Annual Report and Financial Statements
for the year ended 30 June 2026
Care, Value and
Service in every
moment
Strategic Report
1
Purpose framework
2
Highlights
4
At a glance
6
Timeline
8
Investment case
10 Business model
12 Market overview
16 Our strategy
18
Key performance indicators
22
Chair’s statement
24
Chief Executive Officer’s review
28 Our people and culture
32 Sustainability
35
Non-financial and sustainability
information statement
43
Streamlined Energy and Carbon
Reporting (SECR)
46 Clinical review
48 Financial review
56 Risk management
Introduction
Contents
We are united by
a simple ambition
To provide Care, Value and Service to every client, every animal
and every colleague, every time. From first consultations to
advanced treatments, our teams combine expertise, compassion
and collaboration to deliver the highest standards of care.
Supported by the scale and expertise of the wider CVS Group,
our practices are able to reach more animals and make
a meaningful difference every day.
Corporate Governance
66 Governance at a glance
68
Chair’s introduction to governance
70
Board of Directors and
Company Secretary
72 Corporate governance statement
79
Section 172(1) statement and
stakeholder engagement
83
Audit and Risk Committee report
88 Nomination Committee report
93 Remuneration Committee report
The Directors’ Report
110 Directors’ report
Financial Statements
116 Independent auditor’s report
124 Consolidated income statement
126
Consolidated statement of
comprehensive income
127
Consolidated and Company
statement of financial position
128
Consolidated statement of changes
in equity
130
Company statement of changes
in equity
131
Consolidated and Company
statement of cash flow
132
Notes to the consolidated
financial statements
175
Five-year history – unaudited
176 Alternative performance
measures glossary
IBC
Contact details and advisors
Further reading
Read our Sustainability Report
at:
www.cvsukltd.co.uk/about-us/
sustainability
More stories and content online
at:
www.cvsukltd.co.uk
Purpose framework
Delivering our
purpose every day
Everything we do is guided by a clear sense of purpose
and a shared vision for the future. We believe exceptional
veterinary care starts with great people, and our purpose
and vision provide the foundation for how we work across
the Group.
Together, our purpose and vision shape our culture, guide our
decisions and keep us focused on delivering positive outcomes
for animals, clients and colleagues. As we continue to grow,
they provide a clear direction, aligning our teams behind a
shared ambition and supporting long-term value creation.
Our purpose
Our vision
Supported by four strategic pillars:
To provide the best care to as many
animals as possible
To be the veterinary company people
most want to work for
We recommend and
provide the best care
every time
All underpinned by our ESG strategy “Care at our Heart”
We are a great place
to work and have
a career
We provide great
facilities and
equipment
We take our
responsibilities
seriously
Our values:
Just
culture
Inclusive
leadership
Teamwork
Systems
thinking
Accountability
CVS Group plc
Annual Report and Financial Statements 2026
1
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Highlights
Revenue
(£m)
£712.8m
+5.9%
Adjusted EBITDA
(£m)
£141.5m
+5.1%
Profit before tax
(£m)
£32.0m
-1.8%
Cash generated from
operations (£m)
£102.0m
-10.6%
2025
2024
2023
2022
2026
673.2
638.7
588.9
554.2
712.8
2025
2024
2023
2022
2026
134.6
123.0
121.6
107.4
141.5
2025
2024
2023
2022
2026
32.6
35.2
60.7
36.0
32.0
2025
2024
2023
2022
2026
114.1
95.9
107.9
93.1
102.0
2025
2024
2023
2022
2026
80.1
83.3
98.9
85.8
85.6
2025
2024
2023
2022
2026
8.6
58.8
36.2
73.7
2025
2024
2023
2022
2026
8.5
8.0
7.5
7.0
9.0
Revenue has benefitted from
acquisitions made in the current
and prior year; and like-for-like
revenue (LFL)
1
growth of +2.1%.
Our Veterinary Practices division
was impacted in the year from
a continuation of softer market
conditions in the UK, a weaker
Q4 partly impacted by the extreme
hot weather with owners opting
to keep their pets at home and the
COVID-19 puppy and kitten cohort
in their healthy young adult years.
1. LFL is an APM, see page 176 to 180.
Adjusted profit before tax has
benefitted from an increase in
adjusted EBITDA and reduction
in interest, partially offset by
an increase in depreciation.
Adjusted EBITDA increased
broadly in line with revenue
with margins stable at 19.9%
(2025: 20.0%), despite an increase
in National Insurance contributions
and wage inflation. The Group
recognised net Research and
Development Expenditure Credits
of £15.7m (2025: £15.1m), in line
with prior year, including a
provision release of £6.6m
(2025: £3.0m) that was expected
following another year of making
a claim. Read more in note 2.
Adjusted EPS benefitted mainly
from the increase in adjusted
profit before tax, with a small
benefit from the reduced average
number of shares in issue
following the share buyback
programmes undertaken during
the year. The effective tax rate
was 27.4% (2025: 26.9%).
The decrease in profit before tax
has been impacted by an increase
in depreciation and amortisation
following a sustained step up in
capital and acquisition investment
in recent years, and an increase
in exceptional costs related to the
Competition and Markets Authority
(CMA) market investigation and
the move to the Main Market.
Basic earnings per share (EPS)
decreased to 24.4p due to profit
on the disposal of the Crematoria
operations in 2025, inflating basic
EPS in the prior year. Basic EPS
for continuing operations has
decreased 1.9p from 26.3p
in 2025.
A full-year dividend of 9.0p for
2026 is proposed following the
solid financial position and
performance during the year.
Cash generated from operations
decreased due to one-off negative
working capital movements
during the year mainly from timing
of Research and Development
Expenditure Credit (RDEC) receipts
and delivery of buying synergies
which resulted in a change to
buying relationships.
Adjusted earnings
per share (p)
85.6p
+6.9%
Adjusted profit
before tax (£m)
£84.9m
+7.6%
Proposed dividend
per share (p)
9.0p
+5.9%
Basic earnings per share
(p)
24.4p
-66.9%
A track record of growth
Financial highlights
Operational highlights
• We successfully moved from the Alternative Investment Market
(AIM) to the Main Market of the London Stock Exchange.
• We refinanced our £350.0m loan facilities on improved terms,
extending the term to May 2030 with an option for a further
one-year extension.
• We made significant progress on our Group joint branding,
reinforcing the benefits of scale, expertise and resources.
• The CMA review concluded, providing greater clarity and
regulatory certainty, supporting the delivery of our strategic
objectives. Legally binding orders have been published
by the CMA on 22 September 2026.
•
We have acquired a further six practices in Australia (14 practice
sites) during the year, continuing our growth strategy.
• We have continued investment in our facilities and equipment,
with total capital expenditure of £36.4m.
2025
2024
2023
2022
2026
78.9
79.0
87.9
75.5
84.9
Read more on our key performance indicators (KPIs) on
pages 18 to 21
24.4
APM
APM
APM
APM
Read more about our
alternative performance
measures (APMs) on
pages 176 to 180
CVS Group plc
Annual Report and Financial Statements 2026
2
What makes us CVS
“CVS Vets” joint
brand launched
“We believe that Care, Value and Service
are what defines us and so we are going
to be loud and proud about the CVS name.
This brand is much more than a logo and
a name. It is about who we are, and what
clients should expect from us: Care, Value
and Service.”
Richard Fairman
CEO
In November 2025, we launched our joint brand “CVS Vets” to
our colleagues at our annual leadership conference. This was
well received and this brand sits alongside our existing local
brands. This brand has been rolled out digitally across our
practice websites, and now, through new signage, over the
majority of our practices in the UK.
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
At a glance
Who we are
What we do
CVS Group is a leading veterinary services provider,
and a constituent of the FTSE 250 Index on the London Stock
Exchange, with operations in the UK and Australia. We combine
the scale of our Group with the expertise of our colleagues
to invest in clinical excellence, innovation and professional
development in order to provide the best care for as many
animals as possible.
We provide veterinary services through a network of first
opinion and referral specialist veterinary practices across
the UK and Australia. Our operations are supported by our
Laboratories division, providing diagnostic services and
in-practice desktop analysers, and our online retail business,
enabling us to provide integrated clinical, diagnostic and
preventative healthcare services.
Veterinary Practice sites
Veterinary Practices
(£648.2m) (88.3%
1
)
Laboratories
(£35.0m) (4.8%
1
)
Online Retail Business
(£51.0m) (6.9%
1
)
Revenue split %
Veterinary Practices
(£138.7m) (91.6%
1
)
Laboratories
(£11.3m) (7.5%
1
)
Online Retail Business
(£1.4m) (0.9%
1
)
Adjusted EBITDA split %
3
480
Laboratories
1
Online Retail Business
Supporting
better care
for more animals
Read more on our divisions on page 54.
1.
Revenue and adjusted EBITDA share are for continuing
operations including intercompany transactions between
practices and other divisions.
CVS Group plc
Annual Report and Financial Statements 2026
4
Where we do it
UK
Australia
>8,000
UK colleagues
>1,000
Australia colleagues
Number of companion animal practices at 30 June 2026
17
32
7
32
26
1
42
92
66
14
35
24
22
3
6
15
9
1
1
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
5
Timeline
Our journey of
care and growth
Building a
veterinary platform
Group founded
with a strategy of
acquiring independent
veterinary practices.
First
laboratory acquired
1999
2002
2018
2019
2023
2024
2025
Extending reach
Farm animal
business established.
Established Equicall,
an out-of-hours equine
emergency service. Launched
Horse Health Programme,
a preventative healthcare
plan for horses, ponies
and donkeys.
Entered the Australian
veterinary services market
and opened Bristol Vet Specialists in the UK,
a state of the art multidisciplinary referral hospital
and the Group’s largest single site investment.
The Competition and Markets Authority opened
its review into the veterinary services market.
Focusing on
core territories
Divested operations
in the Netherlands
and the Republic
of Ireland.
Agreed sale of
Crematoria operations
to Anima Care UK.
CVS Group plc
Annual Report and Financial Statements 2026
6
Future focus
Areas of focus to drive growth:
• Inorganic expansion
• Product development
• Client experience
• Client awareness and engagement
Entering the
public markets
Company admitted
to trading on AIM,
providing capital to support
accelerated expansion.
Entered pet
cremation market
and launched Healthy Pet
Club, a subscription-based
preventative healthcare plan
for cats, dogs and rabbits.
First dedicated equine
practice acquired
2006
2007
2008
2010
2016
2026
Launched Animed Direct,
now a large UK-based
online pharmacy and
retail platform.
The move to the Main Market
and launch of joint brand
The move to the Main Market
signalled maturity, broader market
visibility and FTSE250 index
inclusion. In addition, we jointly
branded our practices with “CVS
Vets”. The Competition and Markets
Authority review also concluded.
Surpassed 300
veterinary practices
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
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The Directors’ Report
Investment case
Why invest in
CVS Group?
CVS Group plc is a business with strong foundations, operating in large markets, delivering consistent
multi-year growth. It has a clear capital allocation strategy with attractive returns to deliver long-term
value for shareholders. CVS is listed on the Main Market of the London Stock Exchange and is a
constituent of the FTSE 250 Index.
Why invest in veterinary?
Why invest in CVS Group plc?
CVS has the characteristics of a growth compounder, with a compelling investment proposition
1. We operate in large markets with
strong fundamentals delivering
consistent organic growth
Driven by resilient demand and
attractive market dynamics
2. Consistent revenue
growth and sustainable
high margins
19.0%+ adjusted EBITDA
margins supported by scale
advantages and a growing
contribution from higher-
margin revenue streams
3. Consistent strong
cash generation
High cash conversion and recurring
revenues underpin consistent and
predictable free cash flow generation
6. Shareholder returns
Strong free cash flow generation and
balance sheet flexibility deliver
attractive cash returns to shareholders
whether through progressive annual
dividend policy or alternative means. In
2026 we announced two share
buyback programmes totalling £70.0m
5. High returns
on invested capital
over the longer term
Disciplined capital allocation
and selective investment
continue to support
high returns
4. Expansionary capex and M&A
enhance standalone organic growth,
within large total addressable markets
Targeted investment in practices,
technology, including enhancing AI, and
acquisitions enhance organic growth
Continued
humanisation
of pets
Increasing life
expectancy
of pets
Structurally
higher pet
population
Advances in
veterinary care
Resiliency
through
economic
cycles
6
3
2
5
4
1
CVS Group plc
Annual Report and Financial Statements 2026
8
Why invest in CVS
Group plc now?
Large COVID-19
cohort of
pets ageing
The structurally higher
pet population will need
greater care as they
age. Pet population
remains stable
Competition
and
Markets
Authority
(CMA)
uncertainty lifted
We are pleased to have
reached a satisfactory
conclusion with
remedy implementation
well progressed
Valuation upside
Valuation remains well
below pre-CMA levels
With a track record of growth
Revenue
£712.8m
CAGR 8.4%
1
2019
2026
406.5
712.8
Adjusted EBITDA
£141.5m
CAGR 14.6%
1
2019
2026
54.5
141.5
Adjusted profit before tax
£84.9m
CAGR 10.8%
1
2019
2026
41.4
84.9
Adjusted earnings per share
£85.6m
CAGR 9.0%
1
2019
2026
46.7
85.6
Free cash flow
£69.2m
CAGR 11.4%
1
2019
2026
32.5
69.2
1.
CAGR – compound annual growth rate.
APM
APM
APM
APM
Read more on our key performance indicators (KPIs)
on
pages 18 to 21
APM
Read more about our
alternative performance
measures (APMs)
on
pages 176 to 180
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Business model
Delivering care through
scale and expertise
Care at our heart
At Springfield Veterinary Centre, the team combines
strong local relationships with the support of the
wider CVS network. Access to shared expertise,
investment and services enables them to expand the
care they provide, supporting better outcomes for
more animals in their community.
What makes us CVS
CVS operates an integrated veterinary services business,
delivering high-quality care through our network of veterinary
practices, supported by specialist referral hospitals, diagnostic
laboratories and our online retail business. Our model creates
value for clients, patients, colleagues, suppliers and
shareholders while supporting sustainable growth.
Where we operate
CVS operates in the UK and Australia, bringing together
a diverse range of locations and operating sectors, united
by a shared purpose to provide Care, Value, and Service
to clients, colleagues and animals alike.
UK
Our UK business comprises 423 veterinary practices,
inclusive of 9 specialist referral hospitals, alongside 3 diagnostic
laboratories and an online retail business. The scale and
operations enables us to share expertise, invest in clinical
excellence and operational efficiency, and deliver consistent,
high-quality care to clients and their animals across the country.
Australia
Our Australian business includes 57 veterinary practice sites
and represents a significant growth opportunity for the Group.
Supported by an active acquisitions market, we continue
to increase our presence.
The stakeholder value we create
Our colleagues
We empower our clinicians to make the best decision for
clients and their animals, encourage continuous improvement
and share best practice. We provide outstanding support,
development and career opportunities.
5.8
Employee Net Promoter Score
Our clients
We provide the best possible care whilst meeting clients’
individual needs. We offer advice that is experienced by
pet owners as clear, compassionate and trustworthy.
80.6
Client Net Promoter Score
...and their animals
Our colleagues use their skills and experience to advise the
treatment that is the best option for each individual animal.
508,000
Healthy Pet Club members
Our investors
We deliver long-term shareholder value through disciplined
capital allocation, sustainable growth, and a progressive
dividend, underpinned by our Main Market listing.
9
Investor conferences attended
Our communities
CVS’ impact can be felt in the communities in which we
operate. We drive positive change, support animal welfare,
advance veterinary knowledge and protect the environment
and public health.
480
Practice sites in local communities
Read more on our strategy
on
pages 16 and 17
Read more on our KPIs
on
pages 18 to 21
CVS Group plc
Annual Report and Financial Statements 2026
10
Our business model and platform for future growth….
Underpinned by our ESG focus “Care at our Heart”
First
opinion
practices
Healthy
Pet Club
Referrals and
out-of-hours
care
Laboratories
Online
retail
Experienced
leadership team
Infrastructure in
place
to support
improved client
engagement
Sizeable accretive
compounding
acquisition
growth opportunity
Healthy balance
sheet and
strong
cash generation
Operate in
sizeable
and growing markets
with resilient
characteristics
Scale in attractive
markets
with
veterinary
practices at
our core
Care for
our Planet
Focused on energy,
carbon and waste, this
pillar underpins our
ambition to minimise
our environmental
impact while continuing
to develop our services
and clinical expertise.
Care for
our People
Centred on people
development, wellbeing
and equity, and
diversity and inclusion,
this pillar supports an
environment where our
colleagues can grow
and thrive.
Care for our
Clients and
their Animals
Driving a more client-
centric organisation,
this pillar strengthens
how we build lasting
relationships and trust
with our clients.
Care for our
Communities
Through our interaction
with the profession,
society and local
communities, this
pillar reflects our role
in supporting public
health through our ‘One
Health’ workstream.
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Market overview
Expanding care in
growing markets
The veterinary market continues to benefit from a large and
stable pet population and the continued humanisation of pets.
There is a growing appetite for high-quality veterinary care and
improved patient outcomes along with advances in veterinary
medicine and increased life expectancy.
As the COVID-19 cohort of puppies and kittens age they
will need more veterinary intervention. We are focused on
improving preventative wellbeing care as well as providing
reactive care.
The Group operates veterinary practices in the UK
and Australia.
The UK companion animal market remains our largest market
and continues to prove resilient to economic challenges.
CVS has a strong geographical presence in the UK although
there is a still significant runway for further expansion in
many new and existing local markets.
CVS continues its expansion in the Australian market,
which has similar long-term growth drivers to the UK and
continues to exhibit stable growth. Australia is a pet-loving
country with a high proportion of households owning
a pet and spending on pets per household among the
highest globally. CVS is building a solid footprint targeting
major Australian cities and now has a presence in nine
metro areas.
CVS is well placed to benefit from favourable market
trends in both the UK and Australia as well as new
international markets in due course.
Geographical markets
What makes us CVS
CVS’s acquisitions team spans both the UK and
Australia, working together to identify, evaluate
and integrate high-quality practices that align with
our values and growth ambitions.
This year marked a significant milestone for CVS
with the acquisition of Sydney Animal Hospitals,
our largest acquisition to date, comprising seven
companion animal practices across Sydney. Beyond
expanding our network, the acquisition reflected
CVS’s commitment to building long-term partnerships
with practice owners, helping to preserve local
leadership, culture and clinical excellence for
the future.
Growing
together
“Every acquisition is about
people first. It’s rewarding,
helping practice owners and their
exceptional teams find the right
long-term home while supporting
CVS’s continued growth.”
Miguel Valero
Acquisitions Analyst
CVS Group plc
Annual Report and Financial Statements 2026
12
•
Increased population of pets following COVID-19
with pet population levels now stable
• Continued humanisation and desire to treat pets
as a member of the family
• Clinical and technological advancements helping
meet clients’ needs for their pets
• Expansion opportunities through acquisitions,
redevelopments and relocations
The opportunity
Market size
CVS revenue
UK
£633.7m
Australia
£79.1m
Pets populations
UK
3
c.37m
Australia
5
c.32m
Total number of
veterinary practices
UK
2
2026
c.5,600
UK
2
2025
c.5,500
CVS veterinary practices
UK
423
Australia
57
CVS market positioning
7
UK
c.8%
Australia
c.2%
1. Source: 09.3.5 Other recreational goods Veterinary and other services
for pets CP NSA £m – Office for National Statistics (ons.gov.uk).
2. Source: findavet.rcvs.org.uk/home/.
3. Source: https://www.ukpetfood.org/industry-hub/data-statistics-/
uk-pet-population-.html/.
4. Source: www.ibisworld.com/australia/industry/veterinary-
services/623/. The number of veterinary practices across Australia
has declined since 2025, primarily due to corporate consolidation and
the merger of independent local practices.
5. Source: https://animalmedicinesaustralia.org.au/resources/pets-in-
australia-a-national-survey-of-pets-and-people-3/.
6. Source: Animal Medicines Australia, Pet Ownership Report, 2022
– animalmedicinesaustralia.org.au/wp-content/uploads/2022/11/
AMAU008-Pet
-Ownership22
-Report_v1.6_WEB.pdf.
7.
Calculated based on number of sites.
UK
1
2026
c.£6.7bn
UK
1
2025
£6.3bn
Australia
4
2026
c.$6.3bn
Australia
4
2025
$5.7bn
UK
£621.1m
Australia
£52.1m
2026
2025
UK
3
c.36m
Australia
6
c.29m
2026
2025
Australia
4
2026
c.3,600
Australia
4
2025
c.3,800
UK
425
Australia
43
UK
c.9%
Australia
c.1%
2026
2025
2026
2025
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Market overview
continued
Market drivers
and responses
Read more on our strategy
on
pages 16 and 17
A stable pet
population
The pet population is large,
having grown in recent years,
and now remains stable.
CVS addressable pet population
c.69m
Impact
• The UK and Australian pet population
grew in the peak COVID-19 years with
c.37m and c.32m pets respectively.
•
The COVID-19 increase in the pet
population was a helpful market driver in
the short term when kittens and puppies
require vaccinations, initial check-ups
and in some cases neutering.
•
The COVID-19 pet population is now in
its healthy adult life stage; as these pets
become mature animals they will require
more veterinary intervention, such as
treating heart disease, lameness and
diabetes, providing growth in the
medium and longer term.
Our approach
• We continue to expand our network of
high-quality facilities, accessible across
the UK and Australia.
• We provide access to preventative care
through our successful Healthy Pet Club
scheme, and our recently launched
Healthy Pet Club Advanced scheme
which, in addition to preventative and
routine healthcare, annual vaccinations
and regular flea and worming treatments,
provides unlimited consultations.
• We also provide advice to clients on
the appropriate choice of pet for their
individual circumstances and we offer
puppy socialisation classes in a number
of our primary care practices.
Link to
strategy
Advances in
veterinary care
Continued scientific research
leads to further advances in
veterinary care and improvements
in pet life expectancy.
CVS veterinary practices
480
Impact
• Continued scientific research leads
to further advances in veterinary
care offering pet owners a variety
of treatments for their animals.
• This, along with improvements in
technology, has advanced the offering
of telemedicine and remote specialist
diagnostic image interpretation
and advice.
Our approach
• We continue to invest in our clinicians,
offering them industry-leading clinical
training, and we provide a culture of
recommending the best possible care
individualised to each patient. Our three
nurse training centres provide a range of
qualifications for CVS colleagues and
non-CVS clinicians.
• We are striving to have a positive impact
on the veterinary care sector as a whole,
through investing in research projects
designed to better understand and
improve veterinary care. These projects
are studying topics relating to animal
health, clinical practices and
the environment.
• We provide support for medical imaging
and interpretation through our VetOracle™
business. Our VetOracle™ specialists
are able to review images remotely and
provide advice on clinical treatments
for primary care vets within CVS and
third-party owned practices.
Link to
strategy
Availability of vets
to perform services
Clinically-led vision and values
position CVS to outperform
the market in attracting and
retaining talent.
CVS veterinary surgeons
>2,500
Impact
• Whilst there is a shortage of veterinary
surgeons and, to a lesser extent, nurses
in some areas across our markets, we
have seen a significant improvement in
the supply of vets in the past few years.
• We are working with our regulators and
veterinary schools to further increase
the number of vets entering the profession,
along with promoting the right work
being performed by the right role to
enhance job satisfaction.
Our approach
• Our vision is to be the veterinary
company people most want to work for
and our focus on achieving this vision
has enabled us to improve colleague
retention in recent years.
• In 2026, we saw an increase in the
average number of vets we employ by
+0.4% (+3.5% including acquisitions)
and a decrease in nurses and practice
support teams by -1.5% (an increase
of +0.8% including acquisitions).
• We continue to monitor our KPIs along
with tracking colleague satisfaction
through employee Net Promoter Score
and colleague attrition. During 2026 we
have seen positive trajectories in these
metrics. See more on page 21.
Link to
strategy
CVS Group plc
Annual Report and Financial Statements 2026
14
Online retail
Investment in digital capabilities
and pharmacy automation
to benefit from increasing
penetration of the online market.
Animed Direct Trustpilot rating
4.7
Impact
• Customers are switching to shopping
online for their pet food and pharmacy
products, driven by convenience and
product range and remedies mandated
by the CMA.
• Whilst the majority of our clients
purchase drugs in our practices, they
can also purchase a prescription from
our practices and then purchase
medicines online.
Our approach
• We continue to explore opportunities
within our online platform, increasing
our website capabilities and ensuring
we have sustainable competitive pricing.
• We have two pharmacy robots to
improve logistics and fulfilment, increase
productivity and improve quality control
across the veterinary pharmacy.
• We have further automated our
dispatches with a packaging machine
that increases productivity and improves
quality control.
• We launched our new website in the
last financial year, improving usability,
functionality and speed, ultimately
enhancing user experience.
Link to
strategy
Consolidating
markets
Presence in attractive UK local
markets and well positioned
to benefit from further
consolidation in fragmented
international markets.
UK market size
£6.7bn
Impact
• We estimate, with the support of
third-party economists, that c.60% of
the UK practices are under corporate
ownership. In Australia, this is much
less at c.20%.
• We recognise the importance of
privately owned independent practices.
Where private practice owners are
looking to sell, we are well positioned to
acquire and provide benefits to owners,
colleagues and patients.
Our approach
• We support independent practices
through our buying groups, our
laboratories, our referral specialists,
and our VetOracle™ service, all of
which offer services to non-CVS
practices as well as our own.
• We paused acquisitions in the UK
during the Competition and Markets
Authority investigation; however, we
have resumed activity post conclusion
of the investigation and look forward
to welcoming more private practice
owners to the Group.
• We entered the Australian veterinary
services market in 2023, which has
similar dynamics to the UK with
significantly reduced consolidation,
providing increased runway for future
growth of the Group. In the year, we
acquired a further 14 practice sites and
have a strong pipeline of opportunities,
with a further four practice sites
acquired post year end.
Link to
strategy
Humanisation
of pets
Increasing trend from owners
treating their pets as family
members and seeking
high-quality clinical care
and premium products.
CVS client Net Promoter Score
80.6
Impact
• The veterinary sector continues to
benefit from the humanisation of pets
as animals are treated increasingly as
companions and seen as an important
part of family life, as well as positive
contributors to their owners’ improved
mental and physical health.
Our approach
• We continue to prioritise high-quality
contextualised clinical care and provide
all-round animal care, from primary
care, specialist referrals, diagnostic
testing, and accessories to pet food
and consumables.
• We understand the emotional bond
between our customers and their pets
and the wider social benefits of pet
ownership. With continued advances in
clinical care, we can support our clients
throughout their pets’ lives.
• We launched online booking across our
UK companion animal practices last year
to enhance access to our care and help
overall client experience. We continue to
make further improvements to improve
the client journey and digital experience
and are currently trailing AI scribe for
clinical and outpatient notes and
two-way client messaging.
Link to
strategy
Corporate Governance
Strategic Report
CVS Group plc
Annual Report and Financial Statements 2026
15
Financial Statements
The Directors’ Report
Our strategic objectives
• To create opportunities for our people to have diverse and
rewarding careers.
• To be as flexible as possible in all our roles.
• To have the best leaders within our businesses.
•
To offer the best learning, education and development in the profession.
Our achievements in the year
• In the year ended 30 June 2026, we employed an average
of 2,532 veterinary surgeons (2025: 2,447). This is a +0.4%
(including acquisitions: +3.5%) increase from 2025 to 2026,
demonstrating the success of our people-focused strategy.
• Our employee Net Promoter Score (eNPS), which tracks
colleague engagement across our business, increased from +3.1
to +5.8 from 2025 to 2026. The increase reflects the investment
we have made in our workspaces for our colleagues through our
project sparkle initiative.
• Colleague attrition has continued to decrease over the year.
• We continue to see positive increases in the uptake of our Cash
Health Plan and other benefits we offer our colleagues including
salary sacrifice car schemes and enhanced pension
contributions matching up to 6.0%.
• We made a commitment to review nurse salaries which we
supported during our salary review process, recognising the
importance of our nurses in our practices.
• We opened our second fully equipped clinical training venue,
at our Bristol Vet Specialists hospital. This will allow us to deliver
a wider range of courses to more of our colleagues across the
South of the UK.
•
We launched a leadership course for our Senior Leaders. Our
Inspire programme is designed to embed a coaching approach to
leadership, in line with our ICARE Leadership behaviour framework.
• Our Nursing Training School was nominated for a National
Qualifications and Assessments Award.
Outlook
• We are introducing integrated resource planners, allowing our
colleagues to better resource their practices and providing them
with insight into workflows into future months.
•
We will continue to focus on our ICARE Leadership behaviour
framework and our Inspire programme, equipping our leaders
with the appropriate skills to thrive.
• We remain focused on ensuring our nurses feel valued and
remain committed to reviewing the reward structure we have
in place for them.
Our strategic objectives
• To have a culture of recommending the best possible care,
individualised to our clients.
• To deliver industry-leading clinical training.
• To be committed to evidence-based medicine and have a robust
quality improvement framework.
• To ensure our clinicians have access to the right medicines at
the right time.
