our ability to make further investment in growth.

Our step-up to the main market is complete, and we look forward to index inclusion in March. We remain on course to deliver against market consensus for the full year. And notwithstanding short-term headwinds in the U.K., we remain confident in delivering further growth.

These interim results and the improvements we have made in the financial year-to-date reflect the continued dedication and professionalism of all our colleagues. I would like to take this opportunity to thank them all for their support, and I look forward to sharing further success in the future.

Thank you for joining CVS Group today for the Engage Investor Q&A. We have Richard Fairman and Robin Alfonso here to answer questions. We have had a number of questions pre-submitted and submitted live. [Operator Instructions]

So kicking off with the first question, what has been driving sales growth lately? And are there any standout products and services?

So we've announced like-for-like growth of 2.7% for the first half, which is across all three of our divisions. Our largest division is our practice division, and that includes our Australian practices and also all of our U.K. practices. And there, we've seen growth in Australia, so strong growth there. In the U.K., we've seen mixed growth. We've seen strong demand for our referral hospitals and some of our practices that provide the more advanced care. So where animals get ill or injured, we've seen strong demand for those types of services. We've seen weaker demand for the more preventative care, so regular checkups, routine checkups or free and welling treatments.

Online, we've seen strong growth in revenue across both food and drugs. And in our laboratory business, we've also seen growth both from our own practices, but also third-party independent practices. And roughly half of our revenue in labs is from CVS internal practices and roughly half external. So good growth across the group, albeit mixed within the U.K. companion animal practices.

Are you able to give an indication of the revenue that comes from preventative care plan versus reactive treatment?

We can. We can do. I think what we've shared in the past is our Healthy Pet Club membership is now over 0.5 million members. It provides -- it's an annual contract pay monthly, provides annual vaccination, half yearly checkup, your annual flea and warming and also access to discounted veterinary services.

I think we've shared in the past, and you can look in terms of the average cost per month is around GBP 15. So the annual revenue from that, which is ostensibly a preventive health care scheme is about GBP 80 million to GBP 90 million per annum. What we've not done is then share the split of preventative care within our fees and drugs revenue. But for a Healthy Pet Club scheme, it's about GBP 80 million to GBP 90 million per annum.

Cost of living is a concern for many households. Are you seeing these pressures flow through into the pet industry? And can you explain why vet bills have gone up so much in recent years?

So cost of living pressures do impact. We're not immune from recessions or clients feeling some of those cost of living pressures themselves. What we have seen is strong demand where animals get injured, clients invariably bring them in for treatment. And as I said earlier, that's reflected in the strong demand we've seen for our referral hospitals and also those sites that can do the more advanced reactive care. Where we have seen weaker demand is for the more, I guess, discretionary spend, so healthy animals visiting practices less often and maybe consumers tightening their belts somewhat in those areas.

In terms of veterinary bills, bills across the industry have increased over the last 10 years, and the CMA have given some data on that. When you take account of the kind of inflationary pressures, the increase above inflation is actually driven by the quality of care that we can now provide and also the way that care is provided and the structure of veterinary practices. So 10 or 20 years ago, out of care, for instance, was provided by day vets who were on call in the evenings and weekends.

Now out of those care is more advanced. It's provided by dedicated teams. And those teams are often trained in emergency and critical care. So the quality of care we can give out of ours is vastly improved. And elsewhere, we can do far more for animals now than ever before. And therefore, there is a cost that comes with that, but clients invariably want the best possible care for their animals. And clearly, there's a cost to delivering that care. So when you take account of inflation and quality of care, prices have risen in line with those two factors.

Maybe I could just add, if you look at the stat the CMA themselves announced, they said they saw price increases of between 60% to 70% over the last 8 to 10 years. Now as a headline stat, that sounds like a lot. But when you break that down, that's rough just over a 5% increase for each of those years. And as Richard said, inflation during that period was about 3.5% to 4% of that 5%. And therefore, the small incremental amount above inflation, we think is because of the improved quality of care that's been available over that period.

Is there a margin benefit from owning your own labs, online retail business, buying groups and white label pharmaceutical products?

There is, I guess, some synergies from having an integrated group. If you take our labs, they do provide obviously services to our practices. And clearly, having that work provided in-house improves our group margin. If it wasn't for us having our own labs, we'll be using third-party labs and obviously missing out on that revenue, but also the margin it brings.

Online retail, we tend to attract non-practice clients. So most of our online retail clients are not CVS practice clients. And again, that does create incremental margin. In the first half, having said that, the margins in Animed Direct or online retailer were pretty flat. We do expect to return to growth in the second half.

Buying groups provide a service to third-party independent practices because -- we have scale. We can buy drugs more cost effectively than an independent practice can. But for a fee, we allow independent practices to access our scale and share some of that buying power. And obviously, the more practices and the more drugs we are buying drugs for, that increases the volumes overall. So that also helps our group margins.

And on white label pharma, is that beneficial?

Most of our drugs we buy through a wholesaler, and we negotiate a wholesaler discount based on the volume of drugs we provide -- we purchase. We then also go to the manufacturers and negotiate rebates based on the volumes of drugs we buy from those manufacturers. So we work to kind of what we call net-net prices, so net of the wholesaler discount, net of the manufacturer rebate.

For certain drugs where there's high volume and predictability of future demand, we have approached manufacturers directly and negotiated directly with them. That means we bypass the wholesaler and we negotiate slightly better rates and the manufacturer will work with us to brand those under our own brand.

So that can improve margins. Equally, though, we need to make sure that we are going to sell the entire quantity we've committed to purchase. And therefore, it's not that straightforward. We need to tread carefully there. But we have seen slightly enhanced margins that -- but also the ability to pass on cheaper prices to consumers from having own brand medicines.

Are existing practices growing? Or are you relying on buying more clinics to drive growth?

So across the group, we are seeing growth, but we are actively acquiring additional practices in Australia, and those acquisitions are driving incremental growth to the group. In the U.K., we stopped acquiring practices just over two years ago when it became clear that the CMA were moving towards a market investigation. We just felt it wasn't appropriate to carry on acquiring because of the uncertainty of the CMA process.

Now that we've had the CMA's provisional decision in October, we have certainty again at last. So we do consider there will be U.K. acquisition opportunities present themselves in the future, and we do -- we are confident in our ability to make further acquisitions. So that should also hopefully drive incremental growth in the future.

Is the long-term growth driver for CVS more about increasing spend per pet or increasing the number of pets under care?

Both, but I'll let Robin elaborate.

Yes. I think definitely both. I think the third category I would add to that is just increasing the number of visits per animal under our care. So I think the one thing that we have seen recently, we've delivered good growth. I think what Richard referenced earlier that within our companion animal business, we've seen the higher acuity work, our referral hospitals perform well. But where we have seen some footfall challenges is for those preventative health care visits into our companion animal first opinion practices. And our focus there is how do we -- how do you drive volume through our practices. And we think that we're keen to remind our clients and prospective clients about the benefits of visiting a veterinary practice. And then we want to make it really easy for them to access our services.

So we've recently launched online booking across all of our practices. There are improvements that we can make to that journey. We want to make more of the slots available online, so that makes it easier for them to book. And also, we've been focusing on opening up our clinicians' diaries to allow them to book further in advance. And that's true for online booking and also within practices because we're really keen to ensure that clients don't leave our practice without knowing when their next appointment is.

And then from a communication perspective, I think we've got one common practice management system, which is great. We have all of our client information, contact details, their animals, what life stage they're at. Historically, a lot of our marketing has been led locally, but there is an opportunity for us to really stand up a true trigger-based kind of customer engagement program to really kind of remind people of the value of listening a vet and encourage footfall into our practices.

So I actually think that one of the biggest areas of potential like-for-like growth going forward is volume in terms of number of visits. But equally, as we improve the customer experience, I'm also hopeful that we can win more clients. And when we have those clients, we can do more in terms of the work that we perform for them.

What is your acquisition pipeline looking like? And how important is it to your growth strategy?

So we do see good growth opportunities from further acquisitions. In Australia, we have a pipeline. We have a number of deals where we've had offers accepted, and we're in the process of undertaking due diligence, and we are confident of making further acquisitions in this second half of this financial year. We've now got 55 practice sites in Australia, and we're very confident of growing further through acquisitions.

In the U.K., we don't have any offers accepted. It's the very early stages of acquisitions hopefully opening up again. But we have had some conversations with vendors. And hopefully, that does lead to a pipeline building over the course of this calendar year.

Is Australia more profitable than the U.K.?

