INVESTORS TAKE BITE OUT OF NVL’S SHARE PRICE
ORMEAU-BASED veterinary services company National Veterinary Care (NVL) has seen its share price plunge after it warned it expects weak trading conditions in the past two months to hit full-year earnings.
Investors punished the company sending the share price down 8.5 per cent to close at $2.34.
The company, which is due to report its full-year result on August 27, said it has revised its underlying pre-tax earnings margin - that is earnings expressed as a percentage of total revenue down from 16 to 17 per cent to 15 to 16 per cent, or $12.4 million to $13 million.
Guidance for statutory revenue remains 25 per cent above FY17.
NVL said revenue across its general practice clinics was below expectation in May and June, which had effected the EBITDA margin.
The acquisition of three clinics had settled later than forecast, which also effected earnings for the past quarter.
However, NVL said underlying revenue growth remained strong for FY18, and it expects the final figure to come within the range of $81.5 million to $82.3 million.
The company is also forecasting underlying revenue to grow by 25 per cent or more this financial year
Managing director Tomas Steenackers said the business is focused on growth through strategic investment including increasing its back office support systems.
“The business has continued to deliver good top-line growth and we are optimistic about the range of opportunities during the next 12 months,” he said.
NVL sees an opportunity to grow its management services arm, which looks after independent clinics, as well as its Best for Pet loyalty program, which has grown by 72 per cent in the past year.
It has also had a good response to the opening of its Melbourne Veterinary Training Centre.