Our achievements in the year
• We are supporting a CVS Registered Veterinary Nurse to
undertake a PhD at the Royal Veterinary College, University of
London, entitled “Using an action research approach to develop
interventions to optimise the role of Registered Veterinary Nurses
in UK small animal practice”. The project started in January 2026
and was shaped by the findings from the CVS Veterinary Nurse
Survey which over 1,000 of our nurses completed in 2025.
• We continue to contribute to veterinary literature with
88 peer-reviewed publications published by our colleagues
and our research presented at international conferences.
•
Our funded research into workplace injuries commenced in the year,
and has been one of the most comprehensive programmes of work
undertaken on this topic in the veterinary profession. The research has
resulted in four peer reviewed publications, influenced changes to our
hard hat policy, driven improvements to our animal handling training
and led to the development of a dedicated safety working group.
• We continued to trial AI scribe for clinical and outpatient notes
on desktop and mobile devices, allowing our clinicians to focus
on the care they provide to our clients and their animals.
• We have been trialling two-way client conversations via SMS,
providing real time access to clinical care for our clients.
•
We have launched the Life Stage Assessment framework in practices.
• We have introduced online client booking, making it easier for
clients to access our services.
Outlook
• We are developing a client logged-in state/portal for access
to information and to enhance client engagement.
• We launched our Healthy Pet Club Advanced service offering
on 1 July 2026, which allows clients access to unlimited
consultations, providing extra peace of mind.
• We launched our online digital sign up journey for our Healthy
Pet Club scheme on 4 August 2026, making it even easier for
our clients to access our services.
• We are developing two-way client conversations via MMS and
WhatsApp and introducing online payment journeys.
Our strategy
Driving growth,
delivering care
We recommend and provide
the best clinical care every time
We are a great place to
work and have a career
Link to KPIs
A
B
C
D
E
F
G
H
J
K
Link to risks
1
2
3
4
5
7
8
Read more about our KPIs
on
pages 18 to 21
Read more about our risks
on
pages 56 to 63
Market drivers
This pillar is impacted by:
• a stable pet population;
• advances in veterinary care;
• the humanisation of pets; and
• availability of vets to
perform services.
Link to KPIs
A
B
C
D
E
F
G
H
I
J
K
Link to risks
1
2
3
4
5
6
7
8
Read more about our KPIs
on
pages 18 to 21
Read more about our risks
on
pages 56 to 63
Market drivers
This pillar is impacted by:
• a stable pet population;
• advances in veterinary
care; and
• the humanisation of pets.
CVS Group plc
Annual Report and Financial Statements 2026
16
Our strategic objectives
• To make our Group as environmentally sustainable as possible.
•
To implement the best levels of health and safety in the profession.
• To prioritise the wellbeing of our people.
• To engage with the veterinary profession and support its interests.
Our achievements in the year
• To provide high-quality care, we need to offer colleagues quality
learning, excellent facilities and resources. We continued investment
in projects aimed to improve education and development, share best
practice, give access to top-tier clinical expertise and develop the
leaders in our business.
•
We have published our annual Sustainability Report, providing detailed
updates on the Group’s strategy and the significant progress we have
made towards a more sustainable future. Within this report we have
disclosed financially material sustainability-related data under the
Sustainability Accounting Standards Board (SASB) standards.
• We have introduced smart meters across our practices to help
monitor our energy usage to ensure we remain on track with our
sustainability goals.
• We actively engaged in the CMA market investigation to help
ensure the most balanced outcome for the veterinary profession
also encouraging our colleagues to participate.
• Following the publication of the final decision and conclusion of
the CMA Market Investigation, we have implemented or are in the
process of implementing over 80.0% of the remedies required to
date including now listing prices on our practice websites.
• Our CVO is actively leading on the potential reforms to the
Veterinary Surgeons Act and is providing the Board with key
updates and also supporting our colleagues with clarity on the
reforms by undertaking webinars.
Outlook
• As part of our Clinical Governance Framework, we will focus
on contextualised care, whereby a veterinary surgeon must take
into account the many and varied needs of an animal, their owner
and the veterinary team when advising on a care plan.
• We will continue to monitor the proposed changes to the
Veterinary Surgeons Act and actively engage where we feel
appropriate to do so.
• We remain committed to delivering the remedies following the
conclusion of the CMA’s Market Investigation, of which the final
order has been published by the CMA on 22 September 2026.
Our strategic objectives
• To ensure all our practices meet the RCVS Practice Standards
Scheme accreditation standards, and to aspire to achieve further
RCVS awards.
• To invest in our estate to ensure all our facilities meet
excellent standards.
• To expand our network with high-quality facilities.
• To develop new ways to serve our clients and our patients.
Our achievements in the year
• We acquired 14 veterinary practice sites in 2026, all of which
were in Australia, bringing the total number of practices in
Australia to 57. We continue to focus on ensuring acquired
practices have high-quality facilities which meet the expectations
of a CVS practice for both our colleagues and clients. Where
acquired practice facilities do not meet our usual standard,
we factor in the costs of improving the practice facilities and
equipment to our purchase consideration.
• We also completed four practice relocations and refurbishments
during the year. This included Broadleaf, providing an enhanced
offering of services to pets locally.
• We continue to trial AI features such as AI Scribe, all enhancing
the digital journey for our clients through our continued
investment in our IT infrastructure.
• We continued our focused investment to improve our colleague
and client areas as well as investing in new equipment to further
extend service offerings, with over 200 sites now receiving
investment through our project sparkle initiative.
Outlook
• We continue to focus on investment capex to support operational
resiliency and long-term growth, increasing not only capacity but
also service offerings across our network.
• We will also invest in clinical equipment to launch new services
where appropriate across our practices where both demand and
capacity exists.
• The quality of the acquisitions we acquire also remains a key
component of our growth ambition.
We take our
responsibilities seriously
We provide great facilities
and equipment
Link to KPIs
A
B
C
D
E
F
G
H
J
K
Link to risks
1
2
3
4
7
8
Read more about our KPIs
on
pages 18 to 21
Read more about our risks
on
pages 56 to 63
Market drivers
This pillar is impacted by:
• a stable pet population;
• advances in veterinary care;
• consolidated markets; and
• the availability of vets to
perform services.
Read more about our KPIs
on
pages 18 to 21
Read more about our risks
on
pages 56 to 63
Market drivers
This pillar is impacted by:
• the availability of vets to
perform services; and
• the humanisation of pets.
Link to KPIs
A
B
C
D
E
F
G
H
J
K
Link to risks
1
2
3
4
5
6
7
8
CVS Group plc
Annual Report and Financial Statements 2026
17
Corporate Governance
Strategic Report
Financial Statements
The Directors’ Report
Key performance indicators
2025
2024
2023
2022
2026
673.2
638.7
588.9
554.2
712.8
Why it’s a KPI
Revenue is a key measure of
performance across all divisions
of the Group and demonstrates
our ability to attract and
retain customers.
2026 performance
• Overall revenue has increased
by £39.6m.
•
Like-for-like sales, adjusted
for intercompany revenue
eliminations, increased by
£13.6m (2.1%) as a result of
investments in our people,
facilities and clinical equipment.
• Acquisitions in the year and the
full-year impact of prior-year
acquisitions generated
additional revenue of £26.0m.
Why it’s a KPI
Like-for-like sales shows revenue
generated from like-for-like
operations compared to the
prior year, adjusted for the
number of working days. For
example, for a practice acquired
in September 2024, revenue is
included from September 2025
in the like-for-like calculations.
This shows the organic growth
in revenue across all divisions,
excluding the impact
of acquisitions.
2026 performance
•
Like-for-like revenue growth of
2.1% impacted by softer market
conditions in the UK.
•
Like-for-like performance
across our Veterinary Practices
division of +1.0% was impacted
in the year from a continuation
of softer market conditions in
the UK, a weaker Q4 partly
impacted by the extreme hot
weather with owners opting to
keep their pets at home and the
COVID-19 puppy and kitten
cohort in their healthy young
adult years.
• We continue to see positive
performance in Australia.
• We have experienced good
like-for-like performance
across both our Laboratories
division and Online
Retail Business.
Why it’s a KPI
Adjusted Earnings Before
Interest, Taxation, Depreciation
and Amortisation (EBITDA)
excludes costs relating to
business combinations and
exceptional items and assists in
understanding the performance
of the Group.
2026 performance
• Adjusted EBITDA growth
was impacted during the year
by continued softer trading
conditions due to lower
consumer confidence in the
UK, following the cost of living
crisis, annualisation of the
Employer NIC increase
introduced in April 2025 and
the continued operational
impact of the CMA investigation
during the year.
• Acquisitions in the year and the
full-year impact of prior-year
acquisitions generated
additional EBITDA of £6.7m.
• Adjusted EBITDA includes
£15.7m (2025: £15.1m) of net
Research and Development
Expenditure Tax Credits
offsetting investment in
people and inflation.
• Adjusted EBITDA of £141.5m
was +£6.9m/+5.1% above the
prior year, demonstrating the
Group’s ability to deliver
continued growth.
Measuring what
matters most
Link to
strategy
2025
2024
2023
2022
2026
2.9
7.3
8.0
2.1
2025
2024
2023
2022
2026
134.6
123.0
121.6
107.4
141.5
Adjusted financial
measures are defined and
reconciled to the financial
measures defined by
International Financial
Reporting Standards
(IFRS) in the alternative
performance measures
glossary on pages 176
to 180.
APM
Financial KPIs
0.2
Read more about our strategy on
pages 16 and 17
A: Revenue
(£m)
£712.8m
+5.9%
B: Like-for-like sales
(%)
2.1%
+1.9ppt
C: Adjusted EBITDA
(£m)
1
£141.5m
+5.1%
APM
APM
CVS Group plc
Annual Report and Financial Statements 2026
18
APM
Link to
strategy
D: Adjusted EPS
(pence)
85.6p
+6.9%
Why it’s a KPI
This is profit before tax adjusted
for: amortisation; costs relating
to business combinations; and
exceptional items net of the
notional tax impact of these,
divided by the weighted average
number of shares. This measure
assists understanding of the
earnings of the Group on a per
share basis.
2026 performance
• Adjusted EPS benefitted mainly
from the increase in adjusted
profit before tax, with a small
benefit from the reduced
average number of shares
in issue following the share
buyback programmes
undertaken during the year.
The effective tax rate was
27.4% (2025: 26.9%).
2025
2024
2023
2022
2026
80.1
83.3
98.9
85.8
85.6
E: Total capex
(£m)
£36.4m
+6.4%
Why it’s a KPI
This is the total amount invested
by the Group across capital
expenditure and maintenance.
Capital expenditure is incurred
on refurbishment, relocation of
practice facilities and investment
in new equipment and clinical
facilities. Investing in our practices
and clinical equipment is key to
the achievement of our strategic
goal of providing great facilities
and equipment and our Capital
Markets Day ambition of
investment in practice facilities
and technology to deliver
additional organic growth.
2026 performance
• Total capital expenditure
has increased by £2.2m,
consisting of a £0.3m decrease
in maintenance capital
expenditure (£0.7m increase
on continuing operations),
ensuring we maintain our
current facilities to the required
standard we expect and a £2.5m
increase in investment capital
expenditure; where we continue
to focus on modernisation of
our IT foundations, enhancing
our client journey on our
Animed Direct website and
selective investments across
our property programme
improving environments
and facilities for both our
colleagues and clients.
2025
2024
2023
2022
2026
34.2
43.1
45.7
24.5
36.4
F: Gross margin before
clinical staff costs (%)
78.6%
+0.2ppt
Why it’s a KPI
Gross margin represents revenue
after deducting the cost of drugs,
laboratory fees, cremation fees,
and other goods sold or used by
the business, expressed as a
percentage of total revenue.
Gross margin is a KPI because it
helps us to monitor and measure
our ability to purchase drugs at
the best possible price whilst
ensuring the highest quality.
2026 performance
• The increase in gross margin is
principally due to improvements
in buying synergies.
2025
2024
2023
2022
2026
78.4
77.6
77.7
76.9
78.6
G: Cash generated from
operations (£m)
£102.0m
-10.6%
Why it’s a KPI
Cash generated from operations
shows the cash inflows before:
payments of taxation and
interest; business combinations;
purchases of property, plant and
equipment and intangible assets;
repayment of right-of-use
assets; payments of dividends;
debt issuance costs; increase/
repayment of bank loans; and
proceeds from issue of shares.
Delivery of increased cash
generated from operations
allows us to invest in further
growth opportunities across
our business.
2026 performance
• Cash generated from
operations decreased due
to one-off negative working
capital movements during the
year mainly from timing of
Research and Development
Expenditure Credit (RDEC)
receipts and delivery of
buying synergies which
resulted in a change to
buying relationships.
2025
2024
2023
2022
2026
114.1
95.9
107.9
93.1
102.0
APM
APM
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
19
Key performance indicators
continued
Measuring what matters
beyond financials
Link to
strategy
1. Net Promoter Score (NPS) measures
customer and colleague experience using
the answer to a key question, “How likely
is it that you would recommend CVS?”,
with a 0–10 scale. Responses are
analysed using a weighted calculation
to yield a score between a low of -100
and a high of 100.
Read more about our strategy on
pages 16 and 17
H: Vet vacancy rate
(%)
5.8%
-0.7ppt
Why it’s a KPI
The vet vacancy rate is calculated as the
average number of live vet vacancies divided
by the total number of vets by headcount
plus vacancies. This shows the average level
of vet vacancies for the Group during the year.
This links to our strategic goal of being the
veterinary company people most want to
work for.
2026 performance
• The vet vacancy rate has decreased
in 2026, as we continue to fill our
vacant positions.
2025
2024
2023
2022
2026
6.5
9.3
11.5
10.4
5.8
I: Healthy Pet
Club members
508,000
-2.1%
Why it’s a KPI
Healthy Pet Club is our preventative care
scheme. It provides CVS with a robust and
regular revenue stream, as well as improving
customer loyalty.
2026 performance
• The number of Healthy Pet Club members
has decreased by -2.1% during the year, due
to a continued impact of weaker consumer
confidence and protecting discretionary
spend resulting in weaker footfall.
• However, our revenue from our Healthy Pet
Club scheme continued to grow by +3.5%
from £92.3m in FY25 to £95.5m in FY26.
• Following a successful trial at a number of
sites during FY26, we officially launched
our Healthy Pet Club Advanced (HPCA)
offering on 1 July 2026. The enhanced
service includes unlimited consultations,
providing members with ongoing access
to expert guidance and support.
• During the year, we introduced online
booking and membership registration for
HPC and HPCA members. By simplifying the
booking process and improving accessibility,
we aim to enhance the member experience
and support continued growth in
membership numbers.
2025
2024
2023
2022
2026
519,000
503,000
489,000
470,000
508,000
Non-financial KPIs
CVS Group plc
Annual Report and Financial Statements 2026
20
Link to
strategy
J: Employee
NPS
1
5.8
+2.7ppt
Why it’s a KPI
Employee Net Promoter Score (eNPS) is a
measure of how likely our colleagues are to
recommend the Group as a place to work as
reported on anonymous surveys. Monitoring
eNPS shows the level of colleague satisfaction
across the Group and helps us to ensure we
are a great place to work and have a career.
2026 performance
• During FY26 we continued to see positive
colleague engagement with our eNPS
throughout the year and by June 2026 we
saw eNPS increase to +5.8. This follows
continued investment through our project
sparkle capital investment programme
improving both colleague and client-facing
areas, helping our colleagues feel good
about the environment they work in. We
remain committed to team engagement
and morale across the Group.
2025
2024
2023
2022
2026
3.1
-2.8
14.6
4.8
5.8
K: Client
NPS
1
80.6
+1.7ppt
Why it’s a KPI
Client Net Promoter Score (NPS) is a measure
of the level of our clients’ satisfaction with their
experiences with the Group via anonymous
reporting of the likelihood that clients would
recommend the Group for our services.
Monitoring NPS helps us to ensure we
recommend and provide the best clinical
care every time.
2026 performance
• Client engagement remains a key focus
and we are committed to understanding
our clients’ needs.
• High-quality clinical care and investment in
our practice facilities remains a key focus to
provide a safe and comfortable environment
for our clients and exceptional care of their
treasured animals; our project sparkle
investment programme helped improve
some of our client waiting areas, which is
just one of our key focuses for improving
the customer experience.
• We remain committed to understanding
our customers’ needs and providing them
with a high-quality service.
2025
2024
2023
2022
2026
78.9
68.0
73.0
71.9
80.6
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
21
Chair’s statement
“At the heart of CVS is a clear and
enduring purpose: to provide the
best care for as many animals as
possible, supported by the scale
and strength of our Group.”
David Wilton
Chair
Delivering
outstanding care
Introduction
It has been another busy and eventful year for CVS. Throughout
the year, our colleagues across the UK and Australia have
combined clinical expertise, compassion and dedication to
deliver outstanding care and support to animals and their
owners. This year we have acquired 14 practice sites in Australia,
and I’m delighted to welcome our new colleagues to the Group.
Earlier this calendar year we moved our share listing from the
Alternative Investment Market (AIM) to the Main Market of the
London Stock Exchange and thereafter our shares were
admitted to the FTSE 250 Index.
The protracted UK Competition and Markets Authority (CMA)
market investigation into veterinary services for household pets
in the UK reached a conclusion which we were well positioned
for, with legally binding orders published by the CMA on
22 September 2026, and we have participated in the Department
for Environment, Food and Rural Affairs consultation on proposed
reforms to the Veterinary Surgeons Act 1966. Once again, I thank
all of our colleagues who have been involved, directly or indirectly,
in this process.
We have also enhanced our Board with the appointment of three
new independent Non-Executive Directors with Deborah Kemp
then retiring on 30 June 2026. Richard Fairman also announced
his intention to retire as Chief Executive Officer, but remains fully
committed to leading CVS until a successor takes up the role.
Move to the Main Market
On 24 October 2025, and after 18 years on AIM, we announced
our intention to move our share listing to the Main Market and
this process concluded on 29 January 2026. Shortly thereafter
in March, our shares were included in the FTSE 250. This is
another positive step in the long-term development of CVS and
we anticipate the benefits of the move to include providing
access to deeper pools of capital across a broader range of
investors domestically and internationally, improving trading
liquidity and enhancing the Group’s corporate profile. The decision
to move was not taken lightly and we were aware we would lose
several shareholders who had been supportive over many years
but who were not able to own shares listed on the Main Market.
We are pleased that we made the move and confident we will
benefit, particularly as wider macro-economic and political
factors presently weighing on the market hopefully dissipate.
CVS Group plc
Annual Report and Financial Statements 2026
22
CEO succession planning
On 30 March 2026 we announced that Richard Fairman had
informed us of his intention to retire after almost seven years
as CEO of CVS. Under Richard’s stewardship, CVS has changed
and developed significantly. Richard has overseen consistent
growth and the development of the Group into what it is now.
Notable events under his watch include the successful entry
into the Australian market, navigating a cyber attack in March
2024 and accelerating our cloud roll out, selling the Crematoria
operations for a 10x multiple, moving from AIM to the Main
Market and entering the FTSE 250 Index and, for most of the
last three years, successfully dealing with the CMA market
investigation. I am very grateful for his contribution to CVS
and, when he does retire, he will do so with my best wishes.
The appointment of a successor with the requisite skill set is an
important decision as we look to our next phase of growth. The
comprehensive search led by a leading executive search firm is
well underway and making good progress. The Board remains
focused on ensuring an orderly and seamless leadership transition
and looks forward to updating shareholders in due course.
Ensuring robust governance
We have announced several Board changes over the year and
I am pleased to have welcomed Helen Keays, Jane Bednall and
Laura Hagan to the Board as Non-Executive Directors. We also
announced the retirement of Deborah Kemp as a Non-Executive
Director with effect from 30 June 2026 after more than eight
years on the Board. I would like to thank Deborah for her
contribution over that period. Following Deborah’s retirement
Helen has taken over as Chair of the Remuneration Committee
and Laura is now both the Senior Independent Director and
Employee Engagement Director. The new appointments bring
additional direct operating and governance experience across
high-volume, multi-site retail, digital, and consumer environments.
We continually monitor the composition of the Board to ensure
we have the right balance of skills and experience.
Clear capital allocation priorities
The Board is recommending the payment of a final dividend
of 9.0p per Ordinary share (2025: 8.5p), maintaining our
progressive approach to the dividend.
Section 172 statement
The Section 172 statement is a mandatory disclosure required
by the Companies Act 2006. This statement outlines how the
Directors promote long-term success for shareholders while
considering stakeholder interests, including employees,
suppliers, communities and the environment.
The ex-dividend date is 5 November 2026 and the dividend
payment date is 4 December 2026.
As a further sign of the Board’s confidence in the Group’s
prospects and strong cash generation, during the financial year,
we announced two share buyback programmes: the first, of up
to £20.0m, on 24 October 2025 in conjunction with the move to
the Main Market and the second, of up to £50.0m on 26 May 2026,
which is expected to conclude in November 2026.
Alongside the announcement of the second share buyback we
reaffirmed our approach to capital allocation and we provided a
more detailed update on our capital allocation priorities as well
as more information on past and anticipated returns from our
investments at the investor presentation on 23 July 2026.
We have also undertaken a thorough consultation with many of
our major shareholders regarding our approach to remuneration
and have sought to better align the reward and incentive structure
following the move to the Main Market to shareholder objectives.
Further details of this are set out in the Remuneration Committee
Report on pages 93 to 109.
Shareholder engagement
The Board engages actively and regularly with existing and
potential new shareholders from the UK and overseas through
direct dialogue and attendances at investor conferences. All
Directors are available to speak or meet with investors on
request and I welcome and encourage such contact.
An exciting future
Our strategy for growth coupled with the favourable fundamentals
of the sector sets CVS in a good position to deliver further organic
and inorganic growth and I look forward to reporting on further
success in the future.
I would like to conclude by once again thanking all
CVS colleagues in the UK and Australia for their continued
professionalism and commitment in providing great care for
our clients and their animals and I also thank all our stakeholders
for their ongoing support.
David Wilton
Chair
24 September 2026
What makes us CVS
Growing access
to better care
Coast2Coast Farm Vets has grown from a 7m² base to a
modern 120m² facility, reflecting the ongoing investment
in practices to enhance clinical capability, improve client
experiences and support high-quality care.
Read more about Section 172
considerations on
pages 79 to 82
Read more about Section 172
considerations on
pages 79 to 82
Read more about Section 172
considerations on
pages 79 to 82
Board decision
S172 considerations
Listing on the Main
Market of the London
Stock Exchange
Dividend and share
buyback programme
Appointment of new
Non-Executive Directors
CVS Group plc
Annual Report and Financial Statements 2026
23
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Chief Executive Officer’s review
Providing Care,
Value and Service
in every moment
Introduction
It has been a privilege to lead CVS over the past seven years
as CEO. We are fortunate to have a passionate and dedicated
team of clinical and support colleagues that provide great care
to our clients and their animals; I am proud of their achievements.
I would like to thank all CVS colleagues for their tremendous
support and wish them every success in the future.
The past financial year has seen a further increase in revenues
and earnings despite a challenging economic backdrop in the
UK. Revenue increased by 5.9% to £712.8m, Adjusted EBITDA
increased by 5.1% to £141.5m and Adjusted EPS increased by
6.9% to 85.6p.
We have had to work hard to maintain margins through
efficiency savings and disciplined cost control given the
significant inflationary pressures from increased Employer
National Insurance contributions, further increases in the
national minimum wage/national living wage and higher
IT costs.
Like-for-like revenue growth increased to +2.1% for the year
(2025: +0.2%) but was impacted by a continued weakness
in UK consumer confidence through a combination of higher
personal taxation, the weak UK economic backdrop, the conflict
in Iran and political uncertainty in the UK which ultimately led to
the changes in Prime Minister and Chancellor of the Exchequer.
The extreme hot weather seen in much of the UK in May and
June also impacted revenues in the final quarter and dampened
the more positive like-for-like growth achieved in the first three
quarters of the financial year. More recent trading has returned
to pre-May levels, before the impact of the heatwaves.
“We are continuing our
longstanding focus on providing
great Care, Value and Service to
our clients and their animals.”
Richard Fairman
Chief Executive Officer
CVS Group plc
Annual Report and Financial Statements 2026
24
We expanded our presence in Australia through the acquisition
of a further six practices comprising 14 sites for an initial
consideration of £43.3m. These include Sydney Animal Hospitals,
a seven-practice group which has established an excellent
reputation across Australia and beyond. Since entering Australia
in July 2023, we have grown steadily, and at 30 June 2026 we
owned 35 practices operating across 57 sites. Since the financial
year end we have acquired a further two practices (four sites)
for initial consideration of A$9.3m. We are pleased with the
performance of our Australia practices and have a strong
pipeline of further acquisition opportunities.
The UK Competition and Markets Authority (CMA) has
undertaken a thorough review of the veterinary sector over
the past five years through its initial merger review of certain
acquisitions and subsequent Market Review and Market
Investigation. This has been a significant and challenging process
for CVS and the wider veterinary sector. Hence, it was pleasing
to see the CMA issue its final decision on 24 March 2026 with
remedies largely focused on increased transparency. Whilst we
do not agree with all of the CMA’s proposed remedies, we are
comfortable with them and have made significant progress in
their implementation. Nearly all of our UK companion animal first
opinion and referral practices are now jointly branded, and we
have had prices live on our practice websites since the end of
2025. The CMA has recently publish its final remedies and
funding order and we will fully comply with the remedies, which
are in line with our expectations, in the timetable set out.
Now that we have CMA certainty, we can once again focus
our entire efforts on growing our business whilst continuing our
longstanding focus on providing great Care, Value and Service
to our clients and their animals.
Strategic update
When we formed a new management team back in November
2019, we set out a clear strategy for growth which focused on
people and clinical care. We have seen considerable progress
over the past seven years with CVS successfully repositioned
as an employer of choice in the sector, clinical standards and
capability enhanced and clients providing consistently strong
feedback on the service they receive as evidenced by our
improved client Net Promoter Score.
As noted at our investor presentation in July 2026, we remain
committed to the medium-term targets which we set out in our
Capital Market Day in November 2022, which include like-for-like
revenue growth of between 4.0% to 8.0%, margin enhancement
from 19.0% to 23.0% and operating cash conversion in excess
of 70.0%.
The veterinary services market has seen a number of changes
over the past few years, with a significant increase in pet
ownership in peak COVID-19, a marked improvement in the
availability of vets and nurses, uncertainty through the CMA
process and pressures from the weak UK economic backdrop.
However, the veterinary sector is proven to have a high degree
of resilience through economic cycles and the fundamentals
of the market remain very strong. The humanisation of pets is
a continuing trend with most pets being an integral part of the
family and owners willing to spend on veterinary care to keep
them as fit and healthy for as long as possible. The pet populations
in both the UK and Australia have fallen since peak COVID-19
but remain higher than they were prior to the pandemic and are
now stable. Pet life expectancy has also increased and hence
the pets under our care will require our clinical services
for longer. Through advances in clinical care and our own
investment in people, facilities and clinical equipment, we
can now provide better care for animals than ever before.
We have taken a number of important steps to position CVS
well to benefit from these strong market fundamentals, whilst
delivering further growth and benefits for all our stakeholders.
In the past financial year, we invested £36.4m in capital
expenditure to maintain and improve our technology, facilities
and clinical equipment and, as noted above, we have invested
£43.3m in further accretive acquisitions. We have also invested
£5.1m in jointly branding our UK practices with “CVS Vets”
prominently alongside the local practice name.
This investment positions us well for the future as we focus on
further enhancing our customer service. To support the delivery
of this and the client strategy we will be looking to appoint a
Chief Client Officer to the Executive Committee. In addition to
online booking introduced previously, we have opened practice
diaries for over a year and are encouraging receptionists to
ensure clients have their next appointment booked before they
leave the practice. Our new joint branding facilitates our ability
to undertake more central marketing and CRM activity, and we
are investing in enhanced capability in this area so that we can
drive improved footfall.
Sustainability
Our latest Sustainability Report, which is being published
alongside this Annual Report, sets out the further progress we
have made in the past financial year under our four ESG pillars:
Care for our Planet, Care for our People, Care for our Clients
and their Animals, and Care for our Communities. I continue to
sponsor our sustainability and ESG focus and provide a report
to the Board at each scheduled meeting.
Shareholder engagement
We have undertaken considerable shareholder engagement
over the past financial year through a combination of individual
meetings with major shareholders, attendance at major
conferences, results roadshows in the UK, the US, Canada,
Nordics and Europe and fireside chats with analysts.
It was pleasing to receive positive feedback from analysts and
shareholders alike following our investor presentation in July.
Capital allocation
We have maintained a disciplined approach to capital allocation
over the past few years, and whilst this approach hasn’t changed,
we reiterated our capital allocation priorities in our investment
presentation on 23 July 2026 and provided an update on the
returns we are seeing from our prior acquisitions and investments.
Our capital allocation framework is based on a hierarchy of
clear priorities under which each investment opportunity is
assessed against other capital deployment opportunities and
the options considered most value accretive over the longer
term are selected.
Maintaining a healthy and efficient balance sheet is a key focus,
and we successfully refinanced in May 2026 securing
committed facilities through to May 2030 with a further one-year
extension at our discretion whilst also securing a reduction in
margin alongside increased flexibility. Operating cash
conversion for the financial year was maintained above 70%,
and we finished the financial year with leverage of 1.63 times.