Structurally, no, but we've consciously acquired very high-quality practices in Australia. So typically, we are buying larger practice groups, so four or five vets or more. And we're also buying really good quality facilities in great locations. And those types of practices do deliver higher margins. So we've said consistently that our Australia business is higher margin than the group, and we've talked about sort of 25% plus EBITDA margins. Those types of practices though in the U.K. are also high margin. So, at the moment, Australia margins are higher than the group, but equally, it's because of the quality of the facilities we've acquired.

So, Australia sounds like it's been successful to date. Are you looking at new markets?

Yes, I can do. I think from a capital perspective, we have a strong balance sheet. We have low leverage. So we do have the ability to deploy capital. We assess all of our investments based on a minimum hurdle rate of 10% IRR, be it capital investment in our own facilities in the U.K., be it U.K. acquisitions if they present themselves at a value that are as appropriate for us and acquisitions in Australia.

So I think what I'm trying to say is that we have plenty of places currently to deploy capital. The U.K. market, we represent 9% of the market. And therefore, we know the CMA are comfortable with local market share up to 30%. And there's 40% of the market that's yet is unconsolidated independent practices. So there's a large runway in the U.K. if the valuations come down. In Australia, low levels of consolidation, so 15% to 20% consolidation. So, again, a long runway and opportunities for us to grow there. So I don't think there's any need for us to enter a new market. And actually, for me, I'm keen to reestablish a meaningful footprint in Australia.

Having said that, as a management team, we always assess what new opportunities are available. And therefore, we keep a watching brief across other territories. And if something looks like it's an opportunity for us, then that's something we will consider seriously.

Will tele vet services become a threat to CVS and the veterinary industry?

I think tele services can play a part as they did during the peak COVID period where we were restricted for a period of time from providing the kind of more routine services. So, back in COVID, we could only provide emergency and critical care. And we found telemedicine was a way of contacting clients, having discussions about their pets. But there's no substitute for vets physically examining animals. And it's a bit like pediatric care in human health care. Pets can't talk and can't tell you what's wrong with them. So telemedicine is never going to replace the requirement for vets to examine animals and then come up with treatment plans and diagnosis.

So, yes, it can play a part, and I think it can play a part in things like triage, particularly out of hours. So if a client has a concern about their animal, the ability to phone up a vet and talk through their concerns, absolutely telemedicine plays a part there. But ultimately, animals need to be examined by vets and the vet expertise is kind of required. So I don't really see it as a threat. I think it's an opportunity to improve kind of operational performance, but it won't be ultimately a threat.

I mean I agree. I don't think it's a substitute, but it will be complementary to the services we already provide.

Can you update us on the historic vet shortages in the industry? And our newly qualified vets staying longer at CVS compared to industry averages?

So I'm pleased to say the position there has improved. A few years back, probably in the early 2020s, we saw more of a chronic shortage of vets, partly because of the Brexit referendum results and the fact that the uncertainty that caused created less European vets coming to the U.K. and also some of the European vets working in the U.K. previously decided to return home.

Now we've got Brexit certainty. We're seeing a return of EU vets coming to work in the U.K. We've also seen the number of university vet schools in the U.K. increase, and therefore, the number of graduate vets increasing each year, and that will accelerate further from here. So the Royal College of Veterinary Surgeons are now modeling and suggesting that there won't actually be a shortage of vets at all in the U.K. for companion animal practices in the next kind of five to six years. So things are looking much more positive than they were.

In terms of graduates, we have a very advanced graduate induction program, and it's recognized, I think, across the industry as being a leading graduate induction program. So we attract our fair share of graduates, and we have the pick of the best graduates. And we've seen our retention across not just graduate vets, but also experienced vets improve significantly over the last six or seven years. And that's reflected in the attrition rates that have fallen significantly, but also the engagement scores. So we measure colleague engagement monthly through a very simple kind of eNPS survey and colleague engagement has improved in that period as well.

Can you update us on the CMA and what the findings mean for CVS?

Robin?

Yes, I can do. So CMA have issued their draft remedies. We're expecting the decision on the final remedies to happen at some point in March, and that's the current timetable. The statutory deadline is May 22, so that has to be concluded by then. If I think about some of the remedies, I suppose I can put them into broad buckets. There's some transparency measures that we are entirely comfortable with. So things like price transparency, which we already put on our websites, things like transparency of ownership. We'd like to think that most of our customers are aware that they're using a CVS practice, but we are going through a process of jointly branding and rebranding our sites.

There's a bucket around regulatory change. And actually, that's more around the regulator's ability to be able to regulate the likes of myself and Richard as directors of veterinary businesses. whereas at the moment, they can only regulate the vets themselves that work at veterinary businesses, and we're entirely comfortable with that. There's some other kind of regulatory changes they're recommending around access to our sites and minimum standards. And we already voluntarily comply with the practice standard scheme that's run by the RCVS. So we're ready to do that.

And then the third bucket is just around access and pricing of medicines within our practices. And the biggest remedy of which currently is this recommendation to cap prescription fees at GBP 16. Now we currently charge more than GBP 16. However, I think the impact for us is small, and it takes a very small increase in fees to offset the impact for us in the P&L. I suspect if they do continue with that remedy, then the entire market will behave in the same way.

I think when you look at the evidence and proportionality of those remedies, that's the one that feels slightly disproportionate for us. But having said that, when you look across the 21 or so remedies that they've outlined, we're comfortable with all of them. In fact, I suppose our expectation is potentially the CMA will rein them in and they may be slightly narrower when it comes to the final decision, which we expect imminently.

I would just add as well that I think the CMA process has been painful, frankly. It's had a significant impact on vets who have read and nurses who have read the press articles, accusing them of being expensive. There have been articles accusing vets of not caring about the animals and only being in it for the money, which are completely so far from the truth. It's -- those are unfair. But finally, we've got CMA certainty. And as Robin said, we'll get the final decision very shortly, and that will bring a close to the process, which is, yes, long overdue.

What is the impact of AI on the veterinary sector? And will it be positive or negative?

Positive again, I think similar to the kind of telemedicine question. So AI can play a part. But as I said earlier, there's no substitute for vets examining animals and a physical inspection. So AI can't replace vets. AI won't be able to treat animals. What AI can do is help with the efficiency of our operations. We're already trialing AI in the consulting room. So we are trialing an AI scribing tool, which actually will lead to hopefully a richer experience for the client because the tool works by listening to the vet and the vet having to vocalize their examination, but it essentially produces the clinical notes for the vet at the end of the consultation. And that should reduce time, but also lead to a richer experience for the client because the vet has to vocalize their examination and then the clients will really understand what's happening and what the vet is doing.

The other benefit from that as well is it allows the vet to very simply give a summary of the consultation and the discussion and send that summary to the client post consultation via e-mail. And there are stats that show that most clients forget kind of 90% of what's told to them in the consulting room. And so that also gives clients hopefully a better experience and also prompts in terms of things they need to watch out for post the visit or actions they need to take or the next checkup they need to book in due course.

With an enterprise value of 7x, would you consider share buybacks rather than U.K. M&A, which may cost more than 7x EBITDA?

So our share -- our market cap compared to our EBITDA is around about the kind of 8x level. And so we do consider capital allocation very seriously as a Board. We do believe in the ability to deploy capital and drive long-term shareholder value, whether through capital expenditure or through acquisitions. But clearly, we have a duty to maximize shareholder value as well as grow the business and provide the right facilities for our colleagues and the right experience for our clients. So this is something we will keep under regular review, but we have no plans to do further share buybacks at the moment.

Do you expect the issues in the Middle East to have any impact on your business and forecast?

Very limited impact. We have very little reliance on the oil price or impact from the oil price. We obviously buy energy and utilities. And there, we have forward bought contracts, so we are protected at the moment. Clearly, if there's a knock-on impact on consumer spending power, that can impact us in due course. So, hopefully, the conflict is short-lived and things get resolved very quickly.

On a practical point, traveling to Australia is more problematic and the flights will therefore be more expensive and longer, but that's a very practical minor point, but very limited impact expected from that conflict.

I suppose it's been helpful that we've just appointed our first permanent Managing Director of Australia. So previously, we have had an Australia MD, but it's been a second from the U.K. So we now have our first permanent Managing Director. They have support colleagues in Australia also supporting the operations. So I don't think it necessarily needs us to travel to Australia actually for those operations to run very smoothly because we have a team already in place.

Okay. Thank you to Richard and Robin from the management team today for joining us. This concludes CVS Group's investor presentation. Please take a moment to complete a short survey following this event, and the recording of this presentation will be made available on the Engage Investor. I hope you enjoy today's webinar.

Welcome to this presentation of CVS Group's Interim Results for the 6-Month Period to December 2025. I'm Richard Fairman, CEO. And later, you will also hear from Robin Alfonso, our Chief Financial Officer; and Paul Higgs, our Chief Veterinary Officer.