We have headroom in committed undrawn bank facilities and
financial covenants.
We recognise differing shareholder appetites for leverage but
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Chief Executive Officer’s review
continued
Capital allocation
Healthy balance sheet and strong cash generation with continued
opportunity to deploy capital to generate long-term shareholder returns
Capital and cash generation
Uses of capital
subject to balance sheet guardrail of <2.0x leverage (June 2026: 1.63x)
Healthy balance sheet and strong cash generation
1
£350m
successful refinancing
with committed facilities
to May 2030/31
£141.5m
FY26 Adjusted EBITDA
>70%
operating cash
conversion
Incl. essential maintenance
capex c.£12m–£15m,
and rent lease payments
Ordinary dividends
2
Progressive policy
providing consistent, predictable returns to shareholders,
c.£6.0m
c.£70m
free cash flow
After tax and interest, of
which c.£10m is needed
for contingent consideration
Capital directed to whichever option generates the highest-risk-adjusted returns over the longer term…
3
Acquisitions
Attractive pipeline of acquisitions
in Australia and the UK to accelerate sustainable growth,
c.£50m pa
(If larger attractive acquisitions present themselves, the Board will consider temporarily increasing leverage to >2.0x)
Investment capex
Investment to maximise organic growth
, focused on delivering increased revenue
and enhanced margins,
c.£30m pa (inclusive of maintenance)
Shareholder returns
Any capital deemed surplus to the key priorities above, or depending on the returns
assessment over the longer term, may be
returned to shareholders
CVS Group plc
Annual Report and Financial Statements 2026
26
remain committed to maintaining leverage at no more than 2.0x
net debt to bank test EBITDA. If additional attractive acquisition
opportunities arise, we will consider temporarily increasing
leverage above two times, provided there is a clear runway
to return to below two times leverage.
We have an attractive pipeline of accretive, bolt-on acquisition
opportunities and whilst our focus in the past three years has been
on Australia, we are confident that we can return to accretive UK
acquisitions now that the CMA Market Investigation has concluded.
We expect to deploy c.£50.0m per annum in acquisitions, subject
to timing and availability of opportunities that meet the Group’s
criteria. Since the year end we have completed two further
acquisitions of four practice sites, alongside exchanging contracts
on a three site practice in South Australia, a single site practice in
Western Australia and a two site practice in the UK.
We have a disciplined approach to capital investment aimed at
delivering accretive returns significantly in excess of the Company’s
cost of capital. This investment is focused on delivering increased
revenue and enhanced margins through improved clinical facilities
and equipment, greater client experience and loyalty through new
technology and improved employee engagement and retention.
We expect to invest no more than £30.0m per annum in capital
expenditure
including essential maintenance spend of c.£12.0m. All
investments will
continue to be assessed against our criteria and other
uses of capital.
Ordinary dividends are an important component of shareholder
returns, and we will maintain our progressive dividend policy. We are
recommending the payment of a final dividend of 9.0p, which will be
paid in December subject to shareholder approval at our AGM.
Any capital deemed surplus to our requirements may be returned
to shareholders, including situations where a return to shareholders
is the most accretive of the three options. We announced a £20.0m
share buyback programme in October 2025 in support of our step
up to the Main Market and a further £50.0m share buyback
programme in May 2026.
We will continue to maintain our disciplined approach and
we recognise the returns we can achieve through these capital
allocation opportunities are linked to our prevailing share price.
Outlook
Through the investments we have made in the past few years,
and the solid growth achieved across all three divisions, CVS
is well placed to benefit from the strong market fundamentals.
We have capital to deploy in further accretive acquisitions, and we
will continue our disciplined approach to capital investment in
support of revenue growth and margin enhancement.
Whilst the macro-economic backdrop remains challenging,
we are confident in our ability to drive increased returns for all
stakeholders and will continue to focus on providing great Care,
Value and Service to our clients and their animals.
CVS is a people business, and our past and future success is due
to their commitment and dedication. I remain committed to leading
CVS until my successor is in role and I am honoured to have had
the opportunity to be CEO at CVS. I look forward to seeing the
Company continue to deliver further success in the future.
Richard Fairman
Chief Executive Officer
24 September 2026
AI to support
better care
Artificial intelligence (AI) is transforming healthcare
delivery, improving diagnostics, workflow optimisation
and clinical documentation. For CVS, these technologies
offer opportunities to enhance clinical care, improve
colleague wellbeing and reduce administrative burden.
In 2025, CVS piloted AI-assisted scribing to support
veterinary consultations by capturing accurate,
structured notes in real time, enabling clinicians to
spend more time with patients and clients. The pilot
involved specialist clinicians in five referral hospitals
testing two AI scribe platforms over three months.
Positive feedback from clinicians has supported the
expansion into 77 first-opinion practices across the
UK. Comprehensive training was provided, covering
responsible AI use, consent, and patient safety,
reinforcing the importance of a safe, well-supported
approach to AI implementation.
What makes us CVS
“The pilot has given us the insight
and the confidence to continue
exploring AI responsibly, always
with patient care, colleague
wellbeing and client experience
at the centre of the journey.”
Graham Dodds
Director of Innovation, Transformation
and Client Experience
CVS Group plc
Annual Report and Financial Statements 2026
27
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Our people and culture
A key priority has been strengthening leadership capability
through the introduction of ICARE, our leadership behaviours
framework, and the launch of training programmes such as
Inspire for Regional Directors, alongside the expansion of our
LEAD programme in the UK, to support leadership development
at all levels. We are currently developing these programmes for
roll out in Australia.
We have also invested in digital enablement, introducing a new
employee relations self-service portal that gives managers easy
access to the tools and guidance they need.
Supporting career development has remained central to
our people strategy. Through a stronger focus on Personal
Development Plans, clearer career pathways, internal
promotions and international secondments, we are creating
more opportunities for colleagues to develop and progress
their careers across CVS.
Q: What is the current level of UK colleague
engagement at CVS?
I’m extremely proud to work alongside the dedicated,
compassionate and supportive colleagues we have at CVS
and ensuring all our colleagues feel valued and as engaged
as possible is paramount. There is no doubt this past year has
continued to be challenging for our colleagues and the profession
as a whole as the CMA investigation reached its pinnacle and
with this backdrop I am delighted we were able to exceed
our eNPS target of +5.0 to +5.8. Alongside this our eNPS in
Australia has seen continued growth year on year, which
reflects the hard work and support provided to integrate new
practices alongside the continued high levels of local and
central management support for colleagues across our
existing practices.
Q: How does leadership support
colleague engagement?
An individual’s relationship with their line manager is the single
most impactful element determining if they are happy, and
therefore engaged, at work. How someone is treated by their
line manager allows them to feel valued, included, developed
and empowered at work; they feel cared for and cared about.
Our check-in framework continues to provide support for
regular, constructive honest conversations which include
a check-in on a colleague’s wellbeing, discussions about
performance and planning for their development. Most recent
feedback indicates 85.7% of colleagues are having a regular
check-in. Supporting colleague development also remains very
important to us, and to facilitate development and progression
discussions we launched a Personal Development Plan (PDP)
framework earlier this year which acts as a prompt for
colleagues and their line managers, as well as providing
a framework to successfully plan and track ongoing activities
in a colleague’s development journey.
Our people strategy is focused on building a culture
where colleagues feel supported, empowered and
able to develop their careers. This Q&A highlights
some of the key priorities, achievements and areas
of focus from the past year.
Our people, delivering
our purpose
Q
A
&
with our Chief People Officer, Helen Finney
Q: What have been the key priorities in
the people strategy this year?
This year, we have focused on creating an environment
where our people and leaders can succeed and grow.
CVS Group plc
Annual Report and Financial Statements 2026
28
Q: What does it feel like to be
a colleague at CVS?
We actually went out and asked our colleagues this very
question earlier in the year so I can answer this with certainty!
Whilst this will of course vary for each colleague, and the stage
they are at in their career, we are very confident that the
overarching experience for our colleagues can be summarised
under these four headings:
Clinical quality
– we aim to provide the best possible care
to animals, guided by our commitment to excellent clinical
practice. We cultivate a culture where clinicians are given the
autonomy to make the best decisions for patients, where
improvement is encouraged at a local level and where best
practice is shared across the Group.
Support
– people are supported with every clinical and
non-clinical challenge. Our clinicians are never alone when
dealing with a case. We provide helpful support to all areas
of our Group and we prioritise the wellbeing of our people.
Learning
– we provide industry-leading learning, education and
development, providing on-the-job training as well as access to
a network of experienced clinicians to support our colleagues in
providing the best possible care.
Progression
– we offer a wider range of career opportunities
thanks to the breadth of our Group. We support colleagues to
progress within their current role, move into new roles, or even
explore entirely different career pathways.
Q: Tell us about something you are proud
of from this year?
There are many things to be proud of from the last year but
if I had to pick one, it would be our work on gender equality
and our gender pay gap.
Within CVS, like the rest of the veterinary sector, there is a
significant skew towards female employment (overall 86%
of our UK colleagues are female) particularly in our lower paid
roles, and this is the primary reason why we have a gender pay
gap, despite aiming to pay the same amount for people with the
same skills and experience, regardless of their gender. That
said, we continue to work hard to reduce this gap, by ensuring
gender balance both amongst our senior roles and within our
more junior roles. For this year’s report, the Group’s UK median
gender pay gap remained stable at 37.9%, but a marked
reduction compared to 43.8% in 2022.
We have just started to report this data for our Australia
practices too, and in both locations our gender pay action
planning in order to continue reducing the gender pay gap
will remain a key focus.
Communicating
with care
Good communication is at the heart of exceptional care.
Over the past year, we have embedded our Confidence
in Consulting programme, helping colleagues develop
the skills and confidence to build stronger partnerships
with clients and improve consultation quality.
Through coaching, observation and structured feedback,
vets have been supported to develop their own authentic
consulting style while focusing on what matters most to
clients. This has encouraged more open and effective
conversations, helping clients feel heard, informed and
involved in decisions about their pets’ care.
The result has been more client-focused consultations,
stronger relationships and greater confidence in the
care we provide.
What makes us CVS
“Confidence in Consulting has
helped me slow down conversations,
really listen to clients, and involve
them more in decisions. That’s
made a huge difference to both
my confidence and the quality
of care I’m able to provide.”
Ana Arcanjo
Clinical Director
Werrington Vets, Peterborough
“Our people make our purpose
possible, supported to deliver
the best care every day.”
Helen Finney
Chief People Officer
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
29
Our people and culture
continued
We also introduced interview selection frameworks for core
roles, initially within companion animal practices, aligned to our
ICARE leadership attributes. These frameworks support a more
objective, behavioural-based approach to assessment, giving
leaders the tools to identify candidates who demonstrate both
the right values and the technical skills required to succeed
at CVS.
Onboarding
It is vital that all new starters receive a consistent induction
into CVS, with a balance of emphasis between their local team
and the wider CVS network, so our new colleagues feel part
of both. This year we piloted a new onboarding programme,
commencing with offer stage, supporting both the new starters
and also their line managers with documentation, guidance,
structure and support through the first three months. The pilot
culminated in a “Welcome to CVS” event, chaired by members
of the Executive Committee, to learn more about the wider
network, ways of working together and benefits available.
Feedback showed 90% of respondents expressed high overall
satisfaction with this session, and this new onboarding
approach will be rolled out across the business.
Our people and culture
Supporting and developing our leaders
Effective leadership plays a vital role in colleague engagement,
performance and wellbeing. During the year, we continued to
invest in programmes and tools designed to develop leaders
and support high-performing teams.
LEAD programme:
Our LEAD programme is designed to play a key role in
developing leadership capability at practice level. During the
year, the first full cohort completed the programme, equipping
leaders with the skills and behaviours needed to lead effectively.
Through structured sessions, LEAD promotes coaching-based
leadership and builds confidence in communication and team
management. Aligned with ICARE and Inspire, it helps ensure
a consistent leadership approach across CVS.
MiHR Pawtal:
During the year, CVS launched the MiHR Pawtal, a self-service
platform supporting line managers with day-to-day people
management. Accessible 24/7 through our Connections intranet, it
provides guidance, documentation and tools across key HR areas,
improving access to resources, consistency and efficiency.
Improvements to recruitment and onboarding
Recruitment
Recruitment and talent acquisition remained a key focus
this year, with the transformation and standardisation of our
recruitment process creating a more consistent, efficient and
engaging experience for candidates and hiring managers.
Centralised candidate screening has strengthened quality,
fairness and consistency throughout the hiring journey.
“Everyone feels supported,
respected and able to bring
their best to the care we provide
every day.”
Sam Blackman
Regional Director
What makes us CVS
Recognising
our teams
Our practices continue to celebrate colleague
excellence across CVS through local recognition
initiatives and Thank You Month, during which nearly
2,000 colleagues shared messages of appreciation
for other colleagues, reinforcing our culture of
recognition and support.
Supporting
leaders to thrive
CVS launched the Inspire leadership framework this
year, an 18-month senior leadership programme that
combines in-person training, self-directed learning,
mentoring and project work. Through self-assessment,
360-degree feedback and applied learning, Inspire is
designed to strengthen leadership capability, improve
team performance and support succession planning
across the Group.
What makes us CVS
CVS Group plc
Annual Report and Financial Statements 2026
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Wellbeing is prioritised
CVS continues to strengthen wellbeing and EDI support
through resources, training and awareness initiatives. During
2025–26, our work has focused on a more integrated approach,
bringing wellbeing and inclusion activity together under a unified
strategy. A structured annual calendar of wellbeing and EDI
activity has been delivered, supported by targeted communications
and resource sharing. Additional training and support tools have
been embedded for leaders, including guidance on inclusive
behaviours and colleague wellbeing. CVS also uses external
benchmarking tools, with results highlighting strong performance
in areas such as wellbeing, belonging and employee engagement.
Australia Employee Assistance Programme
During the year, CVS introduced a new in-country Employee
Assistance Programme (EAP) in Australia, enhancing support
for colleagues. This provides access to locally tailored services,
ensuring support is relevant to their needs. The programme
offers confidential support across areas including mental health,
financial wellbeing and personal challenges. By transitioning to
a local provider, we aim to improve accessibility, relevance and
overall colleague experience, supporting consistent wellbeing
standards across our international operations.
Secondment programme
CVS continues to support a UK–Australia secondment programme,
offering colleagues opportunities to gain international experience
and support career progression. During the year, UK colleagues
undertook placements in our Australian business, strengthening
collaboration. These secondments enable knowledge transfer,
broaden clinical and leadership experience, and support
development of future leaders. In some cases, placements have
supported progression into senior roles, demonstrating our
programme’s value as a structured development pathway.
Growth and continuous development are
supported and encouraged
Investment in our new training centre
In March 2026, we expanded our clinical development offering
with the opening of a new purpose-built training centre in
Bristol. The facility delivers hands-on CPD for vets and nurses
across the South West, Wales and the Midlands. Offering a full
programme of practical and theory-based courses, the centre
improves access to high-quality training closer to home,
supporting ongoing professional development and strengthening
clinical capability across our organisation.
Practical General Practice programme
CVS’ Practical General Practice programme supports vets
in the early stages of their careers, providing a structured
pathway that combines leadership development with flexible
clinical training across a range of disciplines. The programme
enables participants to pursue areas of interest while
developing broad general practice skills, supporting
career progression and confidence.
Embedding
our culture
Strong alignment between culture, purpose, values
and strategy is crucial. It ensures that our colleagues
and stakeholders have a shared understanding of
our direction and can see how their individual roles
contribute to CVS’s broader goals.
Endorsed by the Board, our culture is demonstrated
through our ICARE leadership behaviours.
To support the development of our leaders, we
introduced the ICARE leadership behaviours: Inclusivity,
Collaboration, Accountability, Role Model and Empathy.
This behaviour tool aims to assist leaders, and their line
managers, with self reflection on their leadership style
in order to support development. ICARE will slowly be
incorporated across a range of collateral and materials,
including with the roles and responsibilities for all roles
and leadership training.
During the year we have developed further ways of
ensuring the culture is embedded throughout CVS, with
86% of colleagues having regular check-ins with their
line manager. Following stakeholder feedback, we have
developed a new onboarding process, recognising the
vital importance of embedding CVS’s culture and values
from day one.
What makes us CVS
Outcomes of embedding our culture
• Improved employee satisfaction with employee
net promoter score improving to +5.8 (2025: +3.1)
• Developing and retaining talent, with a reduction
in vet vacancy rate to 5.8%
• Improved inclusivity, with 79.8% of colleagues
reported feeling equally included at work
Improved employee
satisfaction
+5.8%
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Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Sustainable care
for the future
Sustainability
Our approach to environmental, social and governance (ESG)
is brought together through the CVS Care Plan, which reflects
our commitment to caring for animals, people, the environment
and the communities we serve.
*
Based on UK operations only.
Read more about CVS within our 2026
Sustainability Report at
www.cvsukltd.
co.uk/about-us/sustainability
Care for
our Planet
Focused on energy,
carbon and waste, this
pillar underpins our
ambition to minimise
environmental impact
while continuing to
develop our services
and clinical expertise.
-4.4%
reduction in energy
consumption*
-16.9%
reduction in carbon
emissions*
Care for
our People
Centred on people
development, wellbeing
and Equity, Diversity
and Inclusion, this pillar
supports an environment
where our colleagues
can grow and thrive.
+5.8
employee Net Promoter
Score (eNPS)
85.7%
of colleagues having
regular check-ins
Care for our
Clients and
their Animals
Driving a more client-
centric organisation, this
pillar strengthens how we
build lasting relationships
and trust with our clients.
80.6
client Net Promoter
Score (cNPS)*
424
receptionists having
completed client
care training*
Care for our
Communities
Through our interaction
with the profession,
society and local
communities, this
pillar reflects our role
in supporting public
health through our One
Health workstream.
1,687
weeks of student
intra-mural study
placements*
1.5%
consultations in which
HPCIA were prescribed*
CVS Group plc
Annual Report and Financial Statements 2026
32
C
o
m
m
u
n
i
t
i
e
s
C
l
i
e
n
t
s
a
n
d
t
h
e
i
r
A
n
i
m
a
l
s
C
a
r
e
f
o
r
o
u
r
C
a
r
e
Identifying what matters
most for better care
ESG topic assessment
Approach
Every three years, CVS undertakes a review of its ESG priorities
to ensure our sustainability strategy remains focused on the
issues most relevant to our business, stakeholders and the
wider communities we serve. This review is supplemented
by annual monitoring of emerging ESG topics, industry trends
and stakeholder expectations.
Our 2026 assessment considered the ESG topics from two
perspectives: impact on colleagues, clients, animals and the
environment, and their relevance to business operations and
financial performance. This helps us identify the issues most
important to CVS and informs the ongoing development of
our sustainability strategy.
Process
In 2026, we conducted a Group-wide review of ESG priorities.
Participation was open to the Senior Leadership Group and
ESG pillar groups, with approximately 70% taking part.
Participants assessed a range of ESG topics using their
experience, knowledge and professional judgement.
Topics reflected both areas already recognised as important
to CVS and issues identified through peer benchmarking and
developments across the ESG landscape. Aligned to our four
ESG pillars, the topics covered a broad range of environmental,
social and governance considerations. Responses were combined
to identify the ESG topics considered most important to CVS.
Results and next steps
The assessment highlighted a strong alignment across
participants on the topics considered most important to CVS.
Priorities relating to animal care, clinical quality and client
services consistently ranked among the highest-rated topics
when considering both stakeholder impact and business
importance. This reinforces the close connection between
delivering excellent clinical outcomes, supporting pet owners
and creating long-term value for the Group.
The assessment also reaffirmed the importance of colleague
wellbeing, responsible governance and environmental
stewardship, while providing valuable insight into emerging
areas of focus across the business.
The findings will be used by our ESG pillar leaders to refine
priorities and develop focused work plans for the coming
years. By aligning ESG initiatives to topics identified through
the assessment, we can ensure our efforts remain focused
on areas where CVS can deliver the greatest positive impact
while supporting the long-term success of the business.
C
a
r
e
f
o
r
o
u
r
C
a
r
e
f
o
r
o
u
r
P
e
o
p
l
e
P
l
a
n
e
t
Strategically
significant
topics
Highest-priority topics
Carbon emissions
Waste management
Energy use
Highest-priority topics
Colleague wellbeing
Employee recruitment and retention
Colleague development
and engagement
Highest-priority topics
Antimicrobial stewardship
Business ethics and governance
Business integrity and competition compliance
Highest-priority topics
Animal care and welfare
Customer service
Combating diseases
f
o
r
o
u
r
CVS Group plc
Annual Report and Financial Statements 2026
33
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Sustainability dashboard
Unless otherwise stated, all data presented in the table below relates to the Group’s UK operations. Where Group-level data,
including UK and Australian operations, has been provided, this is clearly identified.
Care for our Planet
Sustainable Development Goals
Topic
Description of ambition
Ambition
Progress
Measure
Ambition met
2027 ambition
Energy
reduction
Annual percentage
reduction in energy
consumption (Scopes 1
and 2).
2026
-5.0%
-4.4%
(UK only,
like-for-like)
33,423,697 kWh (UK only)
34,727,598 kWh
(UK and Australia)
2
-5.0%
2025
(restated)
1
-5.0%
-10.8%
34,949,730 kWh (UK only)
Carbon
reduction
Annual percentage
reduction in carbon
emissions (Scopes 1
and 2).
2026
-3.0%
-16.9%
(UK only,
like-for-like)
7,968 tCO
2
e (UK only)
8,956 tCO
2
e
(UK and Australia)
2
-3.0%
2025
(restated)
1
-3.0%
-12.5%
9,586 tCO
2
e (UK only)
Non-medical
waste recycled
Annual increase
in the percentage
of non-medical
waste recycled
(recycled/total waste).
2026
41.0%
45.5%
524.3/1,152.9 tonnes
48.0%
2025
(restated)
3
38.0%
40.9%
451.8/1,103.8 tonnes
Care for our People
Sustainable Development Goals
Topic
Description of ambition
Ambition
Progress
Measure
Ambition met
2027 ambition
Employee
Net Promoter
Score (eNPS)
4
Increase eNPS.
2026
+5.0
+5.8
+5.8 (UK and Australia)
+7.0
2025
+5.0
+3.1
+3.1 (UK and Australia)
Colleagues
having regular
check-ins
Increase in percentage
of colleagues having
regular check-ins.
2026
80.0%
85.7%
85.7%
>85.0%
2025
85.0%
84.4%
84.4%
Care for our Clients and their Animals
Sustainable Development Goals
Topic
Description of ambition
Ambition
Progress
Measure
Ambition met
2027 ambition
Client Net
Promoter Score
(cNPS)
5
Increase cNPS.
2026
+80.0
+80.6
+80.6
>+80.0
2025
Increase
by 5.0%
Increase of
16.0%
+78.9
Client care
training
Increase the number
of receptionists
having completed
client care training.
2026
270
424
424 receptionists
We expect all of our receptionists
to complete a form of client care
training; therefore, this is no longer
considered a relevant target.
New target: Percentage of
practices with a Confidence in
Consulting coach to exceed 50.0%
2025
N/A
N/A
240 receptionists
Care for our Communities
Sustainable Development Goals
Topic
Description of ambition
Ambition
Progress
Measure
Ambition met
2027 ambition
Deliver more
than 1,000
weeks of vet
student intra-
mural study
placements
Deliver a minimum
number of vet student
intra-mural study
placement weeks.
2026
>1,000
1,687
1,687 weeks
>1,000
2025
N/A
N/A
1,094 weeks
Antimicrobial
stewardship
HPCIA usage
6
Percentage of companion
animal consultations
resulting in a Highest
Priority Critically
Important Antimicrobial
(HPCIA) prescription
should not exceed the
established benchmark.
2026
<2.0%
1.5%
1.5%
<2.0%
2025
(restated)
7
<2.0%
1.5%
1.5%
1.
Energy and carbon 2025 metrics have been restated to align with the
reporting methodology applied in 2026.
2.
2026 energy consumption and carbon emissions include both UK and
Australian operations, whereas 2025 emissions included UK operations only.
Comparative 2025 figures have not been restated to include Australian
operations due to insufficient historical data. Performance against 2026 targets
has therefore been assessed on a like-for-like basis excluding Australian
operations. From 2027 onwards, progress against targets will be measured
on a Group-wide basis, encompassing both UK and Australian operations.
3.
The percentage of non-medical waste recycled in 2025 has been restated
to reflect newly available data.
4.
Employee Net Promoter Score is a measure of how likely our colleagues are
to recommend the Group as a place to work as reported on anonymous
monthly surveys.
5.
Client Net Promoter Score is a measure of the level of our clients’
satisfaction with their experiences with the Group via anonymous reporting
of the likelihood that clients would recommend the Group for our services.
6.
Antimicrobial stewardship HPCIA usage refers to the monitoring and
management of Highest Priority Critically Important Antimicrobials (HPCIAs),
which are essential antibiotics reserved for treating serious infections.
Stewardship efforts aim to ensure these medicines are used responsibly to
preserve their effectiveness and reduce the risk of antimicrobial resistance.
7.
Antimicrobial stewardship HPCIA usage for 2025 has been restated to reflect
improved calculation methodology, providing a more accurate representation
of usage.
Sustainability
continued
CVS Group plc
Annual Report and Financial Statements 2026
34
Sustainability
statement
Delivering on our purpose, to care for as many animals as
possible, requires us to manage our environmental impact
responsibly. Climate-related risks and opportunities are
embedded in our planning, and by minimising our impact
on the planet, we support the continued development of
our clinical services.
We continue to align our climate-related disclosures with the
recommendations from the Task Force on Climate-Related Financial
Disclosures (TCFD), supporting our approach to identifying,
assessing and managing climate-related risks and opportunities.
During the year, we have further developed our climate-related
scenario analysis, building on prior work to enhance our
assessment of potential climate pathways and their implications
for the Group, including the resilience of our strategy under
different scenarios.
Our disclosures are structured in line with the four TCFD pillars
of Governance, Strategy, Risk Management, and Metrics and
Targets, including:
• scenario analysis across a range of climate pathways;
• target setting to reduce the environmental impact of our
operations; and
• ongoing enhancements to our processes for monitoring
performance and managing climate-related risks.
The table below provides a cross-reference between the TCFD
recommended disclosures, the requirements of UKLR 6.6.6R (8),
and the relevant sections within the following pages of this report
where these matters are addressed.
The Group has also included climate-related financial disclosures
in accordance with Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022 (SI 2022/3
).
TCFD recommendations and recommended disclosures
Compliance
Disclosure location
Governance
Board’s oversight of climate-related risks and opportunities
Yes
Page 36
Management’s role in assessing and managing climate-related risks and opportunities
Yes
Page 36
Strategy
Climate-related risks and opportunities (short, medium and long term)
Yes
Page 38
Impact of climate-related risks and opportunities on the business, strategy and
financial planning
Partial compliance – see
compliance statement below
Pages 38 to 40
Resilience of the organisation’s strategy, considering different climate-related scenarios,
including a 2°C or lower scenario
Yes
Pages 38 to 40
Risk Management
Processes for identifying and assessing climate-related risks
Yes
Page 41
Processes for managing climate-related risks
Yes
Page 41
Identifying, assessing and managing climate-related risks and integration into overall
risk management
Yes
Page 41
Metrics and Targets
Metrics to assess climate-related risks and opportunities in line with the strategy and risk
management process
Yes
Page 41
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and the
related risks
Partial compliance – see
compliance statement below
Page 41
Targets used to manage climate-related risks and opportunities, and performance against targets
Yes
Page 42
Non-financial and sustainability information statement
TCFD compliance statement
The Group has assessed its climate-related disclosures against
the TCFD Recommendations and Recommended Disclosures and
considers itself substantially compliant with the framework. The areas
identified as partially compliant relate to the ongoing development of
climate-related financial quantification and the expansion of Scope 3
emissions reporting. Details of these areas and the actions being
taken to enhance compliance are set out below.
Strategy – Quantification of climate-related risks
and opportunities
Climate-related risks and opportunities have been assessed
qualitatively; however, their potential financial impact has not
yet been quantified. The Group is developing an appropriate
quantification methodology and aims to include quantified
disclosures in its reporting for the year ending 30 June 2027.
Metrics – Scope 3 emissions disclosures
The Group does not currently report Scope 3 emissions.
During the year, the Group continued to develop its
understanding of emissions arising across its value chain
and expanded its assessment of relevant Scope 3 emissions
categories. While progress has been made in measuring these
emissions, further work is required to validate the underlying
data and methodologies before disclosures can be made with
an appropriate level of confidence. The Group intends to
continue this work during FY27, with the aim of achieving
full Scope 3 reporting compliance by 30 June 2027.
CVS Group plc
Annual Report and Financial Statements 2026
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Non-financial and sustainability information statement
continued
TCFD compliance statement
continued
Metrics – Scope 3 emissions disclosures continued
Disclosure requirement
Our progress
Governance
Describe the
Board’s oversight
of climate-related
risks and
opportunities
The CVS Group Board is responsible for overseeing the Company’s approach to climate-related risks and opportunities,
integrating them into strategic decision making, risk management, budgeting and major capital expenditures. The Group’s
Board is diverse in its composition which enables wide-ranging perspectives and experience in identifying and addressing
climate-related risks and opportunities. The expertise of the Group’s Board is detailed in the biographies of the Board members
on pages 70 and 71 of this Annual Report.
The Board reviews climate-related issues at each Board meeting, ensuring consistent integration into the Group’s strategic and
financial planning processes. During 2026, there were eight scheduled Board meetings. Further efforts are underway to embed
climate risks more comprehensively into detailed budgeting processes.
The Board oversees the setting of climate-related targets and the monitoring of progress against these targets, facilitated
through the Sustainability Committee. The objective of the Sustainability Committee is to oversee, support and guide the
Company’s sustainability initiatives. Its primary function is to ensure integration of environmental, social and governance (ESG)
principles into the Company’s strategy, operations and culture. Executive Directors of the Board participate in an annual bonus
scheme: 20% of the bonus is payable based on non-financial targets linked to key metrics and the Group’s sustainability strategy.
Linking remuneration to sustainability performance demonstrates the Group’s commitment to sustainable targets and initiatives.
Progress against sustainability targets is reviewed annually and presented to the Chief Executive Officer for discussion. Where
targets are not expected to be met, the Sustainability Committee explores potential causes and considers appropriate remedial
actions. Actions are agreed collaboratively and followed up through regular Committee engagement.
The assessment of climate-related risks is governed through the same processes used for financial risk management,
ensuring consistency in how these risks are identified, assessed, monitored and disclosed. Detailed information on our broader
risk management process is available on pages 56 to 63 of this Annual Report.
The Group and the Board remain committed to high-quality and transparent climate reporting, including this TCFD disclosure.
Further detail on our sustainability framework, activities and performance, including reporting against SASB standards, is
provided in the Group’s 2026 Sustainability Report.
Our sustainability strategy is structured around the CVS Care Plan, which focuses on four key pillars that reflect our
commitment to responsible business practices and long-term value creation:
• Care for our Planet retains a focus on energy and carbon as well as waste.
• Care for our People retains a focus on people development, wellbeing and EDI.
• Care for our Clients and their Animals reflects how we become a more client-centric organisation, and build long-lasting
relationships and trust with clients.
•
Care for our Communities is how we interact with our professions, society and the local communities in which we operate
and uphold public health through our One Health workstream.
Describe
management’s
role in assessing/
managing
climate-related
risks and
opportunities
The Chief Executive Officer (CEO) holds overall responsibility for sustainability within the Group and serves as the Chair of the
Sustainability Committee. This dual role ensures direct accountability and oversight. The CEO leads the development and execution
of the Group’s climate strategy, collaborating with various departments to integrate climate considerations into operational practices.
This governance structure facilitates clear, two-way communication between the Board and the wider business, ensuring that
climate-related risks and opportunities are effectively managed at the highest level.
The Sustainability Committee is composed of senior leaders with expertise aligned to the Group’s four ESG pillars: Care for our
Planet, Care for our People, Care for our Clients and their Animals, and Care for our Communities. These leaders are responsible
for implementing the Board’s directives on climate-related issues, ensuring that climate strategies are effectively implemented
across the organisation.
Climate-related risks and opportunities are identified, assessed and managed through a structured risk management framework.
This process includes risk identification by relevant pillar leads, assessment of risk severity and the application of mitigation controls.
During the year, we enhanced our approach through the development of a dedicated climate and ESG risk register. This register
forms a standing agenda item at Sustainability Committee meetings, ensuring ongoing monitoring and challenge. High-priority
risks are escalated directly to the Board for review, with corrective actions being implemented where necessary.
During the year, the Sustainability Committee held one formal meeting, bringing together all Sustainability Leads to review
progress against climate targets, assess the effectiveness of ongoing initiatives and discuss mitigation of climate risks. In addition
to this meeting, Committee members maintained regular contact through email and conference calls, enabling continuous
oversight and collaboration on sustainability matters throughout the year.
CVS Group plc
Annual Report and Financial Statements 2026
36
Strategy
Strategy overview
The Group recognises that climate-related risks and
opportunities have the potential to significantly impact our
business strategy, operations and long-term performance.
The Board considers climate-related risks and opportunities
in the context of their potential to affect the Group’s ability to
deliver value or achieve strategic objectives. These risks and
opportunities are assessed with reference to potential financial
exposure, regulatory relevance and alignment with our sector
and stakeholder expectations.
In 2026, we enhanced our scenario analysis, continuing to align
with TCFD guidance to maintain a structured and science-based
approach. This included further refinement of inputs and
assumptions, informed by scientific evidence from the
Intergovernmental Panel on Climate Change (IPCC) and the
Network for Greening the Financial System (NGFS). These
enhancements support the continued use of three distinct
scenarios representing varying levels of physical and transition risk.
Physical risk:
The risk that climate-related events such as
floods, storms, heatwaves, or long-term changes like rising sea
levels and temperature shifts could disrupt operations, damage
assets, or impact supply chains.
Transition risk:
The risk that changes in policy, regulation,
technology, or market preferences during the shift to a
low-carbon economy could affect how organisations operate
or make strategic decisions.
We then assessed the external environment and current
climate-related risks relevant to the veterinary sector, followed
by defining short, medium and long-term time horizons for the
analysis. A tailored PESTLE framework was used to identify
and prioritise key drivers across political, economic, social,
technological, legal and environmental categories. These
insights shaped our assessment of the Group’s climate-related
risks and opportunities and supported the evaluation
of strategic resilience under each scenario.
The Board overseeing CVS’ climate-related issues
CVS Group Board
The Board meets at least eight times per year, with additional ad hoc meetings where required.
Role:
Oversight of sustainability and climate-related risks and opportunities.
Members:
CEO, CFO, CVO, Chair and Non-Executive Directors.
Audit and Risk
Committee
The Audit and Risk
Committee meets at
least three times per
year.
Role:
Overall
responsibility
for reviewing
the Group’s risk
management
framework and
principal risks.
Members:
Independent Non-
Executive Directors.
Sustainability Committee
During the year, the Sustainability Committee held one formal
meeting, bringing together all Sustainability Leads to review
progress, assess ongoing initiatives and discuss mitigation
of climate risks. In addition, Committee members maintained
regular contact, enabling continuous oversight and collaboration
on sustainability matters.
Role:
Support the delivery of the Group’s sustainability and
climate-related risks strategy.
Members:
Chief Executive Officer, Chief Financial Officer, Chief
Veterinary Officer, Chief People Officer, Procurement Director
and Sustainability Lead, Group Property Director, Director of
Quality Improvement, Director of Communications and Group
Investor Relations and Financial Controller.
External experts and
senior management
External experts and senior management
are consulted as necessary.
External experts
Role:
Provide expert sustainability
knowledge and guidance.
Senior management
Role:
Provide insight into the sustainability
and climate-related specific risks and
opportunities to their area of the business.
Investors and stakeholders
Investor and stakeholder views
are monitored by the Board and by
the Group Investor Relations and
Financial Controller.
Role:
Provide insight as to what
sustainability and climate-related issues,
metrics and targets are important
to them.
Steering Committee
The Steering Committee reviews and agrees the agenda ahead of Sustainability Committee meetings, co-ordinates any required
research, and ensures members are equipped with the information needed to support effective discussion and decision making.
Legislation and regulation
Stock exchange listing, disclosure rules
and relevant legislation are monitored
by our Financial Reporting team, and
supported by external advisors.
Role:
Guide what should be measured
and publicly reported.
Disclosure requirement
Our progress
Governance
Describe the Board’s oversight of climate-related risks and opportunities
continued
CVS Group plc
Annual Report and Financial Statements 2026
37
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Non-financial and sustainability information statement
continued
Risk and opportunity climate scenario assessment
For each climate scenario, we have assessed and prioritised
climate-related risks and opportunities, with each item being
evaluated based on its potential impact and likelihood.
•
Impact
is defined as the potential magnitude of the risk or
opportunity on our operations, financial performance, or
strategic objectives. Impact ratings are assessed gross of
mitigation, unless otherwise stated. To support transparency,
we align impact ratings with materiality thresholds as follows:
• Critical impact refers to risks and opportunities that could
have a detrimental effect on the going concern status of
the Group.
• Significant impact refers to risks or opportunities that could
lead to substantial financial loss, regulatory or reputational
consequences, or disruption to business activities.
• Moderate impact includes those with moderate financial
or operational implications, manageable within existing
frameworks and not considered material to the Group.
• Low impact relates to minor effects with limited or
short-term consequence.
•
Likelihood
refers to the estimated probability of the risk or
opportunity materialising within the relevant scenario timeframe:
• Very likely indicates a near-certain occurrence.
• Likely indicates a probable occurrence.
• Possible likelihood reflects reasonably possible outcomes.
• Remote likelihood indicates an unlikely or rare occurrence
under current projections.
Across our scenario analysis, over 50 risks and opportunities
have been considered per scenario. The highest impact rating
assigned to any identified risks or opportunity was moderate.
On this basis, we have disclosed those risks and opportunities
considered most likely to arise under each scenario. All risks
and opportunities disclosed in the scenarios below are
considered likely.
A separate risk summary on pages 56 and 58 outlines the
Group’s approach to risk management, including sustainability
and climate change as a principal risk. This enables a direct
comparison between climate-related risks and broader
business risks in terms of relative severity.
Strategy
continued
Strategy overview
continued
Climate scenarios
Global temperature
pathway
Physical risk
Transition risk
Justification for time horizon
<1.5˚C
Low
High
The <1.5°C scenario is aligned with the goals of the Paris Agreement and has been
selected in line with TCFD guidance, which recommends including at least one scenario
resulting in 2°C or lower warming. This pathway allows the Group to explore the
transition risks and opportunities associated with a proactive global shift toward
reducing greenhouse gas emissions and accelerating the transition to renewable energy.
2.5˚C
Moderate
Moderate–low
The 2.5°C scenario reflects the current global warming trajectory as reported by
the IPCC. According to the latest projections, if current policies remain in place,
global temperatures are expected to rise by approximately 2.2°C to 3.5°C by 2100.
As such, a 2.5°C pathway represents a realistic, middle-ground scenario that aligns
with the most probable outcomes based on existing global policy trends.
>3.5˚C
Very high
Very low
The >3.5°C scenario represents a worst-case, high-warming pathway and provides
the greatest insight into the potential physical risks and opportunities associated with
extreme climate change. It enables analysis of the impacts CVS could face if global
mitigation efforts fall short and serves as a valuable reference point for understanding
the consequences of inaction. This scenario reinforces the importance of continued
investment in sustainability initiatives and proactive climate risk management.
Time horizons
The scenarios above have been assessed across defined short, medium, and long-term time horizons, reflecting the expected
progression of climate-related risks and opportunities. While some transition risks may emerge earlier, both physical and transition
risks are expected to fully materialise over the long term, making forward-looking strategic planning essential. It is acknowledged
that long-term climate projections are subject to uncertainty due to evolving scientific knowledge, policy developments and market
dynamics. As such, estimates of timing and severity may change over time. The Group will continue to monitor these developments
and refine its assessments to ensure decisions remain aligned with the latest evidence and expectations.
Time horizon
Years
Justification for chosen scenarios
Short term (near term)
0–1 year
Aligns with our annual budget planning cycle as well as our annual climate targets.
Medium term (near term)
1–5 years
Aligns with our five-year plan and offers insight into upcoming risks
and opportunities.
Long term (mid-century)
5–25 years
Sufficient time for the development of physical and transition risks.
CVS Group plc
Annual Report and Financial Statements 2026
38
Scenario 2: 2.5˚C warming scenario (aligned with current global policy trajectory)
Risk/opportunity description
Mitigations/enablers
Related metrics/targets
Risk profile
Risk
Economic pressures associated
with global warming, such as rising
living costs and reduced household
disposable income, may impact the
affordability of veterinary services,
leading to lower uptake of preventative
care and a potential decline in pet
ownership. This could introduce
clinical and ethical complexities
for veterinary professionals.
In parallel, evolving welfare regulations
may require significant capital investment
in facility upgrades, including enhanced
ventilation, shading and heat mitigation
measures, further increasing financial
pressures on operations.
• Monitoring pet ownership
trends and forecasts across
the UK and Australia
• Financial modelling and
adaptive pricing support
for clients
• Expansion of community
outreach and subsidised
care programmes to support
vulnerable pet owners
and sustain demand for
essential services
• Readiness to respond to
updating welfare regulations
including budget allocations for
welfare-related infrastructure
• Percentage of clients
accessing financial support
or subsidised care
• Percentage of capital expenditure
in welfare-related infrastructure
• Client attrition during periods
of economic downturn
Risk type:
Transition
Risk rating:
Impact: Moderate
Time horizon:
Medium–long term
Geographical relevance
UK/Australia
Opportunity
CVS can strengthen its long-term
positioning by embedding climate
resilience and welfare compliance into
its infrastructure and service strategy.
The expansion of remote care and
telemedicine, particularly in regions
affected by climate-related disruptions,
offers an opportunity to enhance
service accessibility, maintain
continuity of care and reach new client
segments in a changing environment.
• Development of clinical protocols
tailored for remote consultations
• Client engagement initiatives
to promote uptake of
remote services
• Training programmes for staff on
delivering effective virtual care
• Revenue generated from digital
and remote service offerings
• Percentage of consultations
delivered remotely
• Reduction in travel-related
emissions from remote
consultations
• Staff training completion rate
for virtual care delivery
Opportunity type:
Transition
Opportunity rating:
Impact: Moderate
Time horizon:
Medium–long term
Geographical relevance
UK/Australia with a higher impact
in Australia due to more extreme
weather conditions increasing the
demand for remote services
Scenario 1: <1.5˚C warming scenario (aligned with the Paris Agreement)
Risk/opportunity description
Mitigations/enablers
Related metrics/targets
Risk profile
Risk
Growing stakeholder expectations for
climate-conscious operations, such as
low-carbon processes and sustainable
product offerings, are anticipated to
increase operational expenditures as
CVS transitions to more environmentally
responsible practices.
Capital investment will also be required
for green infrastructure and technology
enhancements to facilitate this transition.
• Regular reviews to track
shifting expectations and
regulatory changes for
climate-conscious operations
• Upfront communication with
suppliers to understand cost
implications of enhanced
sustainability practices
• Strategic investment in
energy-efficient infrastructure
and digital readiness with
flexibility needed in reallocation
of capital expenditure budgets
• ESG engagement metrics and
sustainability disclosures
• Percentage of capital expenditure
in green infrastructure and
technology enhancements
• Energy consumption target to
reduce annual consumption by
5% through energy-efficient
upgrades
Risk type:
Transition
Risk rating:
Impact: Moderate
Time horizon:
Medium–long term
Geographical relevance
UK/Australia
Opportunity
The transition to more environmentally
responsible practices is expected to
drive increased demand for sustainable,
welfare-aligned services across
all business lines. As stakeholder
awareness of the interconnection
between climate change and animal
welfare grows, CVS is committed
to responding to this need and
enhancing revenue opportunities
through the delivery of integrated,
climate-conscious, and
welfare-focused solutions.
• Innovations to offer sustainable
welfare-focused services
• Client education on the
interconnection between
climate change and
animal welfare
• Staff training and engagement
on climate-welfare
interdependencies
• Percentage of services aligned
with defined sustainability and
welfare criteria
• Client satisfaction scores
related to sustainable and
welfare-focused services
• Employee training completion rate
on climate-welfare integration
Opportunity type:
Transition
Opportunity rating:
Impact: Moderate
Time horizon:
Medium–long term
Geographical relevance
UK/Australia
CVS Group plc
Annual Report and Financial Statements 2026
39
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Non-financial and sustainability information statement
continued
Strategy
continued
Risk and opportunity climate scenario assessment
continued
Scenario 3: >3.5˚C warming scenario (high-warming, worst-case scenario)
Risk/opportunity description
Mitigations/enablers
Related metrics/targets
Risk profile
Risk
Climate-related disruptions, such
as fuel shortages, power outages
and transport interruptions,
could potentially result in lost
appointments, reduced retail sales
and operational inefficiencies.
In addition, the increasing frequency
and severity of extreme weather
events, including flooding and storms,
heighten the risk of physical damage
to practices and infrastructure. These
impacts could lead to unplanned
closures, increased repair costs
and long-term service disruption,
particularly in vulnerable
geographic areas.
• Development and testing of
contingency plans for power
outages, fuel shortages, and
extreme weather events
• Diversification of supply
chains to reduce reliance on
vulnerable transport routes
and fuel-dependent logistics
• Capital investment in
resilient infrastructure and
backup systems to protect
service continuity
• Comprehensive property
insurance to cover repair
and replacement costs in
the event of climate-related
physical damage
• Risk mapping to identify
locations with higher
vulnerability to weather
extremities for forward planning
linked to future veterinary
practice acquisitions
• Percentage of appointments
missed and retail orders
not fulfilled
• Percentage of capital
expenditure on preventative
building defences
• Number of practices equipped
with backup power systems
• Average downtime per practice
due to climate-related disruptions
Risk type:
Physical
Risk rating:
Impact: Moderate
While extreme weather events
pose a credible threat, the overall
impact is considered moderate
due to the geographic dispersion
of our operations across the UK
and Australia. This distribution
reduces the likelihood of
simultaneous disruption
across all sites.
This is supported by existing
mitigation measures, including
robust property insurance and
infrastructure resilience planning.
These controls help contain
the risk to a manageable level,
even under more severe
climate scenarios.
Time horizon:
Medium–long term
Geographical relevance
UK/Australia, with a higher flood
risk in coastal areas
Opportunity
Increasing weather extremes present
an opportunity for CVS to expand
emergency care, diagnostics and
mobile response services to meet rising
demand and support animal welfare.
There is also potential to offer advisory
services that help clients prepare for
and manage climate-related welfare
risks, positioning CVS as a trusted
partner in animal care resilience.
• Development of mobile
veterinary units equipped for
emergency response
• Creation of climate-related
animal welfare advisory
services offering clients tailored
guidance on heat stress,
emergency preparedness and
care continuity
• Partnerships with local
authorities and animal
welfare organisations
• Revenue generated from
emergency and mobile services
• Response time to emergency
call-outs during extreme
weather events
• Client uptake of climate-related
advisory services
Opportunity type:
Physical and transition
Opportunity rating:
Impact: Moderate
Time horizon:
Medium–long term
Geographical relevance
UK/Australia
Strategy resilience
The Group has assessed the potential impacts of climate
change under a range of plausible warming scenarios, including
a <1.5°C, 2.5°C, and >3.5°C pathway. This analysis confirms
that while the scale and nature of risks vary significantly across
scenarios, the Group’s core strategy remains resilient. The
diversification of services across companion animal, equine,
farm and online retail, combined with CVS’s capacity to innovate
in care delivery and invest in digital infrastructure, positions the
business to adapt effectively to changing conditions.
In lower-warming scenarios, the strategy supports growth
through sustainable service innovation, client engagement,
and operational efficiency. In higher-warming scenarios, CVS is
prepared to shift focus towards resilience, emergency response
and mobile or decentralised service models. Across all pathways,
scenario analysis has reinforced the importance of flexibility
and continued investment in workforce capability, digital tools
and infrastructure. Strategic oversight by the Board ensures
that climate-related insights are embedded into long-term
planning, risk management and capital allocation.
CVS Group plc
Annual Report and Financial Statements 2026
40
Risk management
Disclosure requirement
Our progress
Risk management
Describe the Group’s
processes for
identifying and
assessing climate-
related risks
The Group has established a developing process for identifying and assessing climate-related risks, which is
progressively being integrated into our overall risk management framework. This approach supports the Group in
addressing potential threats and opportunities arising from climate change, helping to safeguard our business operations
and promote sustainable growth. During the reporting period, the Chief Executive Officer presented on sustainability
developments and key highlights at all scheduled Board meetings, supporting ongoing awareness and strategic oversight.
While climate-related risks are currently addressed through these updates, the Group is committed to enhancing its
governance approach and from the next reporting period, sustainability risk is a standing agenda item at Board meetings
within the Chief Executive Officer update, ensuring more consistent and formal integration into the Group’s risk management
discussions. Detailed information on our broader risk management process is available on pages 56 to 63 of this Annual
Report.
The Board actively monitors emerging and existing regulatory requirements related to climate change, including emissions
limits, carbon taxes and sustainability disclosure obligations. Regular updates on regulatory developments are provided
to the Board, enabling proactive adaptation of our strategy and ensuring ongoing compliance. For instance, the Group
assesses the potential financial impact of climate-related risks, and considers energy efficiency measures in its annual
capital investment programme.
To support this, we conduct an in-depth scenario analysis, as outlined on pages 39 and 40 (“Describe the climate-related
risks and opportunities identified in the short, medium and long term”). This analysis includes a comprehensive assessment
of climate-related risks and opportunities, evaluating their probability and impact using a RAG (red, amber, green) status.
Describe the Group’s
process for managing
climate-related risks
The Group manages climate-related risks through a structured risk management process, supported by a range of
mitigation strategies, including:
•
Regulatory compliance:
Monitoring emerging climate regulations and ensuring timely compliance through policy
updates and staff training.
•
Operational resilience:
Implementing energy efficiency initiatives, enhancing waste management practices and
adopting sustainable procurement standards to minimise environmental impact. We are actively investing in moving all
UK sites to half-hourly electricity meter readings and integrating an artificial intelligence tool to gather energy inefficiencies.
Data will be made available on a portal, so sites can see what they are consuming and make necessary adjustments.
•
Risk transfer:
Where appropriate, utilising insurance to transfer financial risks associated with climate events, such as
extreme weather affecting assets.
•
Stakeholder engagement:
Collaborating with suppliers, customers, and investors to align on sustainability goals
and enhance climate resilience.
The Sustainability Committee oversees the implementation of these mitigation strategies and continuously monitors
climate-related risks on an ongoing basis using a variety of tools and metrics. While no significant climate-related risks
have been identified to date, the Group has established a process whereby any emerging risks, along with proposed
mitigation actions, are presented to the Board for review, approval or further recommendations prior to implementation.
This approach ensures readiness to respond appropriately as risks evolve.
Describe how
processes for
identifying, assessing
and managing
climate-related risks
are integrated into
the Group’s overall
risk management
The Group’s comprehensive risk management approach is detailed in the Risk Management section in the Annual Report.
For 2026, one of the principal risks identified by the Board remains sustainability and climate change. This risk is evaluated
rigorously, with its impact and probability being considered and evaluated against the RAG rating criteria. During these
reviews, we also assess the effectiveness of existing mitigating factors and note any significant changes since the
last evaluation.
In addition, the Group has built upon the enhanced climate risk assessment framework and revised scenario analysis
introduced in the prior year. Rather than undertaking a full refresh, management has further refined and applied the
existing scenarios, ensuring continued alignment with emerging climate data, regulatory expectations, and industry
developments. This approach supports ongoing resilience and adaptability to climate-related risks and opportunities.
Metrics and targets
Disclose the metrics
used by the Group to
assess climate-related
risks and opportunities
in line with its strategy
and risk management
process
“Care at our Heart” – ESG strategy underpinning the Group’s overall business model and strategy which can be found
on pages 10, 11, 16 and 17 of this Annual Report.
Streamlined Energy and Carbon Reporting (SECR) – can be found on pages 43 to 45 of this Annual Report.
The key metrics used for assessing climate-related risks and opportunities are primarily those disclosed in our SECR
which covers our energy and carbon usage. This is our most measurable, understandable and actionable data and
therefore subsequent metrics can be applied.
The Group also has other sustainability-related metrics and targets beyond the scope of climate-related metrics and
targets which are disclosed in our SASB report which can be found in our dedicated Sustainability Report 2026 on
pages 32 to 38 alongside pages 32 to 34 of this Annual Report.
Disclose Scope 1,
Scope 2 and, if
appropriate, Scope 3
greenhouse gas (GHG)
emissions and the
related risks
The Group’s Scope 1 and Scope 2 emissions, together with the methodology used to calculate these emissions, are
disclosed within the SECR Report on pages 43 to 45.
During the year, the Group further enhanced its emissions reporting by extending the SECR disclosure to include its
Australian operations, improving the completeness and consistency of emissions data reported across the Group.
The Group does not currently report Scope 3 emissions. During the year, the Group continued to develop its
understanding of emissions arising across its value chain and expanded its assessment of relevant Scope 3 emissions
categories. While progress has been made in measuring these emissions, further work is required to validate the
underlying data and methodologies before disclosures can be made with an appropriate level of confidence.
CVS Group plc
Annual Report and Financial Statements 2026
41
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Non-financial and sustainability information statement
continued
Disclosure requirement
Our progress
Metrics and targets
continued
Describe the targets
used by the Group
to manage climate-
related risks and
opportunities and
performance
against targets
The Group’s sustainability targets have been developed progressively over several years. Following the introduction
of a more consistent framework in the prior year, the Group has continued to apply annual targets designed to support
meaningful year-on-year comparison.
Targets are reviewed annually to ensure they remain appropriate and achievable, noting that certain targets, such as
percentage-based reductions, may become less relevant over time due to operational limits or diminishing returns.
The Group does not currently use a formal base year for emissions reduction, but performance is tracked internally
and reported within broader sustainability disclosures.
The Group’s sustainability targets can be found on page 34. All targets used by the Group to manage climate-related risks
and opportunities are absolute.
Looking ahead
This year, we continued to strengthen the quality, scope and
transparency of our climate-related reporting. A significant
enhancement was the expansion of our emissions reporting
to include Australian operations within our SECR disclosures,
marking an important step towards more comprehensive and
consistent sustainability reporting across our operations.
While we have continued to enhance our understanding of
greenhouse gas emissions across our value chain, further work
is required to validate the underlying data and methodologies
before Scope 3 emissions are included within external reporting.
The Group remains committed to achieving full Scope 3 reporting
compliance by 30 June 2027 and will continue to enhance its
data collection processes and supplier engagement activities
to support this ambition.
We also recognise that understanding the financial implications
of climate-related risks and opportunities is essential to effective
decision making and long-term business resilience. While our
climate-related risks and opportunities have been assessed
qualitatively, their potential financial impacts have not yet been
quantified. We are developing an appropriate methodology to
support robust financial quantification and aim to incorporate
quantified disclosures into our reporting for the year ending
30 June 2027.
Looking forward, a key area of focus will be continuing
our preparations for reporting under the UK’s Sustainability
Reporting Standards (UK SRS). We see this as an opportunity
to build on the progress made to date and further enhance the
transparency, consistency and robustness of our sustainability
disclosures. During the year, we developed a transition plan to
guide our progression towards UK SRS reporting, establishing a
timeline for the activities required to achieve reporting readiness.
Over the coming year, we will continue to strengthen governance,
improve the quality and granularity of ESG data, refine our climate
risk assessment capabilities and develop the processes and
controls required to support reporting under UK SRS for the
year ending 30 June 2028.
Through these initiatives, we aim to build a more resilient,
transparent and sustainable business while ensuring we are well
positioned to meet the evolving expectations of our stakeholders
and the changing sustainability reporting landscape.
Risk management
continued
Non-financial and sustainability information statement
This Annual Report includes disclosures required under
Sections 414CA and 414CB of the UK Companies Act 2006
(as amended), covering non-financial and
sustainability matters.
Key information on environmental impact, employee
wellbeing, community engagement, human rights, and
anti-corruption practices is integrated throughout the
Strategic Report. This reflects our commitment to
responsible veterinary care, sustainable growth, and
long-term stakeholder value.
The table to the right provides a guide to where this
information can be found within the report.
Reporting requirement
Further information
Business model
Page 10
Environmental matters
Pages 35 to 42 and 82
Employee-related matters
Pages 28 to 31 and 80
Social and community matters
Pages 34 and 81
Respect for human rights
Pages 28 to 31
Anti-corruption and anti-bribery matters
Pages 72 to 78
Climate-related financial disclosures (TCFD)
Pages 35 to 42
Principal risks and uncertainties
Pages 59 to 63
Non-financial KPIs
Pages 20 and 21
CVS Group plc
Annual Report and Financial Statements 2026
42
Streamlined Energy and Carbon Reporting (SECR)
Scope 1
Scope 2
Transport and vehicles
Owned property
Anaesthetic gases
Purchased electricity
Purchased heating and cooling
The Group is required under the Streamlined Energy and
Carbon Reporting (SECR) regulations to report how it manages
its energy consumption and carbon emissions and has used a
third-party consultant to advise on this and support with the
preparation of this SECR Report. Since 2020, we have published
our direct greenhouse gas (GHG) emissions from sources that
are controlled or owned by the Group (Scope 1) and indirect
GHG emissions from the Group’s consumption of purchased
electricity (Scope 2).
Monitoring and reporting our greenhouse gas emissions
enables us to better understand, manage and reduce our
environmental impact. This supports our purpose of providing
the best care to as many animals as possible, recognising the
important link between environmental sustainability, animal
health and long-term business resilience. Through targeted
initiatives across the Group, we continue to improve energy
efficiency, reduce emissions and minimise our impact on the
natural environment.
Our energy efficiency actions
Our energy and carbon reduction programme continues to
focus on improving the efficiency of our operations, reducing
emissions and improving the quality of energy data across our
estate. During the year, our efforts were concentrated on two
key areas:
1. improving energy monitoring and consumption management; and
2 investing in energy-efficient buildings and infrastructure.