Our purpose at CVS is to give the best possible care to as many animals as possible, and I'm pleased to report on continued progress in the period. We completed our step-up from AIM to the Main Market on the 29th of January 2026, and we hope this will bring benefits from improved liquidity, access to a more diverse pool of capital, index inclusion from March and an increase in our profile as a company.

We have launched our new consumer-facing U.K. companion animal joint brand under CVS Vets, and you will see this reflected in this presentation. Now this reflects the care, value and service, which we are renowned for as a trusted partner for our clients. Our presence in Australia is growing with 3 acquisitions completed in the period and a further 2 practice acquisitions completed so far in the second half of the year.

We have continued our disciplined capital investment, improving our facilities, clinical equipment and technology, and we are confident this investment will drive long-term growth in shareholder value. We welcome the launch by DEFRA of a consultation into the outdated Veterinary Surgeons Act from 1966, and we are engaging with that process and encouraging CVS colleagues to do so. And we look forward to the CMA's final decision in the coming weeks. We continue to trade in line with market expectations, and Robin will provide further detail on our financial performance later.

Highlights for the first half include revenue increased by 5.8% in the period with growth across all divisions and like-for-like sales improving. Adjusted EBITDA increased by 3.9% to GBP 67.7 million. We invested GBP 17.5 million in capital expenditure but maintained leverage at 1.41x. We saw an improvement in both our client Net Promoter Score, which improved to 81.2 and our employee Net Promoter Score to 10.

Having first entered Australia in July 2023, we have grown to 33 practices operating across 55 sites. Our Australia practices are performing well and now present circa 10% of group revenue. We have consciously focused on acquiring larger, high-quality small animal first opinion practices with strong leadership teams, great facilities and excellent reputations. These practices tend to deliver higher margins, and hence, Australia now represents circa 15% of group EBITDA. The Australian market has low levels of consolidation, and we have a strong pipeline and an expectation that we will complete a number of further acquisitions in the remainder of this financial year.

Whilst the level of corporate consolidation is higher in the U.K. at circa 60%, we have less than a 9% market share, and we are confident there will be an opportunity for CVS to make further high-quality acquisitions following the conclusion of the CMA process. The CMA market investigation has been underway for the past 2.5 years, and we have proactively engaged with the CMA throughout this time. This is to both help the CMA understand the sector and some of the challenges but importantly, to ensure an appropriate outcome in the best interest of consumers. The CMA announced their provisional decision in October 2025, and this has brought much needed certainty.

We do not agree with all of the CMA proposed remedies and feel some such as the proposed price cap on prescription fees are not justified by their findings. However, we are comfortable with them and have already implemented price lists on our practice websites and have commenced the rollout of our new joint branding. We will continue to support the CMA during the remainder of their investigation and look forward to the publication of their final decision scheduled for the coming weeks.

I will now pass over to Robin, who will provide further color on our financial performance in the period.

Thanks, Richard. H1 2026 marked a return to organic like-for-like sales growth as well as growth from acquisitions, cementing a positive first half performance. In May 2025, we sold our crematoria operations and have therefore, restated our H1 2025 numbers to reflect these operations as discontinued. Revenue grew 5.8% to GBP 356.9 million, benefiting from acquisitions made in the current and prior year with like-for-like growth of plus 2.7%. Our like-for-like sales growth is adjusted for working days and on a constant currency basis. It excludes current year acquisitions, and it only includes prior year acquisitions from the same month this year as they were acquired in the previous year.

We are pleased that revenue growth has been achieved across all divisions. This growth was achieved despite continued softer market conditions in the U.K. and a backdrop of lower visit numbers in small animal practices. Client demand for our most advanced referral care remains strong. Adjusted EBITDA grew 3.9% to GBP 67.7 million, benefiting from increased revenue. And adjusted EBITDA margin of 19% was down 0.3 percentage points versus prior year with cost efficiencies and synergies largely offsetting the increase in national living and national minimum wage alongside increases in employers' national insurance contributions from April 2025, which have an annualized impact of circa GBP 4 million and GBP 8 million, respectively. Margin of 19% continues to be within our 19% to 23% range ambition.

During the period, GBP 7 million was recognized in respect of net research and development expenditure tax credits, which was the same as H1 2025. And free cash flow increased 16.2% to GBP 34.4 million due to the increase in adjusted EBITDA and favorable operating cash conversion, which was up 3.3 percentage points on H1 2025 and in line with our stated ambition of greater than 70% operating cash conversion.

With robust cash generation and a strong balance sheet, we've continued to invest in future growth through CapEx investment and further acquisitions. We also undertook a small share buyback to support the move to the Main Market, which concluded in January 2026. As a result of these investments, net bank borrowings increased GBP 28.8 million since June 2025 to GBP 160.2 million and leverage increased to 1.41x. Leverage is well below our 2x target ceiling and provides firepower to continue with our ongoing expansion in Australia and the U.K. in due course.

Adjusted EPS of 40.2p was up 2.2p, benefiting from an increase in EBITDA. We continue to invest in our practice facilities, clinical equipment and technology with total capital expenditure of GBP 17.5 million, and Paul will touch on these more later. Consideration for acquisitions of GBP 23.3 million represents continued momentum in Australia with a further 2 acquisitions of 9 practice sites. Pleasingly, performance has been in line with expectations. The group's short-term expansion focus will be in Australia, where there is a strong pipeline of exciting opportunities. There may also be acquisition opportunities in the U.K. following the end of the CMA investigation.

Moving on to Slide 10. I'm pleased with the resilient EBITDA performance, which has been underpinned by growth in acquisitions. Revenue increased to GBP 356.9 million from GBP 337.3 million, benefiting from acquisitions and like-for-like growth of 2.7%. Australia now represents about 10% of group revenue. EBITDA increased to GBP 67.7 million from GBP 65.1 million, benefiting from revenue growth with resilient adjusted EBITDA margin, which largely held up despite wage inflation in addition to investments in online marketing and IT.

We are pleased to have offset the vast majority of cost headwinds from the national insurance contributions and national living and minimum wage pressure and deliver EBITDA margin within our stated range of between 19% to 23%. We continue to target investments primarily in practice facilities and equipment to expand margins over the longer term.

We've seen revenue growth across all our divisions. The veterinary practice division comprises our companion animal, referrals, farm animal and equine veterinary practices as well as our buying groups, Vet Direct and MiPet Insurance. This division delivered 5.4% growth in revenue, benefiting from acquisitions and a return to like-for-like growth despite softer market conditions in the U.K. and a backdrop of lower visit numbers in small animal practices. Client demand for our most advanced referral care, however, remains strong. EBITDA grew 6.3%.

The laboratories division provides analyzers in practice, which supports testing in-house, for which we supply the reagents for the tests and diagnostic testing services. Revenue in this division increased 10.3%, benefiting from improved case volume and increased analyzers in practice. EBITDA grew 17.8%.

And our online retail business, revenue increased 8.5%, benefiting from improved visits and conversion rates following the launch of the new website in February 2025. Profitability in the first half was impacted by cost of living compounded by price elasticity testing, resulting in the division only breaking even in the first half. Profit is expected to return in the second half of the year.

And in head office, we saw an increase in costs of GBP 1.2 million due to increased share of option costs with options having not vested in the past few years, continued investment in people, especially in Australia and continued investment in IT. I'm pleased to say the momentum seen across the group in the first half has continued into H2 2026, and we continue to trade in line with market expectations.

On to Slide 12, we have a healthy balance sheet with GBP 350 million of debt facility and headroom within our leverage target ceiling and therefore, capital available to support our investment opportunities. Our stated ambition is to invest GBP 30 million to GBP 50 million per annum on capital investment and over GBP 50 million on acquisitions, which has primarily been in Australia but acquisition opportunities may open up in the U.K. post the CMA conclusion. We have funding in place to support this growth.

The group continues to generate healthy cash flows with operating cash conversion of 75%, which is in line with our Capital Markets Day ambition of 70%. Free cash flow of GBP 34.4 million benefited from increased EBITDA and operating cash conversion. With robust cash generation and a strong balance sheet, we've been able to continue to invest in future growth through CapEx investment and further acquisitions. We also undertook a small share buyback to support the move to the Main Market, which concluded in January 2026. As a result of these investments, net bank borrowings increased GBP 28.8 million from June 2025 to GBP 160.2 million and leverage increased to 1.41x. Leverage is well below our 2x target ceiling and provides firepower to continue with our ongoing expansion in Australia and the U.K. in due course.

We have committed bank facilities to February 2028 and have also hedged GBP 100 million of debt, swapping variable SONIA to fixed, securing an interest rate, including current margin of circa 5.5% through to February 2028. We take a considered and disciplined approach to capital allocation, actively engaging with shareholders and reviewing the approach on a regular basis. Presently, it's considered that investments in capital expenditure and acquisitions to be appropriate uses of capital to deliver long-term accretive growth to shareholders. Investments are carefully appraised against our hurdle rate of greater than 10% IRR and in most cases, deliver positive return on capital employed over the longer term.

Our investment unlocks opportunities as well as continued investment opportunities in facilities, clinical equipment and technology, there is a strong pipeline of acquisition opportunities in Australia and acquisition opportunities in the U.K. in due course. We look forward to enhancing the client experience further and delivering on our purpose to give the best possible care to as many animals as possible.

I will now pass to Paul, our Chief Veterinary Officer, to update you on our strategic progress.

Thanks, Robin. Our new brand reflects who we are and what the letters CVS stands for: care, value and service. In the half, we have launched our dual brand approach initially to colleagues at our leadership conference in November, digitally to clients on our new consumer websites and then through updated signage, which is being rolled out across our U.K. companion animal sites as we speak.

Our colleagues have welcomed this fantastic opportunity to speak about our common purpose and identity. Our client-friendly branding encapsulates why pet owners trust us, CVS, how our colleagues support and guide pet owners to find the most appropriate and individualized care and what we offer pets and their owners day in and day out. We are just a short walk away. Our new signage is fresh and consistent, where practices retain their local name but shows that they are part of the wider CVS Vet Group.

I'm pleased that our vision of being the veterinary company people most want to work for is delivering high colleague satisfaction and reduced attrition. We've launched our new clear employer brand centered around clinical quality, learning, progression and support. And these 4 elements encapsulate what our colleagues tell us is great about working at CVS. We aim to provide the best possible care to animals. We have a market-leading learning, education and development program with the platform Knowledge Hub and have established career pathways in our teams, especially for nurses and receptionists. Finally, we support. A practitioner is never alone, whether that's through support from our practice teams, our market-leading vetorracical service or well-being support. We listen and we care.

We also inspire to support exceptional employee experience, we have empowered accountable leaders, which drive and support our teams. Our colleague satisfaction has taken a knock in recent years, and we're pleased with the progression of our employee Net Promoter Score to positive 10 at December, ahead of our FY 2026 target of plus 5. Attrition continues to be stable and even reduced marginally in the half. And I would like to take this opportunity to thank all of our CVS colleagues for their outstanding commitment and dedication and for the care they provide to our clients and their animals.

Our considered approach to capital allocation supports our disciplined investment program. In H1 2026, we invested GBP 17.5 million in capital expenditure and continue to be committed to invest in our U.K. practices. In the half, we spent GBP 6.5 million on practice relocations, refurbishments and associated clinical equipment. We have a consistent, welcoming look and feel, which provides attractive spaces for both clients and colleagues. This investment has contributed to the improvement in both our client and employee engagement as measured through the group's respective Net Promoter Scores.

A practice-wide refurbishment or where required, full relocation can benefit the clinical offering, practice teams and clients over the long term. We typically seek larger footprints, providing additional space to address the client demand for our services, improve clinical activity, for example, through imaging equipment, dental or endoscopy, and these new facilities provide a positive environment for our clinical teams to work in, which not only can improve their well-being but also attract further clinicians and provide secure business continuity over the long term. For now, the focus on capital expenditure remains in the U.K, but there will be opportunities to invest in Australia sites as we grow.

Over my career as a vet, the progress of veterinary care is second to none. What we can offer today is vastly improved from that of 2010 or even 5 years ago and what clients expect from us has changed too. research underpins evidence-based veterinary medicine and CVS is committed to turning evidence into improved patient care. Each year, our colleagues contribute to over 100 peer-reviewed publications and present more than 30 research abstracts at leading conferences, sharing insights that shape the future of veterinary practice.

We also fund external research collaborations with a recently funded research collaboration making the national news by providing a comprehensive human and feline comparative oncogenomics analysis that gives insight into feline cancer but also potentially human cancers, too. The CVS is shaping the future of veterinary nursing through a pioneering nurse optimization PhD launched in partnership with the Royal Veterinary College. This 3-year project will explore how evidence-based frameworks can enhance job satisfaction, patient care and workforce sustainability and helping define the role of veterinary nurses for years to come.

In 2025, antimicrobial stewardship, AMS, remains a key research priority. Antimicrobial resistance is one of the most urgent global health challenges, and CVS is leading efforts to promote responsible prescribing and robust infection control. Our CVS-funded PhD project with the University of Liverpool is focused on reducing the use of highest priority, critically important antibiotics or HP-CIAs and promoting diagnostic-led prescribing. Alongside this, a 12-month collaboration with the University of Bristol across more than 50 CVS practices is already showing promising results, reducing antibiotic use and encouraging behavior change through CPD training and case-based learning.

Now these are just a small number of examples of the wide-reaching research that we support. By embedding research into everyday practice and partnering with leading institutions, CVS is driving continuous improvement and fostering a culture of learning across our group. Our research agenda is focused on practical solutions that benefit patients, clients and the profession.

I'll now pass over to Richard for some closing remarks.

Thank you, Paul. We have taken a number of positive steps in the period, which positions CVS to deliver further enhanced value for all our stakeholders. As you have seen through this presentation, our new CVS Vets companion animal consumer brand is now live with circa 60 practices already rebranded. Our strategy for growth is clear to provide great client service and care to as many animals as possible. Our clients appreciate this care and the value and service we provide as reflected by the further increase in our client Net Promoter Score.

We maintain a disciplined investment approach and have a healthy balance sheet. Strong operating cash flows support our ability to make further investment in growth. Our step-up to the Main Market is complete, and we look forward to index inclusion in March. We remain on course to deliver against market consensus for the full year. And notwithstanding short-term headwinds in the U.K., we remain confident in delivering further growth. These interim results and the improvements we have made in the financial year-to-date reflect the continued dedication and professionalism of all our colleagues.

I would like to take this opportunity to thank them all for their support, and I look forward to sharing further success in the future.

All right. Good morning, everyone, and welcome to this live stream of CVS Group's full year financial results following the publication of those earlier this morning. I'm Richard Fairman, CEO. And alongside me, I've got Robin Alfonso, our CFO; and Paul Higgs, our Chief Veterinary Officer.

We have delivered further growth across our group in the past year with improved U.K. operations and continuing expansion of our platform in Australia. Revenue increased by 5.4% to GBP 673.2 million. We faced some challenges particularly in the first half of the year with softer market conditions in the U.K., but it was pleasing to see significant improvement in the final quarter, leading to a positive full year performance with like-for-like growth of 0.2% across the group and 1% in our core practice division. And then improved trading continued into the first quarter of the new financial year.

Adjusted EBITDA increased by 9.4% to GBP 134.6 million from both acquisitions and continued disciplined cost management, and adjusted EBITDA margin increased by 70 basis points to 20%. Adjusted operating cash conversion was 76.9% for the year, ahead of our stated ambition of circa 70%. And in light of these strengthened operating cash flows and also the proceeds from the sale of our Crematoria business at a 10x EBITDA multiple, we finished the year with leverage of 1.18x.

We completed a further 7 practice acquisitions in Australia, and we've completed a further 2 acquisitions comprising 8 practice sites so far this new financial year. And that brings our total footprint in Australia to 51 sites.

We're coming towards the end of the CMA market investigation. And whilst it was disappointing to face a further delay in the announcement of their provisional decision, we do look forward to receiving that very shortly. Now the strong market fundamentals remain attractive and we are well positioned for further growth. We've strengthened our company, and we're confident with the future growth prospects.

So with that, I'd now like to open the call to questions from analysts. Now given this call is being live streamed, when you ask a question, please state your name and firm. And I think that will be helpful.

Charles?

Charles Hall from Peel Hunt. Richard, could we start on Australia? And can you just give a feel for how the market is trending there, now you've got plenty that have been under your belt for every year? Also discuss the synergies you're starting to see and a little bit on the cost of acquisitions and the pipeline.

Yes. So if I start with the overall performance in Australia. We've been quite selective, as you know, in terms of the acquisitions we've made. We're looking for high-quality, typically larger practices with 4 or 5 vets or more. And we're buying practices consciously in areas of high population and, therefore, areas where there are lots of pets. They also happen to be the areas where vets want to work and live.

So that disciplined approach has served as well. We're pleased with the performance in Australia, and we've seen continued growth and the practices are performing in line with business cases. In terms of the market, demand has been good. The margins of those practices are above our group margin. And in terms of investments and financial returns, I'll probably pass over to Robin to comment.