Improving energy management across our estate
A key priority during the year was enhancing our ability to
measure and manage energy consumption. We invested
significantly in the rollout of smart meters across our UK estate,
providing more accurate and timely energy data to support
operational decision-making and identify opportunities for
efficiency improvements.
Historically, automated energy data was available for only a
limited number of sites. By the end of the 2026 financial year,
smart meters had been installed across 85% of gas supplies
and over 90% of half-hourly electricity supplies. This improved
visibility of energy consumption, reduced reliance on estimated
readings and strengthened our ability to target energy reduction
initiatives. We are also exploring the use of AI-enabled analytics
to help identify further opportunities to improve efficiency and
manage energy consumption more effectively.
Investing in energy-efficient buildings
One of our strategic goals is to provide great facilities and
equipment whilst ensuring our operations are as energy
efficient as possible. We have pledged to invest approximately
£30m per annum (inclusive of maintenance) to upgrade and
relocate existing practices and open new practices to a
minimum facility standard.
As part of this ongoing investment programme, sustainability
considerations continue to be incorporated into new, relocated
and refurbished practices, including the use of energy-efficient
LED lighting, improved heating systems, insulation upgrades,
smart metering and other technologies designed to improve
operational efficiency and reduce energy consumption. We also
continue to invest in Building Management Systems (BMS) at
our larger and more complex sites to support more efficient
control and monitoring of building energy usage.
During the year, we commenced a trial of on-site renewable
energy generation through solar installations at our owned sites
in Rosemullion and Bishop Auckland. Representing both larger
and standard practice formats, these pilot projects will help us
assess the potential for wider deployment of solar generation
across our estate, reducing reliance on grid electricity and
supporting our longer-term decarbonisation objectives.
Since August 2021, all UK veterinary practice sites have
continued to source electricity from 100% renewable
electricity tariffs.
Supporting lower-emission transport
We continue to reduce emissions associated with our vehicle
fleet and colleague travel. At the end of the year, 160 of our
574 vehicles were classified as ultra-low emission vehicles,
including electric and hybrid models, increasing the proportion
of ultra-low emission vehicles within the fleet from 25.5%
to 27.9%.
Our transition to lower-emission vehicles has been supported
through targeted vehicle procurement programmes and the
continued rollout of our electric vehicle salary sacrifice scheme.
More than 60 colleagues have now participated in the scheme,
supporting the adoption of electric vehicles and encouraging
lower-carbon travel choices across the Group.
CVS Group plc
Annual Report and Financial Statements 2026
43
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Streamlined Energy and Carbon Reporting (SECR)
continued
Our energy usage and carbon emissions
UK
2026
2025
Change (%)
Energy
kWh
Emissions
tCO
2
e
Energy
kWh
Emissions
tCO
2
e
Energy
kWh
Emissions
tCO
2
e
Comments
Scope 1 emissions (direct)
The decrease in these emissions
arises from a reduction in gas
consumption, transport emissions
and other fuels.
Gas consumption
9,318,242
1,699
10,667,667
1,951
-12.6%
-12.9%
Transport
8,446,990
2,141
10,031,427
2,520
-15.8%
-15.0%
Other fuels
266,863
2,112
274,040
2,221
-2.6%
-4.9%
Total Scope 1
18,032,095
5,952
20,973,134
6,692
-14.0%
-11.1%
Scope 2 emissions
(energy indirect)
Electricity consumption increased
across the portfolio; however,
related emissions decreased due
to the continued decarbonisation
of the UK electricity grid.
Electricity
(location-based method)
15,391,602
2,016
13,976,596
2,894
10.1%
-30.3%
Electricity
(market-based method)
1
—
—
—
—
—
—
Total Scope 1 and 2
(location-based method)
33,423,697
7,968
34,949,730
9,586
-4.4%
-16.9%
Total Scope 1 and 2
(market-based method)
18,032,095
5,952
20,973,134
6,692
-14.0%
-11.1%
Intensity ratio (tCO
2
e
per £m revenue)
The intensity ratio has decreased
from the prior year due to our
reduction in total emissions and
revenue growth of the Group.
Location-based method
12.6
15.4
-18.5%
2
Market-based method
9.4
10.8
-12.8%
2
Global
2026
Energy
kWh
Emissions
tCO
2
e
Comments
Scope 1 emissions (direct)
2026 global Scope 1 and 2 emissions include both UK and
Australian operations, whereas 2025 emissions data included UK
operations only. Comparative 2025 figures have not been restated
to include Australian operations due to insufficient historical data.
From 2027 onwards, global comparatives will be on a like-for-like
basis encompassing both UK and Australian operations.
Gas consumption
9,370,301
1,708
Transport
8,446,990
2,141
Other fuels
266,863
2,433
Total Scope 1
18,084,154
6,282
Scope 2 emissions
(energy indirect)
Electricity
(location-based method)
16,643,444
2,673
Electricity
(market-based method)
1,251,842
647
Total Scope 1 and 2
(location-based method)
34,727,598
8,955
Total Scope 1 and 2
(market-based method)
19,335,996
6,929
Intensity ratio (tCO
2
e
per £m revenue)
Location-based method
12.6
Market-based method
9.7
1.
No emissions arise under the market-based method, as the Group’s UK electricity portfolio is supplied under a 100% renewable electricity contract
with EDF Energy, which reports emissions of 0 tCO₂e/kWh for electricity supplied under its renewable tariff.
2. The annual percentage change in the UK intensity ratio has been calculated using the underlying, unrounded figures.
Location-based:
Emissions calculated using average grid electricity emission factors for the region of consumption.
Market-based:
Emissions calculated using contractual electricity emission factors, reflecting purchased renewable energy
agreements where applicable.
CVS Group plc
Annual Report and Financial Statements 2026
44
SECR methodology
The methodology outlined below explains the basis on which
the Group’s energy consumption and greenhouse gas emissions
have been calculated for SECR reporting purposes.
Reporting scope
The Group’s SECR disclosures cover the reporting period from
1 July 2025 to 30 June 2026 and include energy consumption
and associated greenhouse gas (GHG) emissions arising from
the Group’s operations in the UK and Australia.
Reported energy consumption includes purchased electricity
and natural gas used across the Group’s operations, fuel
consumed by UK company-owned vehicles, and other fuels
including diesel, kerosene and propane. Reported greenhouse
gas emissions also include anaesthetic gases (isoflurane and
sevoflurane) used within the UK and Australian businesses.
Electricity and natural gas consumption
Electricity and natural gas consumption data were compiled
using utility invoices and half-hourly automated meter reading
(HH/AMR) data. The Group’s UK electricity portfolio is supplied
under a 100% renewable electricity contract with EDF Energy,
which reports emissions of nil tCO₂e/kWh for renewable tariff
electricity supplied.
Estimation methodology
UK operations
Where actual consumption data was unavailable, appropriate
estimation techniques were applied. For sites with incomplete
data, missing periods were estimated using average consumption
from verified periods. Where no actual consumption data was
available, contracted estimated annual consumption values
were utilised.
Australian operations
As complete consumption data was not available for the full
reporting period, available consumption data was annualised
to estimate full-year usage. Where no consumption data was
available for a site, consumption was estimated using data from
comparable practices of a similar size and operational profile.
Company-owned transport
UK company-owned transport fuel consumption was calculated
using vehicle mileage data and the relevant UK Government
GHG Conversion Factors for Company Reporting for petrol,
diesel and electric vehicles. Mileage data is collected and
collated monthly, with fuel consumption and associated
greenhouse gas emissions subsequently derived using the
applicable conversion factors.
The Group has a limited number of company-owned vehicles in
Australia and associated emissions are not currently included
within the reported figures.
Other fuel consumption and anaesthetic gases
Consumption of other fuels, including diesel, kerosene and
propane, was calculated using fuel consumption data obtained
from supplier invoices and the relevant fuel-specific conversion
and emission factors.
Emissions associated with anaesthetic gases (isoflurane and
sevoflurane) were calculated using consumption quantities
obtained from supplier invoices and applicable conversion factors.
Emissions methodology
Reported emissions comprise Scope 1 emissions from the
combustion of natural gas, UK transport fuels, other fuels and
anaesthetic gases, together with Scope 2 emissions from
purchased electricity.
Scope 2 emissions relating to purchased electricity have been
calculated using the location-based method, with market-based
Scope 2 emissions also calculated where supplier-specific
information was available.
Reporting basis and emission factors
Following the Group’s move to the Main Market, Australian
operations have been included within the SECR reporting
boundary for the first time in FY26. Accordingly, comparative
period disclosures do not include Australian energy
consumption or associated emissions.
In accordance with the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013, the Group has elected
not to make voluntary disclosures relating to Scope 3
greenhouse gas emissions.
The Group’s greenhouse gas emissions have been calculated
in accordance with the UK Government Environmental Reporting
Guidelines and the UK Government GHG Conversion Factors for
Company Reporting. Where energy consumption occurred in
Australia, applicable Australian emission factors were applied
to reflect the location of the underlying activity.
The Group has chosen to report gross Scope 1 and 2 emissions
in tonnes of CO
2
equivalent (tCO
2
e) per £m revenue as this is
a common metric used in corporate GHG reporting.
CVS Group plc
Annual Report and Financial Statements 2026
45
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Clinical review
“For pets, for life.”
At CVS, preventative healthcare is central to improving lifelong
outcomes for pets. By supporting early intervention, informed
pet ownership and personalised care planning, our approach to
care can enhance client engagement and empower veterinary
teams to deliver proactive, high-quality care throughout every
stage of a pet’s life.
Launch of Life Stage Assessments
We launched our Life Stage Assessments project to support pet
wellness across our practices. The framework provides age,
breed, and lifestyle-based recommendations by dividing a pet’s
life into distinct stages, reflecting changing physiological and
behavioural needs. It supports tailored healthcare planning,
early disease detection and preventative care, while enabling
veterinary teams to deliver individualised recommendations
with clinical flexibility in implementation.
Embedding preventative care to improve outcomes
for pets, clients and veterinary teams
Pet wellness is a core element of our Life Stage Assessment
project, reflecting CVS’ commitment to proactive, holistic care
throughout every stage of a pet’s life. By integrating wellness
principles into routine practice, we can help to improve patient
outcomes, strengthen client relationships and support
rewarding careers for our colleagues.
Pet wellness takes a preventative approach to healthcare,
focusing not only on physical health but also on the emotional
and behavioural wellbeing of pets. Through regular Life Stage
Assessments and tailored interventions, practices can identify
risks earlier, provide bespoke support and empower owners to
make informed decisions about their pets’ care.
Supporting owners through education and guidance
Life Stage Assessments provide opportunities to educate
owners on nutrition, exercise, enrichment and preventative
healthcare. By understanding their pet’s age, breed and lifestyle
needs, owners are better equipped to recognise early signs of
illness and make informed decisions about their care.
Preventative healthcare can also improve financial predictability
by reducing the need for more complex treatments and helping
owners budget for essential care through wellness planning and
healthcare schemes. Regular wellness discussions strengthen
engagement with veterinary services and support stronger
human-animal bonds, helping pets live healthier, happier lives.
Creating benefits across the veterinary team
The impact of wellness programmes extends beyond pets and
their owners, delivering significant benefits for our veterinary
teams and practices. By focusing on prevention and early
intervention, teams can provide personalised, patient-centred
care aligned with their clinical expertise and professional values.
Supporting pets earlier in their healthcare journey can lead
to improved outcomes and more positive client interactions,
contributing to professional satisfaction while recognising
the important and often emotionally demanding nature
of veterinary care.
Looking ahead
As CVS continues to embed the Life Stage Assessment project,
pet wellness remains central to our approach to veterinary care.
By promoting preventative healthcare, informed pet ownership
and proactive, personalised care, the programme delivers
meaningful benefits for pets, clients and clinical teams.
Since January 2026, 5,449 Life Stage Assessments have
been recorded, demonstrating strong engagement with the
programme across practices. The highest levels of adoption
have been seen in the early life stages, providing a strong
foundation as we continue to increase the reach and impact
of assessments across all stages of a pet’s life.
As we enter the programme’s second year, we will focus
on colleague feedback, education and targeted support to
maximise the impact of Life Stage Assessments and further
strengthen preventative care outcomes.
“The Life Stage Assessment has
transformed our consultations,
providing a clear framework
while supporting personalised
care. Clients really value the
focus on overall wellbeing,
leading to earlier interventions,
stronger client relationships
and better patient outcomes.”
Amy Buckingham
Veterinary Nurse, Forrest House Veterinary Centre
CVS Group plc
Annual Report and Financial Statements 2026
46
Q: What have been the key lessons
for the profession?
There is zero doubt in my mind that vets, nurses and all of
our supporting teams put animals first every day. We provide
a fantastic service for pets but this investigation has shown
us that we can definitely improve on our communication with
animal owners, in particular ensuring that our clients can see
how we are applying the principles of contextualised care
in every decision that we help them make.
Q: Which of the CMA remedies do you
expect will have the greatest impact on
clinical practice?
Most of the remedies are solely a commitment to consistently do
what we already do well: good communication, keeping clients
up to date with estimates and bills, and sharing all the options
available to them for the care of their animals. The main impacts
are from the increased administrative load associated with
ensuring that estimates are kept up to date and are provided in
writing to pet owners. This is easier said than done when dealing
with the inherent complexity and unpredictable nature of animal
healthcare; however, I am confident our teams will meet this
challenge successfully.
Q: The CMA has closely examined the role
of larger veterinary groups in the market.
From a clinical perspective, what benefits
can scale bring to patient care, clinical
governance and outcomes?
Our colleagues tell us that being part of CVS gives them
improved access to advice and specialist knowledge, for
example through VetOracle, a network of colleagues across
the UK with common access to all clinical notes, and a
consistent culture of support. This support extends from
colleague wellbeing to our approach to quality improvement,
equipment training and antimicrobial stewardship. Our scale
brings consistency of experience and quality for pet owners
that they can really depend on.
Q: If you could say something to all your
colleagues right now, what would it be?
I am incredibly proud of the veterinary profession and
particularly all of my colleagues at CVS. I know that you strive
to do the right thing every single moment of every day and
that the scrutiny of this past couple of years have been tough.
Now is the time for us to show the pet owning public that the
trust they have always had in us is well placed and to help
them receive the care that they and their animals deserve,
and – most of all – thank you!
Q: What good has come out of the CMA
investigation for the profession?
Although the process of the investigation and the media
attention has been very distressing for veterinary professionals
it has brought about the necessary Government attention to
prioritise new veterinary legislation. The Veterinary Surgeons
Act 1966 is significantly overdue for modernisation and the
whole profession welcomes the news that reform is underway.
Q
A
&
with our Chief Veterinary Officer, Paul Higgs
The Competition and Markets Authority has
now completed its investigation into Veterinary
Services for Household Pets and we have taken
the opportunity to hear from Paul Higgs about
what it has meant to and for the profession.
CVS Group plc
Annual Report and Financial Statements 2026
47
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Financial review
Financial discipline
supporting better care
Financial highlights
I am pleased to present the 2026 Financial Review which marks
another year of continued momentum for the Group, with growth
in revenue, adjusted EBITDA and adjusted earnings per share as
well as continued strategic expansion in Australia further
strengthening our platform for future growth. It was particularly
pleasing to maintain adjusted EBITDA margins during the year
against a backdrop of continued weakened consumer
confidence and inflationary pressures, particularly from the
annualisation of the impact of increases in both national living
and minimum wage and Employer National Insurance
contributions announced in April 2025. Like-for-like revenue
growth was +2.1% (2025: +0.2%). The Group has consistently
delivered 5%–6% CAGR like-for-like revenue in the five years
pre-COVID
-19 in 2020 and the six years post COVID-19 and we
are confident that we will return to a more stable and consistent
growth of between 4%–8%.
During the year we completed two significant milestones: our
move to the Main Market with FTSE 250 Index inclusion in March
2026, and the refinancing of our £350.0m loan facilities on
improved terms. The facilities have been extended to May 2030
with an option for a further one-year extension, and comprise:
• a term loan of £125.0m repayable on 20 May 2030;
• a revolving credit facility of £225.0m repayable on
20 May 2030; and
• the existing overdraft facility of £5.0m, renewable annually.
The margin payable on drawn debt has reduced by 20 basis
points. These facilities are provided by a syndicate of eight
banks, including Westpac Banking Corporation, the first
Australian bank to join the Group’s financing syndicate. We
continue to have significant headroom in both committed and
undrawn debt, and we remain committed to maintain leverage
at no more than 2.0x net debt to bank test EBITDA.
Prior to the move to the Main Market the Group commenced
a £20.0m share buyback programme in October 2025, which
was completed in the first calendar quarter of 2026, before
commencing a further £50.0m share buyback programme in May
2026, which is expected to be completed by November 2026.
In March 2026, the Competition and Markets Authority (CMA)
published its final report following its investigation into the
veterinary services market. As a Group we welcome the end of
the investigation and the remedies, many of which we already
comply with. We have price lists published on our websites and
have completed the vast majority of the joint rebranding of our
UK companion animal practices. We are confident post the
CMA Market Investigation there will again be an attractive
pipeline of acquisition opportunities in the UK where CVS has
c.8%–9% market share. The cost of the remedy implementation
of £5.1m is shown within administrative expenses and as
an APM in exceptional items.
We have continued with our progress in Australia where we
now have 57 practice sites (2025: 43 practice sites) following
a further six acquisitions of 14 practice sites for an aggregate
initial consideration of £45.4m, including the purchase of
a minority interest during the year. Australia now represents
c.11% of Group revenue and continues to represent an
exciting opportunity with a strong runway ahead.
CVS Group plc
Annual Report and Financial Statements 2026
48
We continue to maintain a disciplined approach to capital
allocation where each investment opportunity is assessed,
based on what is most accretive over the long term, against
other capital deployment opportunities before making
investment decisions.
This approach is underpinned by a hierarchy of clear priorities.
Our first priority is to maintain a healthy balance sheet. We
benefit from favourable cash flow dynamics with operating
cash conversion in the year of 70.6% (2025: 76.9%) and free
cash flow of £69.2m (2025: £72.2m)
(read more about our
APMs on pages 176 to 180). Net bank borrowings increased
in the year to £199.6m from £131.4m. This cash generation,
alongside our committed bank facilities and leverage at 30 June
2026 of 1.63x, provides us with capital for organic and inorganic
growth, and also provides resilience through economic cycles.
We have committed to maintain a progressive dividend policy
after which the remaining capital is then directed to whichever
option generates the highest-risk-adjusted returns over the
longer term. In addition to the acquisition opportunities outlined
above we have capital investment opportunities to invest in
organic growth. During the year, we invested a total of £36.4m
inclusive of maintenance capex (2025: £33.2m for continuing
operations) on capital investment projects. This was focused
on our practices to support increased revenue and enhanced
margins through improved clinical facilities and equipment,
and on enhanced client experience and loyalty through IT
modernisation. During the year, we saw an increase in both
employee and client Net Promoter Scores.
Additional returns of capital to shareholders will also be
considered where it is the most accretive of our capital
investment options or where we have capital in excess of
our requirements.
Statutory financial highlights are shown below which support
our ability to deliver further growth:
2026
2025
Change
%
Revenue (£m)
712.8
673.2
+5.9%
Gross profit (£m)
315.6
285.7
+10.5%
Operating profit (£m)
47.6
49.8
-4.4%
Profit before tax (£m)
32.0
32.6
-1.8%
Profit from continuing
operations (£m)
17.8
19.1
-6.8%
Basic earnings per share
continuing operations (p)
24.4
26.3
-7.2%
Alternative performance measures:
Alternative performance measures (APMs)
2026
2025
Change
%
Adjusted EBITDA (£m)
141.5
134.6
+5.1%
Adjusted profit before tax (£m)
84.9
78.9
+7.6%
Adjusted earnings per share (p)
85.6
80.1
+6.9%
Adjusted EBITDA, adjusted profit before tax and
adjusted earnings per share (EPS)
Adjusted EBITDA
Adjusted EBITDA increased +5.1% to £141.5m from £134.6m
benefitting from increased revenue and adjusted EBITDA
margin remained stable at 19.9% (2025: 20.0%) within the
19% to 23% ambition, despite an increase in National
Insurance contributions and wage inflation.
Gross profit margin, excluding clinical staff costs, increased
to 78.6% from 78.4%.
Total employment cost as a percentage of revenue across
clinical and admin increased to 52.3% from 52.2% with cost
efficiencies offsetting the wage inflation pressures from
national and living wage increase and the Employer National
Insurance increase which we estimate to have an annualised
impact in the region of £3.0m and £8.0m respectively.
The Group also experienced an increase in IT costs during the
year to support additional cyber security and enhanced client
experience. During the year the Group recognised Research
and Development Expenditure Tax Credits of £15.7m (2025:
£15.1m). Further information on RDEC is shown in note 2.
Adjusted profit before tax
Adjusted profit before tax increased +7.6% to £84.9m (2025:
£78.9m) benefitting from an increase in adjusted EBITDA and
interest, partially offset by an increase in depreciation.
Depreciation in the year increased to £41.0m from £38.5m
following continued investment in our facilities and IT.
Interest reduced to £15.6m from £17.2m as a result of lower
average borrowings during the year following the divestment
of our Crematoria division in late FY25.
Adjusted EBITDA and adjusted profit before tax exclude the
impact of amortisation of intangible assets, costs relating to
business combinations and exceptional items.
A reconciliation between statutory operating profit and
adjusted EBITDA is shown below:
2026
£m
2025
£m
Operating profit
47.6
49.8
Adjustments for:
Amortisation, depreciation,
impairment and profit on disposal
of property, plant and equipment
68.5
63.9
Costs relating to business combinations
14.8
14.9
Exceptional items
10.6
6.0
Adjusted EBITDA
141.5
134.6
Adjusted EPS
Adjusted EPS increased 6.9% to 85.6p from 80.1p benefitting
mainly from increased adjusted profit before tax, and with a
further benefit from the reduced average number of shares in
issue following the share buyback programmes undertaken
during the year. The adjusted effective tax rate was 27.4%
(2025: 26.9%).
Further information about our APMs and reconciliation to the
closest statutory measure can be found in the APM glossary
on pages 176 to 180.
CVS Group plc
Annual Report and Financial Statements 2026
49
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Revenue
Revenue in the year increased by +5.9% to £712.8m from
£673.2m benefitting from acquisitions made in the current and
prior year; and like-for-like revenue (LFL) growth was +2.1%
(2025: +0.2%). Australian revenue increased to £79.1m (2025:
£52.1m) and now represents c.11% of Group revenue.
LFL performance across our Veterinary Practice division was
+1.0%, reflecting weaker footfall from a continuation of softer
market conditions in the UK and a weaker Q4 partly impacted
by the extreme hot weather with owners opting to keep their
pets at home. It is also important to note that the COVID-19
puppy and kitten cohort are currently in their young healthy
adult years, visiting the vets less often, and as these pets age
they will require more veterinary intervention.
During the year, subscription revenue from our Healthy Pet Club
scheme increased +3.5% to £95.5m from £92.3m. Membership
numbers marginally reduced to 508,000 members as at 30 June
2026 (2025: 519,000). In July 2026 we were delighted to launch
an enhanced scheme, Healthy Pet Club Advanced, providing
unlimited consultations and an online sign up customer journey
from August 2026, making it even easier for customers to
register and access our services.
Gross profit and gross profit margin
Gross profit increased by 10.5% to £315.6m from £285.7m
and gross profit margin increased to 44.3% from 42.4%.
Cost of sales excluding clinical staff costs as a percentage
of revenue decreased to 21.4% from 21.6% from delivery of
buying synergies during the year. Clinical staff costs as a
percentage of revenue also reduced to 34.3% from 36.0%
with the Group focusing on delivering cost efficiencies.
Operating profit
Operating profit decreased -4.4% to £47.6m from £49.8m
and operating margin decreased to 6.7% (2025: 7.4%).
The decrease in operating profit follows an increase in adjusted
EBITDA offset by increased depreciation to £41.0m from £38.5m,
amortisation costs to £27.5m from £25.4m and increased
exceptional costs to £10.6m from £6.0m. Exceptional costs
relate to the costs incurred in relation to our move to the Main
Market in January 2026 and the CMA Market Investigation.
Further information is available on page 147.
Operating profit also includes costs relating to business
combinations of £14.8m (2025: £14.9m) which include costs in
relation to due diligence, stamp duty and contingent consideration
(IAS 19) which is booked to the income statement over time and
not to goodwill as a result of continuous employment being one
of the conditions needed to be met for payment.
Profit before tax
Profit before tax decreased -1.8% to £32.0m from £32.6m.
The reduction in operating profit was partially offset with a
£1.6m decrease in interest to £15.6m from £17.2m as a result
of lower average borrowings during the year, following the
divestment of our Crematoria division in FY25.
Taxation
The effective tax rate on profit before tax was 44.4% in 2026
(2025: 41.4% on continuing operations). The rate reflects the
difference statutory tax rates in the jurisdictions where the
Group operates, together with the impact of expenses not
deductible for tax purposes, predominantly in connection
with acquisitions.
The Group’s tax charge for the year was £14.2m (2025: £13.3m).
All of the Group’s revenues and the majority of its expenses
are subject to corporation tax. The main expenses that are not
deductible for tax purposes are certain acquisition related costs,
depreciation on fixed assets and amortisation of certain assets
where no corresponding tax relief is available.
Dividend
In line with the Group’s capital allocation hierarchy and
dividend policy, the Board is recommending the payment
of a final dividend of 9.0p per Ordinary share (2025: 8.5p).
Subject to shareholder approval at the Annual General Meeting
to be held on 25 November 2026, the dividend will be paid on
4 December 2026. The ex-dividend date is 5 November 2026
and the record date is 6 November 2026.
Financial review
continued
CVS Group plc
Annual Report and Financial Statements 2026
50
What makes us CVS
Investing in a better future
“We now have the space and facilities to grow and deliver
the level of care we’ve always strived for. It’s been fantastic
to receive positive feedback from clients, and the new
environment has energised the team.”
Broadleaf Vets recently relocated into a purpose-built 7,000 sq. ft. facility in Sheffield, representing a
significant investment in the future of the practice, its team and its clients. The new premises provide
expanded clinical capacity, modern consulting and treatment areas, and purpose-designed spaces
that support efficient workflows and high-quality patient care.
The move has enhanced the overall client experience through improved accessibility and parking,
while creating an environment that supports the practice’s continued growth. Feedback from clients
has been overwhelmingly positive, with many highlighting the modern facilities, welcoming atmosphere
and high standard of equipment. The relocation demonstrates CVS’s commitment to investing in
its practices and creating environments where colleagues, clients and patients can thrive.
Siobhan and Stanley
–
Broadleaf Veterinary Centre, Sheffield
CVS Group plc
Annual Report and Financial Statements 2026
51
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Financial review
continued
Cash flow
2026
£m
2025
£m
Adjusted EBITDA
1
141.5
134.6
Working capital movements
(12.8)
(3.9)
Capital expenditure – maintenance
(11.5)
(10.8)
Repayment of lease liabilities
(17.3)
(16.4)
Adjusted operating cash flow
1
99.9
103.5
Adjusted operating cash conversion
1
(%)
70.6%
76.9%
Taxation paid
(16.1)
(14.7)
Net interest paid
(14.6)
(16.6)
Free cash flow
1
69.2
72.2
Capital expenditure – investment
(24.9)
(22.4)
Business combinations (net of cash
acquired)/other investments
(45.4)
(30.6)
Acquisition fees and contingent
consideration paid
(16.5)
(12.9)
Dividends and share buyback
(38.0)
(5.9)
Other financing activities
(12.8)
(5.9)
Proceeds from and cash movement in
relation to discontinued operations
0.4
42.7
Impact of foreign exchange
(0.2)
(0.6)
Net (outflow)/inflow
(68.2)
36.6
Increase/(decrease) in unamortised
borrowing costs
1.6
(0.9)
(Increase)/decrease in net debt
(66.6)
35.7
1.
APMs are defined and reconciled to the nearest statutory measure
in the APM glossary on pages 176 to 180.
Working capital
Working capital was -£12.8m in the year mainly due to one
-off
impacts in relation to timing of Research and Development
Expenditure Credit (RDEC) receipts and delivery of buying
synergies which resulted in a change to buying relationships.
Despite this, the Group’s adjusted operating cash conversion
remained strong at 70.6% (2025: 76.9%).
Free cash flow
The Group’s free cash flow decreased -4.2% to £69.2m
(2025 continuing operations: £72.2m). This was mainly
impacted by the negative working capital movements.
Free cash flow per share decreased to 97.7p (2025: 100.6p)
with the reduction in free cash flow only partially offset by
the lower average number of shares.
Net bank borrowings
Net bank borrowings increased by £68.2m to £199.6m from
£131.4m. The increase in bank borrowing is mainly attributable to:
• our continued acquisition strategy: during the year we made
six new acquisitions (comprising 14 practice sites) for a
consideration of £45.4m (2025: £30.6m) including the
purchase of a minority interest in the year, and related
acquisition fees and contingent consideration payments
of £16.5m (2025: £12.9m). In Australia, typically 80.0%
of a practice valuation is paid upfront and 20.0% is deferred
and earned over a period of time;
• our investment in technology and practice facilities with
investment capital expenditure during the year amounting to
£24.9m (2025: £22.4m);
• our decision to undertake two share buyback programmes
one announced in October 2025 and completed in January
2026 for £20.0m and the second announced in May 2026 for
£50.0m of which £11.7m has completed at the balance sheet
date, and remains ongoing; and
•
other financing activities of £12.8m (2025: £5.9m) which
included cost related to the extension of our loan facility; and
exceptional costs of £10.6m (2025: £6.0m) in relation to the
Main Market move and continued costs in relation to the CMA
investigation.