Yes. So I think in terms of -- you asked a couple of questions around kind of cost of acquisition and pipeline. So our cost of acquisition largely are in two buckets. There's the cost of the DD and also Australia has stamp duty. But also in Australia, typically, when we value a business, I think we've said this before, 80% is paid upfront and then a proportion of 20% is deferred over a period of time. That gives us some protection but also leaves the vendor with some skin in the game and the opportunity to earn further value. There are -- that is a contingent consideration and that gets booked as a cost of acquisition through the P&L.

In terms of pipeline, the pipeline is strong. I think in Australia, there are probably three major players. There's Greencross, there's VetPartners -- different from VetPartners in the U.K. and ourselves. And together, we have about 15% to 20% of the overall market compared to 60% in the U.K. So there's good opportunity. We spent just under GBP 30 million last year. To date, in the first quarter, we spent about GBP 23 million on two acquisitions, one larger acquisition of 6 sites. And we have a strong pipeline of opportunities where we've got agreed terms, we're just running through DD, and a much longer list of opportunities of people that we're talking to. So there's a really good strong opportunity for further growth in Australia.

That's great. And is there anything to highlight from the Sydney acquisition?

I think the main highlight for us is we were -- I mean, it's a decent group of practice in Sydney, the capital in Australia. What we were slightly -- we knew it was a premium asset. But actually, when we made the acquisition, there were a number of people even in the U.K. that said, we are aware of that group of practices, and it's really pleasing to see that you've acquired it and it's part of your portfolio.

So I think, for us, what we have been seeing is as we acquire premium assets, veterinary is quite a small community. Vendors will speak to other colleagues, and we're finding that we're getting an increased kind of inbound traffic now into us in terms of potential further opportunity to acquire their practices in due course.

Kane?

Kane Slutzkin from Deutsche. Just, guys, on the sort of exit rates going to '26. You've obviously spoken about a better second half. It looks like vet practices did sort of 2% in the second. But could you just talk about that exit rate going into this year, bearing in mind the Q4 comp was relatively soft for the cyber event? So anything you could help us with there?

And following on from that, sort of just thinking more medium term, the 4% to 8%, you're still kind of reiterating as a target. I appreciate timing is uncertain. But what do you need to do to build back up to there?

Yes. And maybe I'll pick the second part first and Robin can pick up the first part. But in terms of our 4% to 8% medium-term ambition, absolutely, we are committed to that and confident we can get back to that level. I guess a number of factors at play there. One is hopefully improved consumer confidence in the U.K. We all eagerly await the announcement in November in the latest budget. But it does feel like consumer confidence is slowly returning, but we want that to continue.

Certainty from the CMA process, I think, will help because the scrutiny the sector has been under over the last couple of years and some of the kind of press articles haven't helped the sector. And then there's the cohort of puppies and kittens born in their peak COVID period that are now typically kind of healthy animals, kind of 4 or 5 years old. But we all know they will age and, as like humans, more things go wrong in later life and more clinical care is required. So there's that kind of tailwind, if you excuse the pun, that will benefit our numbers in due course.

In terms of the final quarter and leading into the first quarter of the new financial year, maybe just ask Robin to give a bit more color.

Yes. So Ken, we haven't shared like-for-like number in terms of the year-to-date like-for-like percentage growth. But we have given some, I suppose, data points. H1 was minus 1.1%. We said we didn't return to growth until Q4 and the full year landed at positive 0.2%. So simple math would dictate, we saw probably underlying 2% to 3% growth through the final quarter. And yes, we had a cyber event in that final quarter in our comparatives, but it's pleasing to see that growth continue into the new year.

And maybe just one quick one. Just thinking now, we've got the guide is sort of -- seems consistent with consensus. Just wondering sort of how much inorganic growth -- I mean, I probably need to do the numbers myself, but while I'm here, if you could help me.

Just sort of post period end acquisition, the bigger one you've announced, how much revenue and EBITDA is that? Is it sort of like GBP 10 million to GBP 15 million of rev and maybe GBP 2 million, GBP 3 million of EBITDA? I'm just trying to get a sense of how much -- it's becoming a little bit tricky now with all the acquisitions to kind of see what underlying is really nowadays. But yes, anything you can help me with there?

Yes. Well, maybe if I just provide you EBITDA numbers, if that's okay. So we spent GBP 23 million in year-to-date. I think we've shared before multiples in Australia are good. They are accretive levels. So it's about 8x multiple-ish on average, sometimes a little bit less, sometimes a little bit more. That would be about GBP 2 million to GBP 3 million annualized EBITDA. We did -- some of those acquisitions were made towards the back end of the quarter. So you just have to then prorate that.

And in terms of revenue, we've said margins in Australia is slightly better than the group. So you can perhaps solve that, yes.

Andrew?

It's Andrew from Investec. Just following up on those questions actually. One on Australia. Do you have a sense what the rate of the market consolidation is there? I know the presentation says you're sort of 15% to 20% market consolidated. And what I'm trying to do there is just understand how much runway until we get to a situation similar to where we are in the U.K., right? And then obviously, being an analyst looking further, are there other -- or at what stage do you start to think about other geographies when you're comfortable that Australia is going in the way that you want? So that's question one.

And then just following up on Kane's question on 4% to 8% like-for-like growth rate. Just trying to understand what the drivers are in the same way Kane was. Is that a continued value accretion? Are you continuing in with contextualized care? I'm just trying to think about what the answer is. Is it value, volume, mix? What's the big driver in getting to 4% to 8%?

Yes. And Paul, do you want to start with that part? And I'll pick up the first part of the question.

Yes. I think you pick up a great point around how do you create that value. And we've got a big focus at the moment on client experience. And that's because as a profession, perhaps we've had a great focus on our ability to deliver fantastic care for animals, and I think we need to progress how we give that care to our clients, our pet owners in particular as well and really demonstrate the value of the care that we provide.

So I have absolutely no doubt that our colleagues provide the best clinical care they possibly can. We can absolutely demonstrate that and demonstrate that value to our clients, and that's work that we're continuously doing. So I think that is a big action that we're taking at the moment, driving confidence in the consulting room.

We have our new graduate program now. We have a new consulting skills program, which enables that communication with a real refocus from not necessarily a clinical outcome being the right outcome but shared decision-making, so ensuring that our pet owners leave that room with the absolute confidence they've made the right decision for them and for their animal, which is a slightly different shift potentially to always making the right diagnosis. It's a subtle reframing but it's an important one.

And in terms of the market share and the consolidation levels, Robin talked about the two major groups being VetPartners and Greencross. There's also a smaller private equity-owned consolidator called Vets Central. They're owned by Pemba Capital. So all three of those groups have actually more practices than we do. VetPartners is about 250; Greencross, under 200; Vets Central, I think, over 50.

I think in terms of scale, given the size of our practices, we're probably third in terms of scale. But in terms of consolidation, we think the market is between 15% and 20% consolidated, so plenty of opportunity for continued expansion of CVS. We will continue to be disciplined, though, in that we want those high-quality larger sites because they derisk our entry in that if you lose a vet post acquisition, if you've got a larger team of vets, it's much easier to accrete into. And we've been pleased with the approach and performance so far.

But we definitely see a strong pipeline of further opportunities. In terms of other people consolidating, there is competition for deals but probably less than it was in the U.K. a few years ago pre the CMA process.

Great. So you're not thinking you need other geographies at the moment?

Not yet. But equally, in due course, there may well be further opportunities for growth. Australia was really attractive because it's English-speaking and the approach to clinical care is very similar to the U.K. and the clinical standards are very similar. So it had very attractive features. And obviously, with low levels of consolidation, that was an added attractive feature. So that's not to say there won't be other markets in due course, but certainly not in the short term.

Charles -- sorry, James?

James Bayliss from Berenberg. Just two, if I may. On the online platform, can you just talk us a bit through where you are in terms of the investments you've been making to improve kind of customer click through, the migration to cloud and how you see that then driving a recovery or kind of further performance on that side of the business over the next few years?

And then secondly, in the context of vets up 4.5% year-on-year organically, can you just give us an update on what the kind of the wider backdrop is in the market in terms of recruitment, perhaps the differences between the U.K. and Australia in that regard?

And maybe Paul can pick up with the latter. In terms of the platform itself, we did invest in the first half of the last financial year in improving the Animed Direct website and the kind of customer journey. We have seen an improvement in revenue growth in the second half, and that will continue into the new financial year.

But the market online is tough. We have seen some clients trade down from the premium pet food that we sell online, so the likes of Royal Canin and Hill's, et cetera. And some clients are buying kind of cheaper supermarket pet food. So there's definitely been a trade down of some clients. But we are continuing to invest in that platform, both in the experience for the client but also driving more repeat business as well.

So subscriptions, for instance, is a new feature we've recently added. We will continue to try and optimize that platform. And hopefully, we do see a return to growth in the pet food side as well.