Net debt
2026
£m
2025
£m
Borrowings repayable:
Within one year
—
—
After more than one year:
Loan facility
218.0
147.5
Unamortised borrowing costs
(3.9)
(2.3)
Total borrowings
214.1
145.2
Cash and cash equivalents
(18.4)
(16.1)
Net debt
195.7
129.1
Following the successful refinancing in May 2026, the Group’s
loan facility comprises a £125.0m term loan and £225.0m
revolving credit facility. This facility is supported by eight
banks and all facilities run until May 2030, with a one-year
option to extend, on improved terms. The facility has two
key financial covenants:
• net debt to bank test EBITDA of not more than 3.25x; and
• the bank test EBITDA to interest ratio of not less than 3.5x.
Bank test EBITDA is based on the last twelve months’ adjusted
EBITDA performance annualised for the effect of acquisitions
and adding back share option expense, prior to the adoption
of IFRS 16 and excluding the share attributable to non-
controlling interests.
The Group manages its banking arrangements centrally. Funds
are swept daily from its various bank accounts into central bank
accounts to optimise the Group’s net interest payable position.
Interest rate risk is also managed centrally and derivative
instruments are used to mitigate this risk. On 31 January 2024,
the Group entered into two four-year fixed interest rate swap
arrangements to hedge fluctuations in interest rates on £100.0m
of its loan facility, which end on February 2028.
As at 30 June 2026, leverage was 1.63x (2025: 1.18x) and
interest cover was 13.10x (2025: 9.73x).
Goodwill and intangibles
The Group’s goodwill and intangible assets of £385.0m
(2025: £337.6m) arise mainly from acquisitions. Each year,
the Board reviews goodwill for impairment, and as at 30 June
2026 the Board believes there are no material impairments.
The intangible assets arising from business combinations
for customer relationships are amortised over an
appropriate period.
CVS Group plc
Annual Report and Financial Statements 2026
52
Share price performance
At the year end, the Company’s market capitalisation was
£0.8bn (1,173p per share), compared to £0.9bn (1,250p per
share) at the previous year end. The Board believes the share
price remains undervalued. We are pleased that we made
the move to the Main Market and confident we will benefit,
particularly as wider macro-economic and political factors
weighing on the market dissipate. The Company is currently
undertaking a share buyback programme.
Key contractual arrangements
The Directors consider that the Group has only three significant
third-party supplier contracts, two of which are for the supply
of veterinary medicines and one for pet crematoria services.
In the event that these suppliers ceased trading, the Group
would be able to continue in business without significant
disruption in trading by purchasing from alternative suppliers.
Forward-looking statements
Certain statements and arrangements described in the Annual
Report and results release may be considered forward looking.
Although the Board is comfortable that the expectations
reflected in these forward-looking statements are reasonable,
it can give no assurance that these expectations will be proven
to be correct. As these statements may involve risks and
uncertainties, the actual results may differ materially from those
expressed or implied by these forward-looking statements.
CVS Group plc
Annual Report and Financial Statements 2026
53
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Divisional highlights
2026
£m
2025
£m
Change
%
Revenue
Veterinary Practices
648.2
616.1
+5.2%
Laboratories
35.0
31.4
+11.5%
Online retail business
51.0
45.9
+11.1%
Central admin
(21.4)
(20.2)
+5.9%
Total Group revenue
712.8
673.2
+5.9%
2026
£m
2025
£m
Change
%
Adjusted EBITDA
Veterinary Practices
138.7
133.0
+4.3%
Laboratories
11.3
9.0
+25.6%
Online retail business
1.4
1.3
+7.7%
Central admin
(9.9)
(8.7) +13.8%
Total Group adjusted EBITDA
141.5
134.6
+5.1%
Veterinary Practices division
88.3%
of Group revenue
1
The Group’s Companion Animal
division across the UK and Australia
forms the majority of its Veterinary
Practices division.
The focus of the Companion Animal
division is to give the best possible,
care to as many animals as possible
and both the UK and Australian markets
are anticipated to grow over time as the
COVID-19 cohort of pets age and require
more veterinary intervention. CVS
continues to focus on improving the
client journey and experience. Since the
year end, the Group was pleased to have
launched Healthy Pet Club Advanced
and a new online sign up journey.
The division also includes Referrals,
Equine, Farm, Vet Direct, Buying groups
and MiPet Products.
Laboratories
4.8%
of Group revenue
1
CVS’s Laboratories division provides
diagnostic services and in-practice
desktop analysers to both CVS and
third-party practices and employs a
national courier network to facilitate
the collection and timely processing of
samples from practices across the UK.
The Group continues to develop its
capability to ensure it can support the
wider Group focus on growing diagnostic
care and saw strong external case
volume in 2026.
Revenue performance in the year was
strong at +11.5%. The revenue impact
led to adjusted EBITDA being +£2.3m
ahead of prior year. The volume of cases
performed in the year increased 4.3% to
c.442,000 tests, with a positive increase
in volumes from third parties.
Online retail business
6.9%
of Group revenue
1
Our online pet food and retailer, Animed
Direct, focuses on supplying pet food
and prescription and non-prescription
veterinary medicines directly
to customers.
We launched our new website in
February 2025 and have since added a
number of new features including faster
checkout options through Apple Pay and
Google Pay, guest checkout and, more
recently, next day delivery.
Revenue performance improved with
further investment in marketing spend
in the year, with recovery in adjusted
EBITDA in the second half of the year
following price elasticity testing in the
first half.
Financial review
continued
1.
Revenue share for continuing operations including intercompany sales between practices and other divisions.
Robin Alfonso
Chief Financial Officer
24 September 2026
Central admin costs
Increase in central admin costs
mainly driven from an increase
in share-based payments.
CVS Group plc
Annual Report and Financial Statements 2026
54
What makes us CVS
Championing
collaborative care
Felicity and Ronnie
– Ashfield Veterinary Centre, Durham
“We value client input and are thrilled to be
working towards making every visit to our
practice as enjoyable and worthwhile as
possible. Client involvement has also
greatly strengthened the relationship
between our team and our client base.”
CVS collaborative care has been integrated into daily
consultations, enhancing communication and strengthening
client relationships. Practice teams use structured listening
and questioning to develop a deeper and personalised
understanding of each client’s perspective and their pet’s
needs. Communication frameworks and clinical metrology tools
support owner involvement in decision making, personalised
care plans and improved compliance.
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Risk management
Managing risk to
deliver better care
At CVS, we continue to ensure that our risk management
framework remains a key priority being ever mindful of the
changing landscape impacting the Group and its strategic
priorities, underpinning why it remains important to us that
we continue to approach risk with an evolutionary approach.
Our approach allows the business to maintain an appropriate
risk culture supporting our varied business operations whilst
ensuring the business complies with its obligations under the
Corporate Governance Code.
Our risk management framework
The Board has overall responsibility for risk and sets the risk
appetite for the Group. It promotes a transparent and
accountable culture setting the tone for the Executive
Committee and Senior Leadership Group and other senior
management across the Group to promote and cascade this
culture at all levels and with external stakeholders.
It ensures risk is appropriately managed and is accountable for
overseeing the effectiveness of risk management. During the
year the Board conducted a robust assessment of the principal
risks and emerging risks facing the Group, including those that
would threaten its business model, future performance,
solvency or liquidity.
The foundations of our framework are supported by ensuring
core risk management is aligned to the Group’s operating
model, with each head of division being responsible for the
identification, tracking and management of risk. Detailed risk
registers are maintained at divisional level and reviewed at least
twice a year to ensure risks are appropriately identified,
recorded and managed; not all divisional risks are material to
the Group but our framework ensures risk is managed at all
levels. We use this opportunity to assess the controls that are
in place to evaluate the extent to which they mitigate risk and
ensure those controls bring risks in line with our risk appetite.
Where required, we proactively enhance our controls to reduce
the risk further.
We recognise that some risks require further focus and we
have dedicated committees in place to effectively manage
those areas, including Health and Safety and Cyber Security
and Data Protection Governance Risk Committees.
Our top-down, bottom-up governance approach to support
our risk management is outlined below. Our approach is subject
to review by divisional leaders, with Group risks then being
discussed by our Senior Leadership Group and Executive
Committee as part of our interim and year-end reporting
activities. Group risks are presented and discussed at each
Audit and Risk Committee meeting for review, discussion,
input and agreement. With the Board having overall
responsibility having opportunity to discuss and ensure
this reflects their top-down view of risks.
Each division identifies the risks associated with its divisional
area, which will also includes discussions and considerations for
emerging risks. We also use risk categories to drive consistency:
A)
Strategic – risks which are both internal and external,
associated with impacting the Group’s strategy and
long-term objectives.
B)
Operational – those risks derived from the Group’s core
operations, which rely on systems, people expertise,
equipment and processes.
C)
Financial compliance – risks associated with the Group’s
ability to raise and maintain access to capital, and to deliver
profitable growth.
D)
Regulatory compliance – those risks associated with
compliance with laws and regulations and anticipated
changes which impact the Group.
1. Identify
We identify, assess and prioritise our business and principal risks
using our defined risk assessment criteria. Risk ratings are used
to prioritise our risks and are a product of the expected impact
and the likelihood of that impact to occur as a result of an event.
The scoring output is then used to escalate risks as required and
consolidate those rated highest into the Group register.
2. Assess
Each divisional risk register will contain detailed mitigating
factors and controls in place to help reduce the likelihood and
impact of risks occurring. These are reviewed on at least a
twice annual basis and each risk is allocated an owner who is
responsible for ensuring the controls in place are sufficient to
bring risk in line with our risk appetite levels across the Group.
3. Address
The Group risk register is presented to the Board and Audit
and Risk Committee at least three times annually. Risks are
considered independently and alongside emerging risks. The
Audit and Risk Committee supports effective risk management
through focused deep dives including internal audit reviews to
understand the potential impact on the Group and the actions
required to mitigate those risks. Principal risk and uncertainties
are submitted to the Audit and Risk Committee
(ARC) before
being submitted to the Board for approval.
4. Report
Risk management process
Our risk management process is broken down into four
simple steps:
CVS Group plc
Annual Report and Financial Statements 2026
56
Our risk governance
Three lines of defence
First line
Our divisional leads in our operational and support functions
ensure they provide oversight and manage risk at each
operational level, ensuring our internal controls risk
management framework is supported and adhered to
at the operational levels of the business.
Second line
Our Senior Leadership Group helps support our first line of
defence and ensures we monitor the internal controls we have in
place and ensures our risk management framework is regularly
reviewed and processes are implemented and improved.
Third line
We have an external third-party internal auditor who provide
independence and objective assurance over the adequacy
of risk management using a risk-based approach to the
internal audit plan and have a direct line to the Audit and
Risk Committee.
Risk appetite
The Board recognises that the successful delivery of the Group’s
strategy requires the effective management of risk and the
acceptance of an appropriate level of risk to ensure long-term
sustainable growth and shareholder value. The Group is willing to
take informed, measured and controlled risks where these support
the strategic objectives of the Group, whilst maintaining a low
tolerance for risks that could adversely affect the safety of our
people, compliance obligations, financial resilience or reputation.
The Board reviews the Risk Appetite Framework annually
and monitors key risk changes throughout the year to ensure
that risk exposures remain within approved tolerance levels.
The Group has no appetite for major risks which cannot be
effectively mitigated through traditional control activities.
Appetite levels do not eliminate risk but provide a framework
within which management can make informed decisions and
allocate capital and resources effectively.
Low – the Group accepts only limited exposure. Strong controls,
monitoring and assurance activities are maintained, and risks
are generally accepted only where required to support normal
business operations.
Medium – the Group is willing to accept a measured level of risk
where there is a clear business rationale and the risk is well
understood, managed and monitored within approved limits.
High – the Group is willing to accept significant levels of risk
to meet a strategic objective, innovation, growth or competitive
advantage, provided the potential rewards justify the exposure
and risks remain within Board-approved boundaries.
Board
• Overall responsibility for risk management
• Sets risk appetite
First line
of defence
Second line
of defence
Third line of defence – internal audit
Audit and Risk Committee
• Sets the internal audit programme
• Receives updates from the Executive Committee and the Senior
Leadership Group
• Monitors effective controls and audit recommendations
Executive Committee
• Ensures risk management is embedded across the Group at all levels
• Reviews risk profile and twice annual risk assessment
Senior Leadership Group
• Ensures principal risks are understood and effectively followed
• Highlights and monitors significant risks
Operational/support function
• Proactive risk management at each functional level
Top down
Bottom up
Escalation
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Risk management
continued
Our risk heat map
Provision 29
Whilst Provision 29 does not apply to our reporting until 30 June
2027, during the year the Board continued to enhance its approach
to risk management and internal controls in preparation for the
revised requirements of the UK Corporate Governance Code.
The Audit and Risk Committee is overseeing a roadmap to
finalise the Group’s material controls across financial, reporting,
operational, compliance and technology risk areas.
As part of this programme, management will be reviewing the
current framework of the design and operation of key controls,
and where appropriate will enhance the risk and control
documentation, and established framework for the ongoing
monitoring and testing of material controls.
During 2027, the Board will review progress against the roadmap
ensuring it is satisfied that appropriate actions are underway
to strengthen governance, reporting and assurance processes.
The Board intends to align its reporting with the revised
Provision 29 requirements and, following further testing and
embedding of the framework, expects to provide a formal
declaration on the effectiveness of the Group’s material
controls in its 30 June 2027 Annual Report.
Emerging risks
We define emerging risks as those that can potentially have a
significant impact on the Group, where the full extent of the
scale, impact or likelihood may not be fully understood but
needs to be tracked. Identification and review of emerging risks
follow our risk management structure described and are kept
under regular review throughout the year.
Emerging risk
How we are preparing
AI and disruptive
technology
AI can be seen as both an opportunity and a risk. With regulatory uncertainty, potential for data privacy
breaches, inaccurate outputs and the possibility of reputational impacts from inappropriate use.
Ensuring we adopt AI capabilities at the right time is key to ensure we keep pace with our customer
requirements and the competitive landscape to ensure our market position is maintained and that we achieve
our strategic objectives.
We are carefully reviewing opportunities for the use of AI in our practices and across the wider Group with a
number of trials in progress. We are enhancing our AI governance framework which is overseen by our Cyber
Security and Data Protection Governance Risk Committee, ensuring we implement policies and governance
over the use of AI.
Low
High
Impact
Low
High
Likelihood
1.
Geopolitical
2.
Competition and
consumer demand
3.
Adverse publicity and
corporate reputation
4.
Information technology
and cyber
5.
Legal and regulatory change
6.
Sourcing of
pharmaceutical supplies
7.
Epidemiology and pandemic
8.
Sustainability
4
5
6
7
8
1
2
3
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Annual Report and Financial Statements 2026
58
No change to risk
Increasing risk
Reducing risk
N
New risk
L
Low
M
Medium
H
High
Key:
Owner:
Chief Executive Officer
Risk type:
Strategic/operational
Risk profile:
M
Risk appetite:
M
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
Our operations in the UK and Australian markets are subject to
macro geopolitical and external factors which may impact our
performance through global inflationary pressures, supply chain
pressures, energy supply, interest and exchange rate fluctuations or
customer demand, adversely impacting our financial performance.
Context
We continue to operate in an uncertain environment with the
ongoing cost of living pressures on consumers potentially impacting
their decision on how they use their disposable income.
The potential impact of future geopolitical issues, such as:
cross-border policy changes; the potential introduction of tariffs;
and ongoing and potential future international conflicts, could
impact supply chain demands, pricing of consumables such as
gas and electricity and interest rates.
Mitigations
• We have a diverse range and provision of services across the
Group to a wide range of animals in the UK and Australia, including
our Healthy Pet Club (HPC) and newly launched HPC Advanced
preventative healthcare scheme which provide options to our
customers to spread the costs of healthcare for their animals.
• Our online retail business protects the Group against changes
in consumer spending habits.
• We monitor financial performance closely with regular
reforecasts and undertake scenario planning in the event of
an economic downturn, where we have a well-mapped out
contingency plan to reduce operating costs, including
non-essential capital expenditure.
• We closely monitor interest and currency rates and have
appropriate hedging instruments in place in line with our
treasury policy to mitigate the risk of rising interest rates.
• We ensure we source supplies from a number of manufacturers
by maintaining strong relationships with our suppliers and
manufacturers.
• We currently have fixed priced energy contracts, protecting us
from fluctuating markets.
Our principal risks
Our principal risks are deemed by the Board to be the most
significant risks faced by the Group, including those which
can materially impact our performance and/or reputation
and threaten the longer-term business model of the Group.
The Board is responsible for overseeing the Group’s risk
management framework and system of internal controls and
for monitoring their effectiveness. Throughout the year, the
Board and Audit and Risk Committee reviewed the design and
operation of the Group’s risk management processes and key
controls through regular reporting from management and
conducted a separate risk exercise. This is in addition to
consideration of internal and external audit findings and
management actions.
The Board assessed the effectiveness of the Group’s risk
management framework and internal control environment by
considering the Group’s risk profile, the outcomes of risk and
control monitoring activities and the status of remediation
plans performed during the year. The Board also reviewed the
adequacy of processes for identifying, assessing and managing
emerging risks.
Based on this review and following the risk exercise, the Board
has agreed some changes in the risks disclosed this year are
appropriate with the following risks now removed:
• Key employees – no longer considered a principal risk.
• Bank facilities – new facilities mean further assurance
provided and no longer considered a principal risk.
• CMA – investigation concluding with all remedies disclosed
and therefore no longer considered a principal risk.
1. Geopolitical
Read more on our strategy
on
pages 16 and 17
CVS Group plc
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Risk management
continued
Our principal risks
continued
No change to risk
Increasing risk
Reducing risk
N
New risk
L
Low
M
Medium
H
High
Key:
Owner:
Chief Executive Officer
Risk type:
Strategic/
operational/financial
Risk profile:
M
Risk appetite:
M
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
Our ability to grow depends on our ability to deliver on our purpose
of providing the best possible care to as many animals as possible
through the delivery of high-quality service and our customers
valuing the services we provide.
We focus on remaining competitive in the market and understanding
consumer demand which could adversely impact the financial
performance of the Group. This also extends to our approach to our
M&A strategy ensuring we attract the high-quality practices which
complement our Group and the services we provide.
Context
The Group operates in a competitive market and faces increased
competition from not only other corporates but also independent
practices, where there are limited barriers to entry; this competition
also extends to the Laboratories division, where third-party practices
may choose to use other laboratory services, and also online retail
business where customers shop around more frequently.
We need to ensure we remain competitive in a changing landscape
whilst delivering on our strategy. Ensuring we keep pace with our
customers’ needs across all our divisions is key, as well as offering
better ways to enhance our services whilst delivering excellent
customer care.
Our ability to attract the high-quality practices to further grow
through acquisition is paramount to our strategy. Failure to ensure
we remain competitive and attract the right practices could
significantly impact our financial growth ability.
Mitigations
• We offer a wide range of services to our clients giving our
customers the support they need to nearly all aspects of their
pets’ lives, including our Healthy Pet Club (HPC) and newly
launched HPC Advanced preventative healthcare scheme which
provide options to our customers to spread the costs of
healthcare for their animals.
• We regularly review pricing of products and services to ensure we
remain competitive, with many seasonal promotional offerings.
• We track our client Net Promoter Scores and we listen and react
to what our clients want.
• We are currently recruiting for the role of Chief Client Officer to
help drive customer strategy and revenue growth via customer
engagement and satisfaction.
• We remain committed to continuous investment to maintain
high-class facilities and equipment in our practices to provide our
employees with the ability to deliver excellent clinical service.
• We carefully assess each acquisition opportunity against
measured and clear target criteria, to ensure we are adding
high-quality practices to our service offering.
2. Competition and
consumer demand
Owner:
Chief Veterinary Officer
Risk type:
Strategic/financial
Risk profile:
M
Risk appetite:
M
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
Adverse publicity, particularly following the introduction of our
jointly branded practices, could impact our ability to maintain
our trust with our customers, colleagues and other stakeholders.
Failure to maintain this reputation and trust of providing the very
best clinical care could lead to both a financial impact and difficulty
in our ability to attract and retain the best veterinary talent in the
profession, both of which are pivotal to the success of our business.
Context
The Group operates in a professional environment where vets and
nurses are dedicated to delivering high-quality care. In response to
CMA Market Investigation transparency requirements, we adopted
joint branding to ensure customers understand they are part of a
larger veterinary group. Trust and reputation are central to our
success, and adverse publicity could harm our colleagues, customer
confidence, and our standing as a high-quality service provider.
Mitigations
• We continue to monitor and adapt our clinical standards against
our quality improvement frameworks for clinicians and practices,
including our Clinical Governance Framework.
• We have an established Clinical Advisory Committee to advise on
clinical standards and participate in the RCVS Practice Standards
Scheme (PSS), ensuring our practices are upheld to the highest
standards and that the medicines we use go through a robust
framework and clinical process.
• We track our client Net Promoter Scores and have an established
complaints process in place to ensure we listen to our customers’
feedback and resolve issues in a timely manner.
• We aim to maintain prominent representation on national
bodies and at industry events to enhance the Group’s reputation
and credibility.
• We have a dedicated Communications Director which allows
us to respond swiftly to any issues, not only publicly but also
for our colleagues, supported by our financial PR agency.
• We are in the process of making changes to fully adhere
to the CMA remedies.
3. Adverse publicity and
corporate reputation
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60
No change to risk
Increasing risk
Reducing risk
N
New risk
L
Low
M
Medium
H
High
Key:
Owner:
Chief Financial Officer
Risk type:
Strategic/operational/
financial/regulatory
Risk profile:
H
Risk appetite:
L
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
The risk that a poor IT infrastructure could lead to loss of business
critical systems impacting our operational effectiveness. Failure to
maintain our IT systems may also lead to a cyber event, significantly
impacting our ability to not only operate but also remain compliant
with data protection and avoid misuse or penetration of our IT
systems, technology or data.
Context
The Group is committed to ensuring the IT infrastructure in which
it operates is subject to continuous enhancement and investment
where required to help prevent any impact on our day-to-day
operations as these system are vital to the successful trading of the
Group. This includes but is not limited to ensuring our PMS, phone
lines, websites and communication channels remain open to ensure
we have a stable environment in which our colleagues can operate
and offer our services to our customers.
The threat of a cyber incident is an ongoing risk, one which is
constantly evolving and could lead to an inability to use operating
systems, loss of data and disruption to our ability to provide a
high-quality service to our customers. This would not only impact
our brand and reputation but also our profitability and compliance
obligations, leading to potential fines.
Mitigations
• The Group has an embedded IT Framework in place including
security and access controls, policies and procedures, aimed at
ensuring the stability and security of its networks and systems.
• We have a Cyber Security and Data Protection Governance Risk
Committee in place to ensure appropriate governance is in place.
• Regular updates are provided to the Executive Committee and the
Board from our Director of Technology.
• We have business continuity plans in place across key operations
and these are tested periodically.
• Cyber threat training is in place for all our colleagues helping
ensure they understand the possible ways a cyber event could
take place.
• Network security is regularly enhanced with external reviews
being performed periodically to identify areas of risk through
penetration testing. A scheduled programme of equipment and
software replacement takes place to help ensure that the latest
security features are available.
Owner:
Chief Executive Officer
Risk type:
Operational/
strategic/financial/regulatory
Risk profile:
M
Risk appetite:
L
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
The risk that failure to comply with laws or regulations could lead
to reputational damage, financial penalties or financial loss.
Context
The Group is subject to a number of laws and regulations, including
but not limited to the Corporate Governance Code, RCVS Code of
Professional Conduct, HMRC guidelines for national minimum and
national living wage, IR35, data protection and anti-slavery acts,
and health and safety and competition laws and regulations. Failure
to ensure comply with these laws and regulations could lead to
financial consequences, reputational damage and other
consequences for our business and its Directors.
In addition, the Group needs to be able to respond to changing
legislation including but not limited to changes to the Veterinary
Surgeons Act proposed reforms and the CMA remedies.
Should the Group fail to adhere to any law or regulation or adapt
to new legislation in the industry in which it operates it could be
subject to material consequences either through operational
impacts, damaged reputation or financial penalties.
Mitigations
• We have appropriate policies and procedures in place to monitor
compliance and any developments or proposed changes. Our
policies are reviewed and updated regularly and include topics
such as whistleblowing and modern slavery as well as clinical
guidance included within our Clinical Governance Framework
led by our Chief Veterinary Officer (CVO).
• We maintain regular engagement with regulatory and legislative
bodies where appropriate to promote best practice and lobby
for change where considered appropriate.
• Our CVO on the Board oversees all clinical quality improvement
work to help enhance the care we provide to animals, ensuring
we remain compliant with industry regulations.
• We ensure we have robust health and safety procedures in
place to ensure we are fully compliant with health and safety
legislation, including mandatory training for all colleagues
to ensure they know how to perform their duties safely.
•
We participate in the RCVS Practice Standards Scheme to ensure
the Group promotes the highest levels of clinical standards.
• We engage suitable in-house and third-party experts to
support compliance.
• All of our vets and nurses have an annual continued professional
development allowance and our LED platform helps provide
them with the resources they need to stay up to date in a
changing landscape.
4. Information technology
and cyber
5. Legal and
regulatory change
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Risk management
continued
Our principal risks
continued
No change to risk
Increasing risk
Reducing risk
N
New risk
L
Low
M
Medium
H
High
Key:
Owner:
Chief Financial Officer
Risk type:
Operational/strategic
/financial
Risk profile:
M
Risk appetite:
M
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
The Group is dependent on the continuous supply of products from
a number of sources. The risk of not securing our supply chain
enabling us to source quality products at the right price in order to
provide treatments to our clients and their pets could potentially
lead to an adverse financial impact on Group performance.
Context
The Group maintains key relationships with the veterinary
wholesalers to ensure the continued supply and quality of product
required to provide our clients with the high-quality service they
expect to receive. Failure to source quality pharmaceutical supplies
could lead to an inability to provide a service to our clients and
could also lead to adverse financial performance which can also
impact our reputation.
Mitigations
• We ensure we have supply agreements in place with multiple
major wholesalers and manufacturers to ensure access to
appropriate supplies including holding stock.
• We ensure we conduct regular pricing reviews with all major
suppliers across all divisions for best possible pricing.
• We work closely with our Clinical Advisory Committee to ensure
we are sourcing the best-quality products for our clients and
their pets.
• Our procurement policy stipulates that we work with
accredited suppliers.
6. Sourcing of
pharmaceutical supplies
Owner:
Chief Veterinary Officer
Risk type:
Operational/strategic/
financial/regulatory
Risk profile:
L
Risk appetite:
L
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
The risk that future diseases may enter the UK or Australia leading
to animal deaths, which may include mass culling leading to a
decline in the pet population.
There is also the risk a future pandemic may lead to future
lockdowns, impacting the level of service we can offer and affecting
our revenue generation.
Context
The Group is mindful that operating in a sector which works closely
with animals it opens up the possibility of colleagues and animals
being impacted by epidemics. These may occur through diseases
entering the UK and Australia due to importation of animals, and
present risks of diseases transferring to humans, leading to
operational disruption.
Mitigations
• The Group continues to invest in research and development
and closely monitors trends and concerns through its
well-established Clinical Advisory Committee.
• We ensure our colleagues have access to PPE to focus on
increased protection if suspected cases are identified. Our
notification system aids tracking and resolution of issues arising,
with issues reported to the Board on a regular basis.
• We are prioritising research related to antimicrobial stewardship,
to support responsible antibiotic prescribing or infection control,
as well as supporting research projects within CVS in line with
our antimicrobial stewardship priorities.
• We collaborate with the University of Liverpool to support the
monitoring of infectious disease trends through surveillance
generated from our companion animal practices, farm and
equine practices and laboratories.
7. Epidemiology
and pandemic
CVS Group plc
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62
No change to risk
Increasing risk
Reducing risk
N
New risk
L
Low
M
Medium
H
High
Key:
Owner:
Chief Executive Officer
Risk type:
Operational/
strategic/financial
Risk profile:
L
Risk appetite:
M
Link to strategy:
Read more on our strategy
on
pages 16 and 17
Description
The risk that the Group fails to deliver on its ESG strategy “Care at
our Heart”. Not focusing on the long-term goals of our ESG strategy,
or failing to ensure we remain mindful of the effects and impacts of
climate change including extreme weather such as flooding and
heatwaves and how this impacts the Group both operationally
and financially.
Context
The Group ensures that sustainability and climate change remain
a key focus and our ESG strategy “Care at our Heart” continues
to focus on ESG through our working groups.
Failure to act responsibly could negatively impact our reputation
and result in financial loss.
Mitigations
• We are committed to discussing sustainability and ESG at every
Board meeting and it is a regular agenda item. Our ESG strategy
“Care at our Heart” is underpinned by four pillars: Care for the
Planet, Care for our People, Care for our Clients and their
Animals, and Care for our Communities.
• We monitor weather related risks including those affecting key
locations and the critical supply of products. We also ensure our
infrastructure can support remote working capabilities and
emergency response procedures.
• Our capital investment programme ensures it considers
climate-related risks during assessment and planning processes.
• We publish an annual Sustainability Report with SASB-compliant
data and report in line with the TCFD recommendations.
• Where possible our vehicles are electric vehicles, we use energy
from renewables sources and have smart meters in place to
accurately track energy usage.
• Our Executive Committee bonuses include non-financial targets
linked to our sustainability strategy.
8. Sustainability
The Strategic Report is approved for issue by the Board of Directors.
Scott Morrison
Company Secretary
24 September 2026
What makes us CVS
“We have a continual focus
on understanding new
threats with an aim of
minimising the risk and
impact of a potential
cyber attack.”
Steve Shreeves
Technology Director
Cyber attacks continue to be a risk for all businesses
and, as cyber threats continue to evolve, protecting
sensitive information remains a key priority. Throughout
the year, we strengthened our cyber resilience through
colleague training and security awareness campaigns,
helping to safeguard our systems and data, reduce risk
and ensure the secure delivery of services.
We continue to invest in security controls and
recovery capabilities, supported by oversight from our
Cyber Security and Data Protection Governance Risk
Committee. Together, these measures help ensure we
remain a trusted partner, providing our clients with
confidence that their information is protected.
Protecting data,
strengthening
trust
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Corporate
Governance
66 Governance at a glance
68
Chair’s introduction to governance
70
Board of Directors and Company Secretary
72
Corporate governance statement
79
Section 172(1) statement and stakeholder engagement
83
Audit and Risk Committee report
88
Nomination Committee report
93
Remuneration Committee report – unaudited
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64
What makes us CVS
Emma and Trixie
– West Mount Vets, Halifax
“Prescribing with Purpose has encouraged us to
make informed and responsible decisions that
benefit both our patients and the environment.
It’s empowering to know that small changes in
practice can make such a meaningful difference.”
Over the past year, our teams have embraced a more thoughtful and sustainable approach
to prescribing through our “Prescribing with Purpose” initiative. We have focused on reducing
anaesthetic gas usage by optimising protocols and equipment checks, alongside strengthening
antimicrobial stewardship through regular case reviews and adherence to prescribing guidelines.
A more personalised approach to parasite prevention has also been introduced, with lifestyle
and risk assessments guiding tailored recommendations for each patient.
These changes have helped reduce environmental impact while continuing to deliver high-quality
patient care. Just as importantly, the initiative has encouraged collaboration, discussion and
reflection among teams, supporting informed clinical decision making and helping ensure the
best outcomes for patients.
Taking our
responsibilities seriously
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Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Strong governance
supporting our purpose
Board diversity, skills and experience are key strengths
that support robust governance and effective oversight. The
breadth of perspectives and expertise across the Board helps
ensure effective decision making, strong accountability and
the successful delivery of our strategy over the long term.
Effective governance is fundamental to how CVS operates.
Through a clear governance framework, the Board and its
Committees oversee strategic priorities, risk management,
succession planning and stakeholder interests, while promoting
high standards of conduct throughout the Group. The following
pages provide an overview of Board composition, tenure, skills
and meeting attendance during the year.
Board tenure
Board diversity
Gender
Ethnicity
2025/26
Male
56%
Female
44%
2024/25
Male
71%
Female
29%
2025/26
White
89%
Ethnic minority
11%
2024/25
White
86%
Ethnic minority
14%
Executive Committee diversity
Gender
Ethnicity
2025/26
Male
75%
Female
25%
2024/25
Male
60%
Female
40%
2025/26
White
75%
Ethnic minority
25%
2024/25
White
80%
Ethnic minority
20%
Richard Fairman
7 years 11 months
Robin Alfonso
6 years 7 months
Paul Higgs
2 years 0 months
David Wilton
4 years 9 months
Laura Hagan
0 years 2 months
Helen Keays
0 years 3 months
Joanne Shaw
3 years 0 months
Jane Bednall
0 years 3 months
Richard Gray
6 years 0 months
Governance at a glance
CVS Group plc
Annual Report and Financial Statements 2026
66
Essential skills and experience
Meeting attendance
Link to
strategy
Richard
Fairman
Robin
Alfonso
Paul
Higgs
David
Wilton
Laura
Hagan
Helen
Keays
Joanne
Shaw
Jane
Bednall
Richard
Gray
Corporate strategy
People and culture leadership
Brand and customer
Innovation and
proposition development
Operational expertise
Clinical/healthcare
E-commerce, sales and marketing
Cyber, digital, AI and technology
Risk management
Financial planning and reporting
Governance and legal
Stock market/investor relations
Mergers and acquisitions and
private equity
Sustainability and ESG
Board**
Audit and Risk
Committee
Nomination
Committee
Remuneration
Committee
Number of meetings
11
4
4
3
David Wilton
11
4*
4
3
Deborah Kemp (resigned 30 June 2026)
11
4
4
3
Richard Gray
11
4
4
3
Joanne Shaw
11
4
4
3
Helen Keays (appointed 1 April 2026)
2
1
1
1
Jane Bednall (appointed 1 April 2026)
2
1
1
1
Laura Hagan (appointed 1 May 2026)
1
1
0
1
Richard Fairman
11
4*
4*
2*
Robin Alfonso
11
3*
4*
2*
Paul Higgs
11
3*
4*
2*
*
In attendance by invitation of the respective Committee.
** There were eight scheduled Board meetings, with additional meetings held due to the Main Market move.
CVS Group plc
Annual Report and Financial Statements 2026
67
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Chair’s introduction to governance
“The Board recognises the
importance of having a balance of
skills, including clinical experience
and diversity, to ensure decisions
have been rigorously tested and
to hold management to account.”
David Wilton
Chair
Supporting our
purpose through
good governance
Remuneration Committee and Laura is now both the Senior
Independent Director and Employee Engagement Director. We
monitor the composition of the Board in order to ensure that we
have the right balance of skills and experience.
Board effectiveness
Our annual Board performance review provides the Board,
its Committees and individual Directors with an opportunity
to consider and reflect on the quality and effectiveness of
its decision making and performance. This year’s external
performance review, conducted by Gould Consulting with
support from the Chair and Company Secretary, concluded
that the Board continues to operate effectively. Further details
are available on page 92.
Equity, Diversity and Inclusion
Our vision is to be the veterinary company people most want
to work for – regardless of who they are, how they identify or
their background. Our colleagues tell us that feeling included
and able to be yourself is vital to feeling engaged and therefore
we continue to foster an inclusive and equitable workplace
environment alongside cultivating a “just culture”, with fairness,
openness and learning, by helping people feel confident to speak
up when things go wrong, rather than fearing blame. More details
on our people and culture are set out on pages 28 to 31 alongside
our approach to Equity, Diversity and Inclusion on page 90.
Section 172 and stakeholder engagement
The Board used its collective expertise to exercise its judgement
on numerous occasions during the year to ensure equitable
treatment for the Group’s stakeholders.
Key engagement activities this year have included engagement
with shareholders in relation to our move from the Alternative
Investment Market of the London Stock Exchange to the Main
Market and subsequent to this proposed changes to our
Remuneration Policy, which you can read about further on
pages 97 to 102. Engagement has also focused on capital
allocation and the completed share buyback of £20.0m in
January 2026 and the £50.0m share buyback announced
in May 2026 which remains ongoing.
Further details on how we have engaged with our stakeholders
can be found on pages 79 to 82.
Sustainability
We take our ESG responsibilities seriously and this remains a
key area of focus for stakeholders who want to work for, be a
client of or invest in companies who do business responsibly.
Introduction
On behalf of the Board, I am pleased to introduce our Corporate
Governance Report for the year ended 30 June 2026. This
report sets out our approach to effective corporate governance
and explains the key features of the Group’s governance
structure. Effective corporate governance forms the
foundations of a well-managed organisation, and the external
governance environment, encompassing guidelines and
regulations, is subject to continuous evolution. CVS remains
committed to prioritising actions that promote the Company’s
success, consistently seeking to achieve this through its
governance framework in an appropriate manner.
Board changes
Ensuring we have the right balance of diversity, skills and
experience on the Board was a focus in the year. I am pleased
to have welcomed Helen Keays, Jane Bednall and Laura Hagan
to the Board as independent Non-Executive Directors. These
appointments to the Board bring additional expertise particularly
in direct operating and governance experience across high-
volume, multi-site retail, digital, and consumer environments
and also improve our female representation to 44.0%. Helen,
Jane and Laura received a tailored induction programme on
appointment, including meetings with senior management, site
visits and briefings on strategy, governance, risk, operations
and stakeholder priorities. Read more about our Directors’ skills
on page 67.
We also announced the retirement of Deborah Kemp as an
independent Non-Executive Director with effect from 30 June
2026, after more than eight years on the Board. Following
Deborah’s retirement Helen has taken over as Chair of the
CVS Group plc
Annual Report and Financial Statements 2026
68
The CEO continues to share updates at each scheduled Board
meeting on our activities and progress. We are committed
to reducing our environmental impact, improving lives across
our value chain and growing our business in a way that is
sustainable over the long term.
Our ESG metrics and targets have been reviewed and updated
during the year to reflect that commitment. We are pleased to
share more details on the progress we are making in our 2026
Sustainability Report.
Dividend
The Board is proposing a final dividend of 9.0p per Ordinary
share (2025: 8.5p), subject to shareholder approval. Please see
page 23 for further information.
Annual General Meeting (AGM)
We will hold our 2026 AGM on 25 November 2026 at 11:00 am.
Full details, including the resolutions to be proposed to
shareholders, will be set out in the Notice of AGM, which
will be made available in the Investor Centre on our website.
Outcomes of the resolutions put to the AGM, including poll
results detailing votes for, against and withheld, will be
published on the Company’s website and the London Stock
Exchange once the AGM has concluded.
Continuing governance commitment
Our governance framework, described on page 73, is designed
to be straightforward, without bureaucracy, to support the
delivery of our business objectives. We believe that good
governance provides the framework for stronger long-term
value creation for all our stakeholders. We apply corporate
governance in a way that is relevant and meaningful to our
business and consistent with our culture and values.
This is our first Annual Report reporting against the UK
Corporate Governance Code 2024 (the Code). Provision 29
of the Code will apply to the Group in June 2027 and the Audit
and Risk Committee and Board have spent time overseeing the
programme of work underway to identify, formalise and assess
the effectiveness of the Company’s material internal controls.
You can read more about this in the Audit and Risk Committee
Report on pages 83 to 87.
Our Corporate Governance Code statement of compliance
and supporting disclosures can be found on page 72.
David Wilton
Chair
24 September 2026
Strengthening the Board
During this year we appointed three independent Non-Executive Directors to bring additional
expertise, particularly in people development and leadership and consumer marketing and
improve our female representation to 44.0%.
Helen Keays
“It’s an exciting time to join CVS
as we look to expand and acquire
practices in both the UK and
Australia. I enjoyed meeting the
management team in the recruitment
process and am looking forward
to working with them.”
“I have a strong understanding of
customer behaviour developed
across a variety of multi-site
consumer businesses and retail
organisations and will look to share
that experience with my CVS
colleagues.”
“Specifically as Remuneration
Committee Chair I will ensure that
our remuneration plans incentivise
and reward the right behaviours and
decisions which will drive strong
performance for CVS.”
Jane Bednall
“CVS Group’s move to the Main
Market and the publication of the
CMA’s final decision gave rise to a
brilliant opportunity to join the Board
at a pivotal time in the Company’s
journey. With a strong balance sheet
and cash to support capital allocation
plans, the leadership team, with a
passionate and dedicated workforce,
now has the opportunity to continue
its focus on growing the business
both in the UK and Australia.”
“As part of the Board, I trust that my
experience of growing retail businesses,
customer led transformation and
building commercially successful
brands with colleagues and customers
genuinely at their core, in addition
to leveraging wider Board skills,
can contribute to the next stage
of the journey.”
Laura Hagan
“CVS has many opportunities ahead
– continued expansion and growth
and end to end digitisation linked to
excellent customer experience for
our clients, alongside the values of
integrity, care and professionalism
for the health and treatment of all
of our animals. In addition, leading
the industry in combining clinical
excellence with long-term value
accretion for our shareholders,
employees and all stakeholders.
As you might expect, I am keen
to ensure we have the best talent
throughout the organisation and that
we embody a culture that is attractive
and retentive to this talent, enabling
the Group to grow profitably
alongside clinical innovation; and
great ways of working for all.”
CVS Group plc
Annual Report and Financial Statements 2026
69
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Board of Directors and Company Secretary
Leadership guided
by our purpose and culture
R
N
David Wilton
Chair
Appointed
1
Non-Executive Director:
September 2021
Chair: May 2024
Career and experience
David is a qualified Chartered
Accountant with more than
30 years’ post-qualification
experience as a Chief
Financial Officer, Non-
Executive Director (NED),
Chair and consultant after
many years in corporate
finance, primarily in mid-cap
M&A with Rothschilds. David
has held roles in both public
and private equity backed
companies including as CFO
of Sumo Group plc, Group
Finance Director of WYG plc
and NED and Chair of the
Audit Committee of Sweett
Group plc. David was NED
and subsequently Chair at
Frontier Developments plc
until November 2023.
1. Chair of the Nomination
Committee from 1 April 2026.
Laura Hagan
Senior Independent
Non-Executive Director
and Employee Engagement
Director
Appointed
2
May 2026
Career and experience
Laura has significant
experience in people
leadership, organisation
design optimisation, scaling
technology-led consumer
platforms, international
expansion and the delivery
of customer-driven service
through technology.
Laura has a strong blend of
experience in both FTSE 250
and fast-growing privately
owned companies, and is
presently an Independent
Non-Executive Director and
Chair of the Remuneration
Committee at FeverTree
Drinks plc and was, until
March 2026, Chief People
Officer at Deliveroo plc.
Laura’s earlier executive
roles include Chief People
Officer at Gymshark Ltd,
Chief HR Officer at Tate & Lyle
plc and Group HR Director
at Dyson Ltd.
2. Senior Independent Director
and Employee Engagement
Director from 1 July 2026.
Joanne Shaw
Independent
Non-Executive Director
Appointed
July 2023
Career and experience
Joanne Shaw has significant
healthcare experience from
her current roles as Trustee
and Audit Committee Chair
at Cancer Research UK,
Chair at the Royal College of
Paediatrics and Child Health,
and Deputy Chair at Vitality
UK. She has held a number
of previous Non-Executive
roles over the past 17 years,
including as Non-Executive
Director and Chair of the
Audit and Risk Committee
at NHS England and the
National Audit Office, Chair
of NHS Direct, Non-Executive
Director at Kensington and
Chelsea Primary Care Trust
and Chair of the British
Equestrian Association.
Joanne, a Chartered
Accountant, was a former
Management Consultant at
Boston Consulting Group and
has previous executive roles
at the Medicines Partnership,
the Audit Commission and
Coopers and Lybrand.
A
Audit and Risk Committee
R
Remuneration Committee
N
Nomination Committee
Chair of Committee
Committee membership:
Helen Keays
Independent
Non-Executive Director
Appointed
3
April 2026
Career and experience
Helen Keays brings
substantial board-level
experience in large-scale
multi-site networks. Helen is
an Independent Non-Executive
Director and Chair of the
Remuneration Committee
at Nichols plc following
an executive career in
consumer-facing multi-site
businesses across retail,
mobile telecommunications
and retail financial services.
Helen has worked at
Vodafone plc, latterly
as General Manager of
Singlepoint, and previously
at Sears plc amongst other
roles. Helen has previously
been an Independent
Non-Executive Director
of The Restaurant Group,
Domino’s Pizza UK & Ireland,
Communisis plc, Majestic
Wine plc, Mattioli Woods plc
and Chrysalis Group plc.
3. Chair of the Remuneration
Committee from 1 July 2026.
A
R
N
A
R
N
A
R
N
CVS Group plc
Annual Report and Financial Statements 2026
70
A
R
N
Richard Gray
Independent Non-Executive
Director
Appointed
4
July 2020
Career and experience
Richard is a career investment
banker who has extensive
capital markets, capital
allocation and corporate
finance experience. He is a
Non-Executive Director of
Alpha Real Capital, Vice
Chairman of Invescore Group
and an Advisor to Zeus
Capital. He has previously
worked at Panmure Gordon.
Lazard, Charterhouse
and UBS and was Chairman
of CT Private Equity Trust plc.
4. Chair of the Nomination
Committee until 31 March 2026.
Richard Fairman
Chief Executive Officer
Appointed
Director: August 2018
Chief Financial Officer:
October 2018
Chief Executive Officer:
November 2019
Career and experience
Richard spent six and a half
years at the RAC Group,
including as Chief Financial
Officer. Prior to this, Richard
qualified as a Chartered
Accountant at EY, later
working at PwC, following
which Richard held roles
including Finance Director of
Virgin Money, Chief Financial
Officer of Central Trust and
Finance Director of Virgin
Money Giving.
Robin Alfonso
Chief Financial Officer
Appointed
November 2019
Career and experience
Robin has proven experience
across consumer-facing
FTSE 250 and privately
owned businesses.
Robin spent eight years at the
RAC Group, initially as Group
Financial Controller and then
as Divisional Finance Director
of its largest commercial
division and profit centre,
Consumer Roadside and
Marketing. Prior to this,
Robin qualified as a Chartered
Accountant at PwC, following
which he moved to Aviva
where he performed a
technical accounting role.
Paul Higgs
Chief Veterinary Officer
Appointed
July 2024
Career and experience
Paul is responsible for the clinical stewardship
of all our veterinary practices across our territories.
He joined CVS in 2018 as Clinical Director of
Highcroft Referrals, now Bristol Vet Specialists.
Paul qualified from the University of Cambridge in
2006 and was accredited as an RCVS recognised
and EBVS® European Veterinary Specialist in Small
Animal Internal Medicine in 2014. Paul is also a
Fellow of the Royal College of Veterinary Surgeons
and has previously held the post of Congress Chair
at the British Small Animal Veterinary Association.
Scott Morrison
Company Secretary
Appointed
June 2023
Career and experience
Scott qualified as a solicitor
in 1998, working at Eversheds
for some years before moving
into in-house roles. Initially
at Kwik-Fit as Legal Director,
he later joined Craegmoor
Group Limited (a healthcare
business) as General Counsel
and RAC Group where he had
the role of General Counsel
and Company Secretary.
Jane Bednall
Independent Non-Executive
Director
Appointed
April 2026
Career and experience
Jane has deep expertise
in omni-channel customer
experience, brand, and
customer led transformation
across domestic and global
multi-site businesses
and significant executive
experience in senior
marketing and commercial
roles with FTSE 50 service
businesses, including British
Airways, InterContinental
Hotel Group (IHG), Centrica
and most recently SSE where
she was Chief Marketing
Officer and formerly Managing
Director of Retail Energy.
Jane currently serves as an
Independent Non-Executive
Director of Fuller Smith &
Turner plc and Independent
Non-Executive Director and
Chair of the Remuneration,
People and Culture Committee
for The King’s Cross Group,
appointed on behalf of
Australian Super, Australia’s
largest pension fund. Jane
has previously served as an
Independent Non-Executive
Director of DFS plc, EI Group
plc and Smart Energy GB.
A
R
N
CVS Group plc
Annual Report and Financial Statements 2026
71
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Corporate governance statement
Corporate governance in support
of the Group’s strategy
This Corporate Governance Statement explains how the
Company is managed, the roles of the Board, its Committees
and Directors as well as the Group’s compliance with the standards
set out in the UK Corporate Governance Code 2024 (the Code)
for the financial year ended 30 June 2026. For further information
about the Code set by the Financial Reporting Council (FRC),
please visit the FRC’s website at www.frc.org.uk.
The Company fully complied with the provisions set out in the
Code throughout the financial year to 30 June 2026 and up to
the date of this Annual Report and Accounts with the exception
of Provision 24, with which it complied from 6 October 2025
and Provision 39, as detailed on page 94, with which it now
complies from 1 July 2026. The Corporate Governance Report
explains how the Company has applied the principles and
provisions of the Code, and the guide below outlines where
further information can be found within this report:
Scott Morrison
Company Secretary
Principles
Disclosure in the 2026 report
Board leadership and Company purpose
A, B, C, D and E
Page 1 and pages 70
and 71
Division of responsibilities
F, G, H and I
Pages 73 to 75
Composition, succession and evaluation
J, K and L
Pages 88 to 92
Audit, risk and internal control
M, N and O
Pages 83 to 87
Remuneration
P, Q and R
Pages 93 to 109
Board activity during the financial year to 30 June 2026
Strategy, business and
operational performance
•
Overseeing the move from the Alternative Investment Market to the Main Market of the London
Stock Exchange
•
Overseeing the development of the five-year strategic plan
•
Reviewing and monitoring the Group’s performance against the targets set out in the annual budget
and five-year plan
•
Reviewing and approving major investments in property, facilities, clinical equipment, acquisitions
and strategic divestments
•
Monitoring trading and market conditions, competitor activity and regulatory requirements
Financial performance
•
Receiving Audit and Risk Committee Reports on full and half-year financial results
•
Reviewing and approving the Group’s annual budget
•
Reviewing the Working Capital report as part of the move to the Main Market
•
Reviewing in-year forecasts prepared
•
Reviewing the capital allocation priorities including considering the Company’s dividend policy
and share buybacks and approving the allocation of capital for investment
Risk management
and internal control
•
Review of the Group’s risk register
•
Receiving reports from the Audit and Risk Committee on the effectiveness of internal controls
•
Receiving a report of the Financial Position and Prospect Procedures as part of the move to the
Main Market
•
Receiving a report on the Group’s Provision 29 readiness and roadmap
•
Liaising with KPMG as internal auditor and reviewing internal audit reports from KPMG
•
Receiving regular updates on legal and regulatory matters
Board and Committee
governance
•
Receiving reports from the three Board Committees
•
Reviewing terms of reference for each Board Committee
•
Adopting the schedule of matters reserved to the Board
•
Receiving corporate governance updates
•
Conducting an annual review of Board effectiveness
CVS Group plc
Annual Report and Financial Statements 2026
72
Our governance framework
The Group’s governance framework includes a schedule of matters reserved to the Board and its Committees with clear terms of
reference for each Committee. The Board has a delegated authority policy which ensures that decisions are made at the appropriate
levels within the Group:
Chair
Our Chair leads the Board with objective
judgement and is responsible for
ensuring its overall effectiveness.
Five independent Non-Executive
Directors
Our five independent Non-Executive
Directors provide independent oversight
and constructive challenge to the
Executive Directors and Chair.
Three Executive Directors
Our CEO, CFO and Chief Veterinary
Officer (CVO) are appointed to
the Board.
Executive Committee
The Executive Committee (Exco) comprises the Group CEO, CFO, CVO and Chief People Officer. The Exco assists the CEO
in managing the Group’s day-to-day operations and in the implementation of its strategy. The Exco meets on a weekly basis to
set performance targets, monitor key objectives and commercial plans, monitor risk, and evaluate opportunities and business
initiatives. Exco members report annually to the Board in person as well as providing monthly updates through the CEO, CFO
and CVO Board reports. In FY27 a Chief Client Officer will be appointed to join Exco.
Senior Leadership Group (SLG)
The SLG comprises the heads of major business units and key service functions. The SLG meets on a monthly basis
to collaborate, review Group performance and discuss major plans and developments.
The Board
Board Committees
Audit and Risk Committee
Key responsibilities:
•
reviewing and monitoring
financial reporting;
•
ensuring an appropriate
internal control and risk
management framework;
•
monitoring internal and external
audit arrangements (including
auditor independence); and
•
maintaining appropriate
whistleblowing procedures.
Nomination Committee
Key responsibilities:
•
making recommendations on all
Board appointments and
succession planning;
•
monitoring and reviewing Board
composition; and
•
undertaking an annual evaluation
of the effectiveness of the Board
and its Committees.
Remuneration Committee
Key responsibilities:
•
assisting the Board in ensuring
appropriate remuneration policies
are in place for the Group;
•
ensuring Executive Director
remuneration is aligned to the
strategic priorities of the Group
and its performance; and
•
making recommendations regarding
Executive Share Plan (ESP),
formerly known as Long-Term
Incentive Plan (LTIP), terms and
conditions, and awards.
Membership:
Joanne Shaw – Chair
David Wilton (ceased to be a member
from 6 October 2025)
Deborah Kemp (resigned 30 June 2026)
Richard Gray
Helen Keays (As of 1 April 2026)
Jane Bednall (As of 1 April 2026)
Laura Hagan (As of 1 May 2026)
Membership:
David Wilton – Chair (Chair from
1 April 2026)
Richard Gray (Chair to
31 March 2026)
Deborah Kemp (resigned 30 June 2026)
Joanne Shaw
Helen Keays (As of 1 April 2026)
Jane Bednall (As of 1 April 2026)
Laura Hagan (As of 1 May 2026)
Membership:
Helen Keays (Chair from 1 July 2026
and a member as of 1 April 2026)
Deborah Kemp – Chair (until
30 June 2026)
David Wilton
Richard Gray
Joanne Shaw
Jane Bednall (As of 1 April 2026)
Laura Hagan (As of 1 May 2026)
Read more at
https://www.cvsukltd.co.uk/
investor-centre/corporate-governance/
CVS Group plc
Annual Report and Financial Statements 2026
73
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Corporate governance statement
continued
Key elements of our culture
Element
Overview
Board and Committee oversight
Leading
by example
The Board recognises that establishing and maintaining
a strong corporate culture begins with its own conduct
and behaviour.
Directors and senior management sought to lead
by example; demonstrating the Company’s values
in their decision making, interactions with
stakeholders and oversight of strategic priorities.
The Board sets the Company’s purpose, values
and strategy as shown on page 1 and ensures
behaviours throughout the organisation support
the Company’s long-term objectives.
Performance
metrics
The Board reviews a broad range of non-financial KPIs
that support CVS’s culture, through strong colleague
development and succession planning, along with a
focus on benefits and rewards that incentivise our people
to excel.
The Board receives regular reports addressing
a wide range of non-financial considerations,
including colleague NPS, to assist in its function
of overseeing and monitoring our culture. See
page 31 on how the Board promotes and embeds
culture throughout the organisation.
Employee
voice
We are committed to an inclusive culture where everyone
can contribute and colleague wellbeing is a priority. Our
“What Matters to You” framework supports wellbeing,
while our annual conference provides opportunities for
colleagues across the Group to connect and engage.
We monitor colleague engagement through a monthly
employee Net Promoter Score and maintain robust
whistleblowing arrangements, including an independent
third-party reporting system implemented in
September 2025.
Results from ongoing colleague engagement
are reported at the regular Board meetings.
Non-Executive Directors attend the annual
leadership conference and also regularly meet
with colleagues to discuss key issues. Any
whistleblowing reports are reviewed by the Board.
In 2027, the Employee Engagement Director will
continue to engage with colleagues through practice
visits and at our annual leadership conference and is
planning a series of employee listening groups.
Policies, pay,
diversity and
inclusion
We offer competitive financial and non-financial rewards
and are committed to equal opportunities and equal pay
to foster an inclusive culture. Our policies support this
commitment, including a zero-tolerance approach to
abusive clients to help ensure colleagues feel safe at work.
We maintain an active EDI working group and have achieved
“Disability Confident Committed” status, reflecting our
commitment to accessible recruitment, guaranteed
interviews for eligible disabled candidates, and appropriate
workplace adjustments. We continue to identify opportunities
to strengthen support for both our colleagues and
prospective employees.
The Board has led in its commitment to EDI and
considers reports on our ongoing sustainability and
ESG initiatives at each meeting. Providing valuable
suggestions as to ways new initiatives can be
implemented and ensuring a culture of diversity
and inclusion are thoroughly embedded within
the Group.
The Board is pleased its gender pay gap has
remained stable at 37.9% (2025: 37.6%).
Risk
management
Our internal controls and risk management systems are
integral to the delivery of our strategy in a safe and
sustainable way.
They translate into our day-to-day risk culture throughout
the Group.
The Audit and Risk Committee reviews internal
controls and overall risk management of the Group
including risk registers, as well as internal audit reports
that are focused on risk management. It also provides
guidance so risks are managed within appetite.
The way we
do business
We provide comprehensive policies, training and guidance
to our colleagues, reflecting the standards we expect them
to adhere to, to uphold our values.
We engage with all our stakeholders, including industry
bodies, suppliers and the wider community, to inform
ethical decision making and to help foster a culture of
honesty and integrity.
Regular Board reporting includes updates on the
wider veterinary community. Key policies are
reserved for the Board’s approval. The Audit and
Risk Committee receives updates on compliance
with policies reviewed by internal audit.
Health and
safety
Our priority is to provide a safe and secure workplace
for all, and we have a dedicated health and safety team
along with policies and procedures in place to support this.
We are committed to ongoing investment in our premises
and facilities.
The Board monitors health and safety performance
and considers any issues, such as any Reporting
of Injuries, Diseases and Dangerous Occurrences
Regulations (RIDDOR) reports, at scheduled meetings.
Sustainability
Our care for our clients and their animals extends beyond
the services we provide to considering our wider impact
on the environment. We are always looking for ways to
increase our sustainability and make changes for the better.