If I pick up on that in terms of the kind of feeling within the workforce, there's no doubt that there still is a workforce shortage. And the Royal College have identified that they anticipate that shortage to become less relevant within the next few years, and we're certainly seeing a continuing improvement in the number of vets working in the U.K. Some of that is an increase in the number of vets coming through vet schools. We have new vet schools that have opened in the last couple of years. And we have larger cohorts of vet students coming through.

Obviously, that's contributing to our less experienced number of vets in the U.K. But we're also seeing through the activities that we undertake around caring for our colleagues that we're seeing better retention within the profession. And in fact, we've seen a much easier recruitment into some of those tougher to staff areas in the country, so a lower reliance on locums, for example. And I think that increase of 4.5% really reflects on that, that actually we're able to recruit into some of these more challenging areas now.

Charles?

Charles Weston from RBC. A clarification question first, please. In terms of the guidance for this year, you said you're happy with consensus, which I think is GBP 141 million for EBITDA. Is that including the acquisitions that you've made in the first couple of months or excluding them?

I mean, I can't talk for every analyst on what's included in the numbers, Charles. I'd imagine it would include some of those acquisitions, yes, is my expectation.

I guess analysts probably don't include the acquisitions that you just announced. So is there...

Some may, some may not. And then they definitely don't include future acquisitions.

Okay. And then secondly, just on the cyber sort of softer comps for the second half, which I think was a couple of percentage points, effectively a tailwind. Is there a tailwind from cyber in the first few months of this year that's giving you a bit of a sort of a head start on a year-on-year basis?

And if you think about the 4% to 8% that you expect in the medium term and the kind of roughly 0 that you had last year, could the like-for-like be sort of halfway in the middle of this year? Where should we be thinking on the like-for-like for '26?

Yes. I think the start of this year, the comp is far less soft than it was in the final quarter. I think the one disruption that we continue to face maybe in the first quarter of last financial year was that our teams are still getting used to their new practice management system. But by and large, that disruption was far less.

The peak period of disruption and, therefore, softer comp was the final quarter when we had the cyber incident and then we rapidly migrated onto a new platform. And Paul can maybe comment on how vets are finding that system now.

Yes. I mean, early adoption is always a challenge. But actually, you really only took 6 weeks to roll the majority of our practice out onto that, so very much within the end of the last financial year and previous financial year. Now we're seeing significant engagement with that. In fact, I think we asked our colleagues now how they would -- whether they would prefer this system versus the previous system. Hands down, they would prefer this system.

It enables a much wider access to client records. For example, if you work in one of our night services now, you can access the records from any of our practices that are sending cases in, whereas previously that wouldn't have been possible overnight. So it's definitely freed up an awful lot for our colleagues. There are efficiencies within that system. So for example, there's a function there which is simply called Forms, which is a really simple way to input your clinical data and to also formulate that into, for example, a discharge sheet. So actually it's now bringing significant efficiencies into practice.

And in terms of the 4% to 8%, we are still confident of returning to that, as I said earlier. We talked about the building blocks to that. The one thing I didn't mention, I guess, is price. We have been quite conservative on price in the last couple of years, as you'd probably expect during the CMA process. But we absolutely believe that clients will pay for high-quality care. And we continue to invest in improving our practices and investing in our teams to provide that continued great care to our clients and their animals.

So with some pricing, the return to consumer confidence, the investment in quality and also making sure that we service the increased demand that will come from that COVID cohort of puppies and kittens, there are a number of building blocks you can see that will hopefully get us back to that medium-term ambition.

And just last question from me, if I can. In the prepared remarks on the video, you said that there was an expectation that there may be U.K. M&A opportunities opening up at the end of the CMA investigation. Have you sort of had conversations with potential vendors already? Is that -- do you envisage that being more sort of trading between the groups or more of a sort of independence, perhaps selling up with perhaps additional pressure from CMA?

Yes. I think probably the latter in that. I suspect there are a number of independent practice owners that may have considered selling their practice and have possibly been frustrated over the last couple of years because we know Linnaeus bought a small group in the Rutland area, but there haven't been many transactions that have happened.

We're all eagerly waiting the CMA findings, and they will apply across the entire sector, not just for the corporate groups. And therefore, we do expect some vendors will want to approach corporate groups and look to sell their practices post CMA process.

We will continue to be selective. We would hope multiples have come down from the peak a few years ago. But we absolutely believe there are U.K. acquisition opportunities. And we have less than a 9% market share. So there are plenty of white spaces in the U.K. where we don't currently own practices or we own very little. And selective acquisitions can certainly augment the practices that we already own.

Thanks, Charles. Sahill?

Sahill from Singer Capital. Charles actually just got one of my questions in there. But just sort of building on the UK acquisition, how should we be thinking about your view on capital deployment going forward over the next few years or so? Because clearly, Australia has got good momentum at the moment. The multiples are attractive. Just sort of help me get a sense of that.

Secondly, where are we in terms of greenfields in the U.K. and the ones you opened a few years ago? Just an update on that would be really helpful and plans going forward once we get clarity on the CMA.

And probably one for Robin. Given last year, there was a lot of cost headwinds and you did really well in terms of improving margins, do you have a sense of what kind of like-for-likes you'll need this year to offset any cost inflation that you're anticipating in the current financial year?

Do you want to start with that one? And I'll pick up the capital deployment.

Yes. So as you rightly say, we faced in some national wage increases last year, some national insurance contribution increases. We said the annualized impact of that was between GBP 11 million to GBP 12 million. It started from April '25, so there's some annualization of those costs. Against that, we have been looking at our cost base.

I suppose the areas that we've been looking at to kind of help drive, there's some efficiency savings in terms of headcount and we've delivered some of that already. We delivered sufficient to kind of offset those costs. There are also some purchasing synergies. We every day look at buying of drugs and make sure that we have the most optimum net-net price. But we actually think there's an opportunity right now for us to drive that harder, and I think that will help offset.

And then we've locked in some favorable kind of utility cost savings. We forward buy our gas and electricity. So those three will offset, I believe, most of the cost inflation. We've not shared kind of a like-for-like guidance number, but I think the kind of the market consensus revenue and the like-for-likes will be sufficient to offset kind of cost inflation, plus those activities.

And then in terms of capital deployment, Sahill, we are in a good position, I guess, in our leverage reduced during the year. And we finished the year at 1.18x. So we have capital to deploy and we will continue to adopt our selective and disciplined investment criteria. In terms of those investments, we absolutely believe there's an opportunity too for further accretive acquisitions in Australia and, as I said, returning to U.K. acquisitions hopefully in this financial year. But we will continue to be selective in terms of the practices we acquire.

We're also committed to improving our existing facilities in the U.K., and that's both the practices themselves and the space both from a client perspective but also for our teams, and also investing in high-quality equipment because obviously that allows us to provide that great care to our clients and their animals. So we will -- the three of us sign off on all investments, and we will continue to adopt that disciplined approach. But we do see options ahead in terms of further investment for growth and we're seeing good returns from that investment at the moment.

In terms of greenfields, we have opened a few greenfields in the last few years. And that, I guess, if we don't see an acquisition opportunity in a certain area we want to expand, that can be helpful. I suspect in the U.K., our focus will be more on acquisitions rather than further greenfield sites. That's not to say there won't be any. But I guess, we do feel acquisitions will be back on the table this year.

Any questions from the call?

So there's no questions from the calls but we do have one from the webcast from Roland French from Penman Securities. How are you incorporating AI or machine learning into the practices and your broader processes? And is there an opportunity here?

Absolutely, there is. And I'll hand over to Paul, who's actually using some of the AI at the present.

Yes. I think we need to probably separate out the AI and machine learning, which is a separate component. We certainly at the moment don't use machine learning from a clinical diagnostics perspective, and that's importantly from my perspective as Chief Veterinary Officer that, at the moment, we don't have sufficient evidence to be secure in the way that, that's functioning. So we're exploring it but not something that we're engaging fully with.

What we are using AI with is support in the consulting room, again, to build in efficiencies. So we have a trial at the moment with a scribing AI function, which will record the consultation so that the vet has to make no notes at all, can fully engage with the owner. And it will then structure the clinical notes in the same format every single time. And it can then also automatically create a note for the owner take away, so what would have, within the profession, be termed at lay person's interpretation of the clinical notes.

So it actually really builds in not just efficiencies in there but enables really great clinical record taking, which can be a challenge in the time frame that we have, but it also allows our colleagues to engage directly with owners and not have to worry about writing those notes at the same time. So that's the key element of AI that's in practices that we are using at the moment.

It's just worth adding, we also already use AI in terms of those processing of invoices through AP. That's something we've been using for some time already.

Brilliant. Any other questions?

That's all the questions from the webcast. Over to you, Richard, for closing remarks.

Yes. Thank you. So first of all, thank you all for joining this presentation this morning, and thank you for your continued support.

I'd like to close by thanking our fantastic team of colleagues because these results are all due to their contribution and significant focus on providing great care to our clients and their animals, and we really appreciate all of their hard work. And I look forward to sharing further success with you all in the coming months and years. Thank you.

Welcome to this presentation of CVS Group's full year financial results for the year ended 30th of June 2025. And I'm Richard Fairman, CEO. And later, you will also hear from Robin Alfonso, our Chief Financial Officer; and Paul Higgs, our Chief Veterinary Officer.

I'm delighted to report on another successful year of growth across our group with improved U.K. operations and continued expansion of our platform in Australia. We have successfully navigated some significant challenges over the past 12 months, and the strong market fundamentals remain attractive. We entered the new financial year with a strengthened company, which is well positioned for further success.

Revenue increased by 5.4% to GBP 673.2 million, following a start to the year that was impacted by softer market conditions in the U.K. with like-for-like sales growth of minus 1.1% for the first 6 months. It was pleasing to see a significant improvement in the final quarter, leading to positive full year like-for-like growth and improved trading, which continued into the first 2 months of the new financial year. Adjusted EBITDA increased by 9.4% to GBP 134.6 million from both acquisitions and disciplined cost management and adjusted EBITDA margin increased by 70 basis points to 20%.

The sale of our crematoria business in May 2025 was at an attractive 10x EBITDA multiple and the capital generated from the divestment provides additional firepower for continued selective organic investment in the U.K. and expansion in Australia at multiples that are value accretive to the group. The crematoria business has been treated as a discontinued operation and has therefore been excluded from the revenue and EBITDA numbers shared today, including the comparatives for the previous financial year, which are now shown for continuing operations only.

We delivered improved adjusted operating cash conversion, which at 76.9% for the year is ahead of our stated target of circa 70%. In light of the strengthened operating cash flows and the proceeds received from the sale of our crematoria business, net bank borrowing decreased to GBP 131.4 million at 30th of June 2025 and leverage reduced to 1.18x. We completed a further 7 Australia veterinary practice acquisitions in the financial year, comprising 15 practice sites and a further 2 acquisitions since the year-end, comprising 8 practice sites, bringing our total footprint in Australia to 51 sites. It is also pleasing to see an improvement in both our client and colleague net promoter scores, which Paul will expand on later.

We are also expecting to have further clarity on the Competition and Markets Authority review with the publication of their provisional decision later this month. We have a clear strategy for growth focused on continued high standards of clinical care, delivering excellent client service and supporting a highly skilled team of colleagues to provide this care and service. I am pleased with the progress made over the past financial year, which positions CVS well for future growth.

Our focus is to provide a great veterinary experience, which we believe is centered around the trust shared between us, the client and their animals. That trust is underpinned by understanding the clients' requirements, the care which is provided and the quality of service. We continue to look at ways to reinforce those values and improve on the client experience. We are confident that this focus on people and clinical care will continue to drive organic growth. This will be augmented through further acquisitions with significant opportunity in Australia and the U.K. post the conclusion of the CMA investigation.

We continue to operate in 2 attractive markets, which offer significant further opportunity. In the U.K., there remains white space where we can augment our current footprint with further high-quality acquisitions following the conclusion of the CMA process. In Australia, I'm delighted that within the past 2 years, we have firmly established our presence and now operate 51 sites across major urban conurbations. Our investment is delivering returns with good like-for-like performance and adjusted EBITDA margins in excess of 25%.

Importantly, we have built on our reputation as a people-focused business committed to high-quality clinical care. We have focused on acquiring larger, high-quality small animal first opinion practices with strong management teams, great facilities and an excellent reputation. As already mentioned, since the financial year-end, we have completed a further 2 acquisitions comprising 8 sites, one of which is the marquee acquisition of Sydney Animal Hospital, a multisite practice group in Sydney, which has a fantastic reputation.

Throughout the CMA market investigation, we have adopted a proactive approach in liaising with the CMA. This is to both help the CMA understand the sector and some of the challenges we face, but importantly, to ensure an appropriate outcome in the best interest of consumers. We have sought to engage proactively with the CMA at every opportunity. The CMA formally extended its timetable in the summer and initially said it plans to publish its provisional decision in September 2025.

In light of this, we consciously decided to delay the announcement of these results so that we could both digest its provisional decision and also discuss the proposed remedies in our forthcoming investor roadshow. It's disappointing that there has been a further delay with the provisional decision now expected in the middle of this month, but we look forward to reviewing this shortly. We will continue to support the CMA in the remainder of its investigation and have advanced plans in place to implement the fine and remedies package, which we anticipate will include joint branding of our practices and the publishing of standardized price list.

I will now pass over to Robin, who will provide an update on our financials.

Thanks, Richard. I'm pleased that 2025 marked another year of growth and a year in which continued investment places the group well for the future. Revenue grew 5.4% to GBP 673.2 million, benefiting from acquisitions made during the current and prior year and like-for-like sales growth of 0.2%. Our like-for-like sales growth is adjusted for working days and on a constant currency basis. It excludes current year acquisitions, and it only includes prior year acquisitions from the same month this year as they were acquired in the previous year. Like-for-like sales performance for much of the year was impacted by softer market conditions in the U.K., most notably within our Online Retail business division and our Laboratories division, which experienced a loss of a major customer.

Our Veterinary Practice division was also impacted by continued economic pressures, the CMA investigation and the COVID-19 puppies and kittens now in their young, healthy adult stage of life. It was pleasing, however, to see a return to like-for-like growth in the second half of the year, and this positive momentum has continued into full year '26.

Adjusted EBITDA grew 9.4% to GBP 134.6 million, benefiting from top line revenue growth and disciplined cost management. Adjusted EBITDA margin of 20% was up 0.7 percentage points versus prior year despite the increase in National Living and National Minimum Wage, alongside increases in employer national insurance contributions from April 2025. CVS estimates the annualized impact of these to be in the region of GBP 3 million and GBP 8 million, respectively, but is confident that cost synergies and growth will help to offset the impact of these on the group.

During the year, GBP 15.1 million was recognized in respect of net research and development expenditure tax credits, which is up GBP 12.8 million in the prior year. Free cash flow increased 22.2% to GBP 72.2 million due to favorable adjusted operating cash conversion, offset by an increase in interest expense of GBP 4.6 million, following an increase in both the cost of borrowing and average drawn debt during the year in support of our continued commitment to invest in our practices and acquisitions.

Operating cash conversion was 76.9%, which was up 6.8 percentage points on the prior year and ahead of our stated ambition of greater than 70% operating cash conversion. With a robust cash generation, coupled with the proceeds received for the divestment of the crematoria operations, only partially offset by GBP 63.8 million spent across acquisitions and capital expenditure, leverage fell to 1.18x with a decrease in net bank borrowings of GBP 36.6 million to GBP 131.4 million. Leverage is well below our 2x target ceiling and provides adequate firepower to continue with our ongoing expansion in Australia. And adjusted EPS of 80.1p was down 3.2p, impacted by an increase in the effective tax rate, an increase in depreciation from capital investment in recent years and an increase in finance expense from increases in both cost of borrowing and average drawn debt during the year.

We continue to invest in our practice facilities, clinical equipment and technology with total capital expenditure of GBP 33.2 million for continuing operations, in line with our Capital Markets Day commitment to invest between GBP 30 million and GBP 50 million per annum. Included in this is our work to modernize our IT infrastructure to support modern cloud-based IT solutions.

Consideration for acquisitions of GBP 30.6 million primarily represents continued momentum in Australia with a further 7 acquisitions of 15 practice sites with performance in line with expectations. The group's short-term expansion focus will be in Australia, where there is a strong pipeline of exciting opportunities, and there's an expectation that U.K. acquisitions may open up following the end of the CMA investigation.

Revenue increased to GBP 673.2 million from GBP 638.7 million, benefiting from acquisitions. GBP 52.1 million of revenue in the year was generated from Australia. The Veterinary Practice division comprises our companion animal, referrals, farm animal and equine veterinary practices as well as our buying groups, Vet Direct and MiPet insurance. This division delivered 6.7% growth in revenue, benefiting from acquisitions.

Performance in the year was impacted by continued economic pressures, the CMA investigation and the COVID-19 puppy and kitten cohort in its young, healthy adult stage of life. It was pleasing, however, to see a return to like-for-like growth in the second half of the year. And as the COVID-19 puppies and kittens age, the more veterinary assistance they will require.

The Laboratories division provides analyzers in practice, which supports testing in-house, for which we supply the reagents for the tests and diagnostic testing services. Revenue in this division decreased 0.6%, impacted by reduced volume of diagnostic testing of circa 14% following the loss of a key client. Concentration is weaker across our remaining external clients and it is pleasing to see a return to growth post that client loss.

And our online retail business had a challenging year, impacted by customers trading down for more expensive clinical and life stage diets and disruption from migration to a new website. I'm pleased to say the momentum seen across the group in the second half has continued into full year '26. We've seen good EBITDA performance with adjusted EBITDA increasing 9.4% to GBP 134.6 million from GBP 123 million, benefiting from increased revenue from acquisitions alongside disciplined cost management. Adjusted EBITDA margin increased to 20% from 19.3%, both benefiting from increased revenue in the year, coupled by disciplined cost management and a GBP 2.3 million increase in net research and development expenditure tax credits recognized.

Employment wage inflation, additional national insurance costs and investment in colleagues resulted in employment costs as a percentage of revenue increasing to 52.2% from 51.9%. And other costs as a percentage of revenue decreased to 6.2% from 6.5% with inflationary pressures partially offset by a GBP 2.3 million increase in net research and development expenditure credit to GBP 15.1 million. The group is targeting further cost synergies and efficiencies to protect adjusted EBITDA margin following the U.K. budget changes in November 2024, which resulted in increased employment costs.

I'm pleased with the underlying progress made across full year '25. As pets age, they will require more medical intervention alongside improved customer experience and potential new revenue opportunities opened up with our new practice management system. We look forward to delivering further growth over the medium, longer term and full year '26 is off to a good start. We have a healthy balance sheet with GBP 350 million of debt facility and headroom within our leverage target ceiling and therefore, capital available to support our investment opportunities. Our stated ambition is to invest GBP 30 million to GBP 50 million per annum on capital investment and over GBP 50 million on acquisitions, which for now continues to be focused in Australia. The group continues to generate healthy cash flows with full year operating cash conversion of 76.9%, ahead of our Capital Markets Day ambition of 70%.

With robust cash generation, coupled with the proceeds received from the divestment of the crematoria operations, only partially offset by the GBP 63.8 million spent across acquisitions and capital expenditure, leverage fell to 1.18x with a decrease in net bank borrowings of GBP 36.6 million to GBP 131.4 million. Leverage is well below our 2x target ceiling and provides an adequate firepower to continue with our ongoing expansion in Australia. We have committed bank facilities to February 2028. We have also hedged GBP 100 million of debt, swapping variable SONIA to fixed, securing an interest rate, including current margin of circa 5.5% through to February 2028.

We continue to assess each of our investment opportunities against our disciplined investment criteria, ensuring long-term returns remain above 10% IRR. Our investments are value accretive and delivers an attractive return on investment in excess of our cost of capital. Our investment unlocks opportunities, investment in facilities and equipment support retention and ability to attract clinical talent as well as allowing us to provide the care our clients require.

In addition, we've built our new cloud-based practice management system, launching online booking across our companion animal practices with the ability of one-click repeat prescriptions and reminders. We look forward to enhancing the client experience further with technology in the year to come.

I will now pass to Paul, our Chief Veterinary Officer, to update you on our strategic progress.

Thank you, Robin. Across our practices, both in the U.K. and Australia, we are focused on supporting our trusted and compelling client proposition, helping us to provide the best possible care to animals. This trust is based on providing fantastic care for our clients and their animals, ensuring that we take the time to build strong relationships between professionals and owners and show that we care for them and how their experience with us feels. Ensuring that our owners feel the value of this care through transparency and the contextualized care approach and demonstrating that we have a consistent quality of service, where we provide the right clinical expertise in the right way to meet individual owner needs. This approach builds on the clinical excellence of our colleagues and ensures it caters for every owner's needs so that we are the trusted partner for any pet and owner.

We've undertaken various consumer surveys and focus groups over the past 12 months to better understand how U.K. pet owners want to access care for their pets. And although there is a perception of a difference between corporate and independent vets, there was a clear view that pet owners understand that there are benefits when the vet has access to and support from the resources and broad clinical expertise available in a larger group. CVS has an opportunity to showcase these benefits over the coming year, indeed, ensuring that we combine the perceived strengths of both the corporate and independent models can further enhance our client satisfaction, which I'm proud to say excelled further with a client Net Promoter Score now 78.9. We believe our focus on enhancing the client experience and approach to shared decision-making in the consultation room is driving this excellent score.

We're pleased that clients continue to value the service that we provide. Our focus on high-quality but contextualized clinical care, along with investment in our practice facilities, provides a safe and reassuring environment for our clients and exceptional care for animals that is reflected in our strong client Net Promoter Score. We remain committed to our vision to be the veterinary company people most want to work for, and our colleagues set us apart.

As we continue to grow our business, we have once again increased the number of vets that we employed. We've seen an increase in the average number of vets we employed in financial year '25 compared to financial year '24 of 4.5%, excluding acquisitions. At CVS, we are renowned for the support we provide our practice teams. During the year, we launched a handy pocket resource called MiGuide. This clinical resource sits in a well-structured portal that can be accessed easily on a phone. It provides our clinical colleagues with instant access to clinical guidelines, advice on emergency care and tools to support decision-making. MiGuide improves confidence in evidence-based recommendations to clients and most importantly, should help our colleagues to improve clinical outcomes and also that client experience.

Given the challenges across the veterinary sector, alongside the continued negative publicity from the CMA investigation, we are pleased to see that our employee Net Promoter Score improved in the year to plus 3.1. Although we are pleased with this improvement, there is always more that we can do. Myself and my executive colleagues continue to work with our practice teams to improve their experience of being part of the CVS team, and we are looking for a further improvement in FY '26 to positive 5.0. I'm also pleased to say in the backdrop of continued sector scrutiny that our colleague attrition has remained stable over the year, showing that we continue to provide the support our colleagues are looking for.

Our facilities not only provide great working spaces for our teams, but also welcoming areas for our clients. In the year, we spent GBP 33.2 million on capital investment, of which GBP 10.8 million was spent on property relocations and refurbishments. On this slide, we want to demonstrate the benefits of this investment. As Robin mentioned, all of our investment opportunities are assessed against a disciplined hurdle rate of greater than 10% IRR. However, it's not just financial returns that our investments deliver. A practice-wide refurbishment or where required, full relocation can benefit the clinical offering that practice teams and clients experience over the long term.

We typically see larger footprints providing additional space to address the client demand for our services, improved clinical activity, for example, through imaging equipment or dental equipment or endoscopy. These new facilities provide a positive environment for our clinical teams to work in, which not only can improve their well-being, but also attract further clinicians and provide secure business continuity over the longer term. A sometimes smaller investment, but one just as exciting for our practice teams is new state-of-the-art equipment. It's rewarding for all involved to enhance what could be an underserved clinical provision to their local area, potentially improving patient outcomes.

A simple upgrade of an ultrasound machine can transform a team's ability to care for their patients. We remain committed to spending between GBP 30 million to GBP 50 million per annum on CapEx to further improve our facilities, equipment and technology. Our investment provides an opportunity for growth, improves well-being and satisfaction across our teams and provides a pleasant and welcoming environment for our clients and their animals and helps us to deliver individualized clinical care.

Our fourth strategic pillar is that we take our responsibilities seriously. This spans across everything that we do as a company and as a profession. Today, we released our fourth sustainability report, updating our stakeholders on our progress against our 4 sustainability pillars: Care for our planet, care for our people, care for our clients and their animals and care for our communities. Our global team of environmental champions have once again helped us to reduce our carbon and energy use. We've created new career pathways across many roles, and we are piloting AI technology to help write clinical notes, which frees up time to focus on clients' needs alongside seeing a sustained reduction in prescribing the highest priority critically important antibiotics.

I'll now pass over to Richard for some closing remarks.

Thank you, Paul. Whilst the past year has had its challenges, we have successfully laid the foundations for further growth and CVS is well positioned to continue to compete successfully and to deliver enhanced value to all stakeholders. Our established platform in Australia is delivering, and we are confident of making further acquisitions in the current financial year in line with our strict investment criteria. We have already completed on 2 further acquisitions this year for a combined consideration of circa GBP 23 million. We are well capitalized with a healthy balance sheet, headroom in both our committed undrawn facilities and our leverage, and we have continued strong operating cash flows.

The new financial year is off to a solid start. And on the assumption of an improved economic backdrop, certainty following the conclusion of the CMA market investigation and as the COVID-19 cohort of puppies and kittens age and naturally require increased veterinary care, our medium-term ambition remains to deliver like-for-like growth of between 4% and 8%. The financial results announced today and our future growth opportunities reflect the continued dedication and professionalism of our colleagues. I would like to take this opportunity to thank them all for their support and commitment to providing great client and animal care, and I look forward to sharing further success in 2026 and beyond.