The Board monitors sustainability performance
regularly at Board meetings and publishes an
annual Sustainability Report. See page 32 for
further information.
CVS Group plc
Annual Report and Financial Statements 2026
74
Structure of the Board and Board Committees
At 30 June 2026, the Board of Directors consisted of ten members, including five independent Non-Executive Directors, plus
our Chair. Helen Keays and Jane Bednall were both appointed to the Board on 1 April 2026, with Laura Hagan being appointed on
1 May 2026. Deborah Kemp stepped down from the Board and all its Committees as of 30 June 2026. Richard Fairman announced
his intention to retire from the Company on 30 March 2026 and is committed to remaining in office until a suitable replacement has
been appointed and an orderly handover is implemented. The responsibilities of the Board members are set out in the chart below.
The Board and its Committees have access to management and external advisors to assist them in discharging their duties.
During the year ending 30 June 2026, the Board and Board Committees received sufficient, reliable and timely information
in order for them to perform their responsibilities effectively.
Roles and responsibilities
There is a clear division of responsibilities between the Chair and the CEO, and all Board members have clearly defined roles
and responsibilities as set out below. Board members have the range of skills and experience required to ensure the successful
operation, growth and sustainability of the Group, as set out in their biographies on pages 70 and 71.
Role
Name
Responsibility
Chair
David Wilton
The Chair is responsible for leading the Board with objective judgement and for
ensuring its overall effectiveness. The Chair facilitates constructive Board relations
and the effective contribution of all Non-Executive Directors. The Chair ensures that
the Directors receive accurate, timely and clear information as well as overseeing
the governance framework.
CEO
Richard Fairman
The CEO is responsible for setting the Group strategy and capital allocation and
leading the Company’s Executives in managing the day-to-day operations of the
Group. The CEO is accountable for and reports to the Board and is assisted in his role
by the Group’s Exco, the members of which report directly or indirectly to the CEO.
CFO
Robin Alfonso
The CFO reports to the CEO and is responsible for the day-to-day management of
the Group’s finances and support operations, development and implementation of
financial strategy as well as supporting the CEO with developing and implementing
Group strategy.
CVO
Paul Higgs
The CVO reports to the CEO and is responsible for clinical care alongside learning,
education and development. The CVO works with our veterinary regulators and
provides essential specialised information to the Board on the veterinary industry.
Senior Independent
Director
Deborah Kemp
(until 30 June 2026)
Laura Hagan (as of
1 July 2026)
The Senior Independent Director (SID) provides advice, additional support and
experience to the Chair.
Employee
Engagement
Director
Deborah Kemp
(until 30 June 2026)
Laura Hagan (as of
1 July 2026)
The Employee Engagement Director engages with the workforce of the Group,
reporting any legitimate concerns to the Board for consideration.
Non-Executive
Directors
Richard Gray
Joanne Shaw
Helen Keays
Jane Bednall
Laura Hagan
Deborah Kemp
(until 30 June 2026)
Non-Executive Directors provide constructive challenge, strategic guidance and
specialist advice as well as holding management to account and being available
to work with the Chair to resolve any contentious issues.
Company Secretary
Scott Morrison
The Company Secretary acts as Secretary to the Board and its Committees and
is responsible for ensuring that the Board has the policies, processes, information,
time and resources it requires in order to function effectively and efficiently as well
as supporting the Chair in developing and overseeing the governance framework.
CVS Group plc
Annual Report and Financial Statements 2026
75
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Corporate governance statement
continued
Board and Committee meeting attendance
The Board met formally eleven times in the financial year ended
30 June 2026 with meetings planned around key events in the
corporate calendar including interim results, full-year results
and the Annual General Meeting (AGM). The Non-Executive
Directors confirm that they have sufficient time to devote in
order to effectively discharge their Board responsibilities. In
addition to the scheduled Board meetings and other Committee
meetings, the Non-Executive Directors make themselves
available for ad hoc meetings and Board calls to receive regular
updates and to deal with specific projects or matters arising
throughout the year.
The Chair and Non-Executive Directors meet from time to time
as appropriate without the Executive Directors present as well
as meeting with the external auditor at least annually without
the Executive Directors present.
The table on page 67 sets out attendance at Board meetings
during the financial year ended 30 June 2026.
Board composition
The Nomination Committee will continue to regularly review
the diversity of the Board, the Executive Committee and the
Senior Leadership Group. The Board is considered to have an
appropriate mix of skills, experience and tenure. The Board
believes that appointments should be made solely on merit, an
ethos which applies across the business. The Board continues
to ensure that it maintains an appropriate balance through a
diverse mix of experience, background, skill, knowledge and
insight. Further information on Board diversity is detailed
on page 66.
Helen Keays and Jane Bednall were appointed as Non-
Executive Directors on 1 April 2026. Laura Hagan, also Non-
Executive Director, was appointed 1 May 2026. They therefore
did not attend any Board meetings prior to their respective
appointment dates.
Board processes and effectiveness
The Board maintains a formal schedule of matters reserved
for its approval which includes matters of strategy, structure
and capital, financial reporting and internal controls, major
contracts, Board membership, remuneration, delegation of
authority and corporate governance. Matters that fall outside
of those reserved to the Board or its Committees fall within
the responsibility and authority of the CEO, CFO and the CVO
and are either reserved to them or delegated further through
the Group’s delegated authorities policy.
Board and Committee papers are circulated well in advance of
meetings and Directors have access to a Board portal containing
Board packs and reference materials from previous meetings as
well as all Board policies and procedures. In addition to formally
scheduled meetings, the Chair maintains regular contact with
the Non-Executive Directors, CEO, CFO, CVO and Company
Secretary in performing his duties leading the Board.
Read more about the Board evaluation conducted in the year on
page 92
Board induction and training
New Directors appointed to the Board undertake an induction
programme to assist in developing their understanding and
awareness of the business, its governance framework and
Group policies and procedures. Induction training is tailored
to suit the requirements of each new Director and includes site
visits to practices around the Group, meetings with the heads
of Group functions and one-on-one meetings with fellow Board
members, Executive Committee members, the Company
Secretary and the Company’s external advisors in addition
to being provided with details of the Group’s policies
and procedures.
New Board members also receive appropriate training on the
Market Abuse Regulations delivered by the Company Secretary
or external legal counsel.
Independence
Deborah Kemp, Richard Gray, Joanne Shaw, Helen Keays,
Jane Bednall and Laura Hagan are all considered to be
independent by the Board. David Wilton, Chair, was
considered to be independent at the date of appointment.
All Directors will offer themselves for re-election at the 2026
AGM of the Company including Richard Fairman, CEO, unless
a successor has been appointed.
Relations with shareholders
Copies of the Annual Report and Financial Statements are
issued to all shareholders where requested and copies are
available on the Group’s website www.cvsukltd.co.uk/investor-
centre/results-and-reports/. The Group also uses its website
to provide information to shareholders and other interested
parties. The Company deals with shareholder correspondence
as and when it arises throughout the year.
The CEO, CFO and CVO have regular meetings with institutional
investors, private client brokers, individual shareholders, fund
managers and analysts to discuss information made public by
the Group.
The Chair and the Non-Executive Directors are always available
to shareholders on all matters relating to governance and
strategy. They may be contacted through the Company
Secretary by email at company.secretary@cvsvets.com.
CVS Group plc
Annual Report and Financial Statements 2026
76
Shareholder engagement
There has been considerable engagement with institutional and
retail investors during the year ended 30 June 2026, including:
July 2025
•
Trading update
October 2025
•
Preliminary results
•
London and Edinburgh investor roadshow
•
Private client fund manager roadshow
•
Engage retail investor webcast
•
Jefferies Healthcare C-Suite Back to School Series
•
Annual Report and Accounts published
November 2025
•
London roadshow
•
US and Canada roadshow
•
Nordics and Paris roadshow
•
Investec UK CEO Conference
•
Annual General Meeting
•
Trading update
•
CVS Group Conference
December 2025
•
Berenberg European Conference
January 2026
•
Trading update
•
RBC UK Focus Conference
•
dbAccess UK and Ireland Conference
•
Move to the Main Market of the London Stock Exchange
February 2026
•
Half-year results presentation
•
London investor roadshow
March 2026
•
London investor roadshow cont.
•
Private client fund manager roadshow
•
Engage retail investor webcast
•
Berenberg UK Corporate Conference
May 2026
•
Berenberg European Conference New York
June 2026
•
Peel Hunt FTSE 250+ Conference
The Audit and Risk Committee
Joanne Shaw chaired the Committee throughout the year under
review. Committee membership is shown on page 83.
The Board considers that the members of the Audit and Risk
Committee have recent and relevant financial expertise, and that
the Committee as a whole has competence relevant to the sector
in which the Company operates.
The Audit and Risk Committee’s duties primarily concern
financial reporting, internal control and risk management
systems, whistleblowing procedures and internal audit and
external audit arrangements (including auditor independence).
The Audit and Risk Committee Report can be found on pages 83
to 87.
The Nomination Committee
David Wilton chaired the Nomination Committee from 31 March
2026, succeeding Richard Gray who remains a member of the
Committee. Committee membership is shown on page 88.
The Nomination Committee is responsible for reviewing the
structure, size and composition, including skills, independence,
knowledge and experience of the Board. It is also responsible
for the co-ordination of the annual evaluation of the
performance of the Board and of its Committees, and for
ensuring appropriate succession plans are in place.
During September 2025, the Board Chair, assisted by the
Company Secretary, worked with external consultants to carry
out a review of Board effectiveness which included a review of
the information provided to the Board, the composition of the
Board, the decision-making processes, the Board Committees
and the Board’s annual agenda.
The Board has committed to adopting an annual review and
an external review to be carried out every three years in
accordance with best practice.
Read more about our external Board evaluation on
page 92
The Committee is responsible for making recommendations to
the Board on all Board appointments and on the succession
plans for both Executive Directors and Non-Executive Directors.
The Nomination Committee Report can be found on pages 88 to 92.
The Remuneration Committee
Deborah Kemp chaired the Remuneration Committee throughout
the year under review and was succeeded by Helen Keays from
1 July 2026. Committee membership is shown on page 93.
The Remuneration Committee has delegated responsibility for
designing and determining remuneration for the Chair and for
senior management including the Executive Directors and the
Company Secretary.
The CEO, CFO and CVO were invited to attend meetings as
appropriate but do not participate in discussions relating to their
own remuneration.
The Remuneration Committee Report can be found on pages 93
to 109.
Management Committees
In addition to the Board Committees, the Group has a number
of Management Committees to help support the Executive
Committee members in the implementation of strategy and risk
and governance oversight across their respective divisions.
•
Disclosure Committee
•
Acquisitions Committee
•
Capital Expenditure Committee
•
Health and Safety Committee
•
Clinical Advisory Committee
•
Pricing Committee
•
Technical Committee
•
Sustainability Committee
•
Cyber and Data Protection Risk Committee
CVS Group plc
Annual Report and Financial Statements 2026
77
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Corporate governance statement
continued
The Company Secretary
The Company Secretary is responsible for ensuring that Board
procedures are complied with, advising the Board on all
governance matters, supporting the Chair and helping the
Board and its Committees to function efficiently. All Directors
have access to the advice of the Company Secretary.
Scott Morrison was Company Secretary throughout the year
under review.
Annual General Meeting (AGM) 2025 – voting results
In the 2025 AGM results announcement, the Board of CVS
noted that all the resolutions had been passed with the requisite
majority. In compliance with the Code, the Board of Directors
engaged with shareholders to discuss their feedback in relation
to resolutions that obtained greater than 20% of votes cast
against. An interim update statement was released on the
Company’s Investor Relations website and the final statement
is available on page 93.
Whistleblowing
The Group’s whistleblowing policy is reviewed by the Board
annually. The policy sets out the procedures for employees or
third parties to raise concerns about any suspected wrongdoing.
Employees also have access to a wide range of alternative and
informal routes through which to raise concerns. This reflects
the open culture and strong internal communication channels
of the Group, in line with its strategy, and supports the formal
whistleblowing policy it has in place.
The Board is notified of any whistleblowing reports received at the
next Board meeting and will receive more detailed reports of any
investigations that take place. There were no major issues reported
to the Board under the whistleblowing policy during the year.
An external whistleblowing service was implemented in the
first quarter of the financial year, ensuring staff can raise their
concerns with assurance of anonymity and allowing for greater
transparency and oversight.
Audit, risk and internal control
The Board is ultimately responsible for the Group’s system
of internal control and for reviewing its effectiveness on
an ongoing basis.
The system is designed to manage rather than eliminate the
risk of failure to achieve the Group’s strategic objectives and
can only provide reasonable and not absolute assurance
against material misstatement or loss.
The key risk management processes and internal control
procedures include the following:
•
the close involvement of the Executive Directors in all aspects
of the day-to-day operations, including regular meetings with
senior colleagues from across the Group and a review of the
monthly operational reports compiled by senior management;
•
clearly defined responsibilities and limits of authority. The Board
has responsibility for strategy and has adopted a schedule of
matters which are required to be brought to it for decision;
•
a comprehensive system of financial reporting, forecasting
and budgeting. Detailed budgets are prepared annually for
all parts of the business. Reviews occur throughout the
management structure culminating in a Group budget which
is considered and approved by the Board. Group management
accounts are prepared monthly and submitted to the Board
for review. Variances from the budget and the prior year are
closely monitored and explanations are provided for significant
variances. Independent of the budget process, the Board
regularly reviews revised profit, cash flow and bank covenant
compliance forecasts, which are updated to reflect actual
performance trends;
•
a continuous process for identifying, evaluating and
managing significant risks across the Group together with
a comprehensive annual review of risks which covers both
financial and non-financial areas;
•
an independent internal audit function provided by KPMG
that reports to the Chair of the Audit and Risk Committee;
•
a central team that checks clinical and health and safety
compliance in all parts of the Group; and
•
the Company’s Delegation of Financial Authority.
The Board is committed to maintaining high standards of business
conduct and ethics and has an ongoing process for identifying,
evaluating and managing any significant risks in this regard.
The internal control procedures are delegated to the Executive
Directors and senior management and are reviewed in light of
the ongoing assessment of the Group’s significant risks.
Remuneration
The Board considers that policies on Executive remuneration
should be transparent. They should be implemented in a manner
which supports strategy and promotes long-term sustainable
growth. In addition, remuneration should reflect the performance
of both the Company as well as individuals. The Board has
delegated to the Remuneration Committee responsibility for
complying with these aspects of the Code and the work of the
Committee is reported in full on pages 93 to 109 of this Annual
Report. The Group’s 2026 remuneration policies are fully in
compliance with the principles and provisions of the Code save
for pensions alignment per Provision 39 as disclosed on
page 97. During the year, it was decided as of 1 July 2026 the
necessary changes would be implemented to bring the Group
into alignment with Provision 39.
Annual General Meeting (AGM)
The Annual General Meeting of the Company will take place on
25 November 2026. Full details of resolutions to be proposed to
our shareholders will be set out in the Notice of AGM which will
be made available in the Investor Centre on our website.
Outcomes of the resolutions put to the AGM, including poll
results detailing votes for, against and withheld, will be published
on the website of the Company and the London Stock Exchange
once the AGM has concluded.
By order of the Board
Scott Morrison
Company Secretary
24 September 2026
CVS Group plc
Annual Report and Financial Statements 2026
78
Section 172(1) statement and stakeholder engagement
Engaging stakeholders,
delivering our purpose
Stakeholder engagement
The Board has identified seven key stakeholders that are
essential to the delivery of the Company’s strategy and
long-term success, details of which are set out in the following
pages. Our colleagues, our clients and their animals, our
investors, our communities, our industry bodies, our suppliers
and our environment are at the heart of what we do; it is of the
highest importance that we as a Board engage with all of our
stakeholders through a combination of direct engagement and
information provided by management, to meaningfully inform
decision making and ensure that we provide value in all areas of
our business. We promote an ongoing dialogue with all of our
stakeholders where possible to enable us to act on feedback
and foster a culture of honesty and integrity. The following
pages explain how the Board gains insight into stakeholder
views and how these considerations have influenced Board
discussions and decisions during the year.
Section 172(1) statement
Our Section 172(1) statement sets out how the Board has given
regard to the matters set out in Sections 172(1)(a)–(f) of the
Companies Act 2006 (s172) in performing its duties over the
course of the year. The Company’s purpose, vision and strategy
are reviewed and discussed annually by the Board to ensure
that these continue to promote the long-term success of the
Company for the benefit of its members as a whole, whilst also
having regard to the matters set out in s172.
Purpose, vision and strategy
Our purpose is to provide the best care to as many animals as
possible and our vision is to be the veterinary company people
most want to work for. This purpose and vision shape our
culture, guide our decisions and keep us focused on delivering
positive outcomes for animals, clients and colleagues.
Consideration of s172 factors by the Board
The table on page 80 sets out some key decisions taken
by the Board during the year and how engagement with
stakeholders has been discussed and taken into consideration
in decision making.
The Board has a duty to act for the benefit of its members
as a whole whilst having regard to the matters set out in s172:
a. the likely consequences of any decision in the long term;
b. the interests of the Company’s employees;
c. the need to foster the Company’s business relationships
with suppliers, customers and others;
d. the impact of the Company’s operations on the community
and the environment;
e. the desirability of the Company maintaining a reputation
for high standards of business conduct; and
f. the need to act fairly as between members of the Company.
CVS Group plc
Annual Report and Financial Statements 2026
79
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Consideration of s172 factors by the Board
Why this matters to the Board
Customers rightly expect the highest-quality
care for their animals. We provide this through
our veterinary services model which enables
us to deliver high clinical standards and
quality facilities.
We engage with our customers to ensure we
are meeting high standards of service and to
identify opportunities to improve client service.
How the Board gains insight
•
Reports on regular clinical and non-clinical
feedback and engagement.
•
Observing social media channels for
individual practices and for the Group.
•
Monitoring of client feedback and complaints.
•
Through monitoring of our client Net
Promoter Score (cNPS).
2026: Outcomes
•
Client NPS has increased to +80.6 from
+78.9 in 2025.
•
Launch of Healthy Pet Club Advanced on
1 July 2026, offering customers greater
peace of mind through unlimited
consultations alongside a range of
preventative healthcare benefits.
•
Launch of “CVS Vets” joint branding
online and in practices.
Sustainability focus:
Our long-term ambitions
•
A healthy pet population.
•
Outstanding clinical expertise.
•
The best possible service for pet owners
and their animals.
•
High levels of preventative healthcare,
which we can support through membership
of our preventative healthcare schemes.
•
Continued strong client Net Promoter Score.
Why this matters to the Board
Our colleagues play a vital role in delivering
our purpose of providing the best care to as
many animals as possible. To achieve our
vision of being the veterinary company
people most want to work for, we engage with
colleagues to understand their experiences
and priorities, helping us support wellbeing,
development and long-term career growth.
How the Board gains insight
•
Through regular calls with our team and
practice leaders.
•
Through our dedicated Employee
Engagement Director.
•
Through our employee Net Promoter Score
surveys (eNPS).
•
At our annual leadership conference.
2026: Outcomes
•
Our colleague eNPS score increased to
+5.8 from +3.1 in 2025, reflecting our
continued focus on colleague engagement
and wellbeing, together with a positive
recovery following the uncertainty created
by the CMA investigation.
•
We continued to focus on the CVS (UK) Ltd
median gender pay gap, which has
reduced to 37.9% from 43.8% in 2022,
reflecting progress towards greater gender
balance across the business.
•
Introduction of the MiHR Pawtal, equipping
managers with on demand resources and
guidance to support consistent and effective
people management across the Group.
•
CVS introduced a new in-country Employee
Assistance Programme (EAP) in Australia,
enhancing support for colleagues.
Sustainability focus:
Our long-term ambitions
•
Becoming the veterinary company people
most want to work for.
•
Fulfilled vets and nurses who have the
equipment, access to expertise and support
to provide the best possible care for animals.
•
Equal opportunities for all colleagues.
•
Having the best learning, education and
development (LED) platform in the industry.
•
Continued strong employee Net Promoter
Score with a 2026 target to increase our
eNPS score to +7.0.
1. Our colleagues
2. Our clients and their animals (customers)
Board decision
s172 considerations
Listing on the Main Market of the London
Stock Exchange
The Board considered and approved moving from the
Alternative Investment Market to the Main Market of the
London Stock Exchange.
Links to s172: a, c, e and f
The Board considered the merits of transitioning to the Main Market, with the
alternative of staying on AIM, and determined that such a move would provide
access to deeper pools of capital across a broader range of investors, offer the
potential for index inclusion, improve trading liquidity, and enhance the Group’s
corporate profile. The Company extensively engaged with shareholders and
potential shareholders during the transition and communicated with colleagues
at our Group Leadership Conference. The Board concluded the move to the
Main Market provide the Company longer-term benefits as detailed above.
The Company achieved FTSE 250 Index inclusion in March 2026.
Dividend and share buyback programme
During the year, the Board approved a final dividend of
8.5p per Ordinary share as at 7 November 2025 for the
year ended 30 June 2025.
The Group also completed a £20.0m share buyback
programme and announced a further £50.0m share
buyback programme in May 2026 which remains underway.
All shares repurchased under the programme were
cancelled, reducing the Company’s issued share capital.
Links to s172: a, c, e and f
The Board considered the Company’s capital position and performance and
agreed the continuation of its progressive dividend policy which is based on
growing the dividend per Ordinary share over time.
The Board approved and oversaw the implementation of the Group’s share
buyback programmes as part of its capital allocation framework. In reaching
its decision, the Board considered the Group’s financial position, investment
requirements and long-term strategic objectives and its prevailing share price
alongside the interests of shareholders and other key stakeholders, and
concluded that the buyback represented an appropriate use of capital whilst
maintaining flexibility to support future growth and investment.
Appointment of new
Non-Executive Directors
During the course of the year, the Board appointed three
new Non-Executive Directors.
Links to s172: a, e and f
The Board regularly reviews its composition to ensure it has an appropriate
balance of skills, experience, independence and diversity to support the
successful delivery of the Group’s strategy. During the year, Helen Keays, Jane
Bednall and Laura Hagan joined the Board. Collectively, these appointments
broaden the Board’s experience and perspectives, enhance diversity of thought
and representation, strengthen governance capabilities and support effective
oversight of the Group’s long-term strategy and stakeholder interests.
Section 172(1) statement and stakeholder engagement
continued
CVS Group plc
Annual Report and Financial Statements 2026
80
Why this matters to the Board
We actively engage with our shareholders,
highlighting our investment case and
communicating our future plans, to ensure
the Group’s strategy is aligned to the interests
of its shareholders.
Our shareholders hold us accountable
for doing the right thing, and by engaging
with them we can understand and act on
their expectations, enabling us to drive the
business forward, deliver sustainable growth
in shareholder returns and attract additional
investors to support the business.
How the Board gains insight
•
Shareholder consultation on key issues
raised through AGM voting or through
regular meetings.
•
Attendance at broker conferences and
roadshows across the UK, the US, Canada
and Europe. Shareholders have access to
senior management and receive
appropriate communications.
2026: Outcomes
•
At the 2025 AGM, 100.0% of resolutions
were passed with all resolutions achieving
over 77.7% votes for.
•
During the year, we attended 14 investor
roadshows and conferences alongside all
Directors making themselves available to
meet investors on request.
•
Investor webcasts with question and
answer sessions, with our dedicated
investor presentation on capital allocation
in July 2026.
•
We paid £6.1m in dividends relating to the
year ended 30 June 2025, representing
8.5p per share. In 2026, we have proposed
a dividend of 9.0p per share.
•
Successfully transferred from AIM to
the Main Market of the London Stock
Exchange, strengthening the Company’s
capital markets presence and expanding
access to potential investors.
Sustainability focus:
Our long-term ambitions
•
Sustainable shareholder value and
long-term growth.
•
Progressive dividend policy.
•
Shareholder consultation on key issues
raised through AGM voting or through
regular meetings.
•
Shareholders continue to have access
to senior management and receive
appropriate communications.
3. Our investors (shareholders)
Why this matters to the Board
We regularly engage with local communities
in which our practices operate, communities
of pet owners and animal carers and the
communities to which our colleagues belong,
in order to understand how we can
support them.
By engaging with our communities, we can
find ways to contribute positively to the
environments in which we work, promote
employment satisfaction within our operations
and support our communities to achieve
common goals.
How the Board gains insight
•
Our practices engage within their local
communities, providing key care to animals
for local charities or individuals who
identify animals in need.
•
We observe social media posts on topical
pet care items, e.g. how to protect pets in
hot weather.
•
We have a charity of the year, which is
chosen by our colleagues; in 2025–26 our
colleagues chose StreetVet, for which we
held fundraising events from locally
arranged events to Group-wide initiatives.
2026: Outcomes
•
Our colleagues, combined with donations
from our clients, raised funds in 2026 for
our charity of the year, StreetVet. CVS also
continued its annual donation to Vetlife.
•
The Big Team Challenge will plant 114
trees on our behalf following our team
distance challenge.
Sustainability focus:
Our long-term ambitions
•
Increasing the socio-economic diversity
of qualified veterinary surgeons and nurses
in CVS and the wider profession.
•
Raising money for relevant charities.
•
Promoting the responsible use of
antibiotics and reducing their use,
whilst balancing animal welfare.
4. Our communities
Why this matters to the Board
We actively engage with our industry bodies,
including the Royal College of Veterinary
Surgeons (RCVS), the British Veterinary
Association (BVA) and the British Veterinary
Nurses Association (BVNA), to promote
innovation and advancement within the
veterinary industry.
How the Board gains insight
•
Regular liaison with industry bodies
including the Royal College of Veterinary
Surgeons, British Veterinary Association,
British Veterinary Nursing Association,
and more through the Chief Veterinary
Officer.
•
Support veterinary schools and students
with intra-mural and extra-mural studies.
•
Appropriate colleagues attend update calls
and webinars with regulatory bodies to
understand upcoming regulatory changes.
2026: Outcomes
•
We published our annual Quality
Improvement Report. An organisation
that is committed to quality improvement
should be prepared to share its results,
celebrate progress and recognise success
in learning, which is what we aim to
achieve with this report.
•
We are active within the veterinary
community, engaging with industry
bodies on topical subjects and supporting
veterinary professionals to advance the
profession, for example through our
Clinical Research Awards. We also
support charities, such as Vetlife, that
support individuals and their families
in the veterinary community.
•
We have also contributed to broader sector
initiatives, including participation in the
Veterinary Sustainability Roundtable.
•
CVS hosted 1,687 weeks of intra-mural
rotations.
•
Our CVO and other senior colleagues
have engaged with our industry bodies
on regulatory change of the Veterinary
Surgeons Act 1966.
•
Our colleagues published 88 peer
reviewed papers.
Sustainability focus:
Our long-term ambitions
•
Raising standards across the industry.
•
Involvement in setting strategy and
policy, collaborative projects, meetings
and events.
•
Tracking the numbers of veterinary
and nurse students we have supported
with training.
5. Our industry bodies
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Why this matters to the Board
We are proud to have long-term relationships
with our wholesalers and manufacturers,
regularly communicating with them to
promote positive relationships. Through these
relationships we can generate consistent
custom for our suppliers, in return achieving
mutually favourable terms on purchases.
We engage with our suppliers to deliver
ongoing benefits to our businesses,
collaboratively finding operational and
sustainable improvements and delivering
improved value.
We have shared sustainability goals with
some of our key suppliers. We recognise that
through working together we can reduce our
impact on the environment.
How the Board gains insight
•
We have a clearly defined procurement policy.
•
We receive updates from regular meetings
with suppliers to review performance,
agree terms and identify additional
opportunities for future growth.
•
Key suppliers are invited to attend our
annual leadership conference to
understand our business, engage with
other key stakeholders and ask any
questions they may have.
2026: Outcomes
•
We continued to nurture our strong
working relationships with our key
suppliers, including attendance at
conferences, inviting suppliers to
host stands at internal meetings and
collaborating on marketing campaigns.
•
One of the veterinary sector’s first lifecycle
analyses (LCA) was completed for an
own-brand product, MiPet Meloxaid,
establishing a sustainability benchmark
and strengthening transparency through
supplier collaboration.
•
We strengthened the integration of
sustainability within procurement by rolling
out an ESG assessment questionnaire,
completed by 105 suppliers, providing
valuable insights into their environmental,
social and governance performance.
Sustainability focus:
Our long-term ambitions
•
Reducing the volume of products we use
that generate large amounts of waste.
•
Collaborative initiatives that reduce plastic,
packaging and delivery emissions.
•
Continuing to embed supplier and product
sustainability into purchasing processes with
the aim of improving our own credentials.
6. Our suppliers
Why this matters to the Board
Our long-term success depends on the
sustainable use of the planet’s resources.
How the Board gains insight
•
As well as monitoring our KPIs closely, we also
take part in accreditations that demonstrate
our environmental standards, such as the
RCVS Practice Standards Scheme.
2026: Outcomes
•
We continue to source our electricity from
renewable sources in the UK.
•
Our “Prescribing with Purpose”
programme, has focused on reducing
the environmental impact of anaesthetic
gases such as isoflurane.
•
Smart meters had been installed across
85% of gas supplies and over 90% of
half-hourly electricity supplies, each
providing live consumption data.
•
We have expanded our emissions reporting
to include Australian operations within our
SECR disclosures, marking an important
step towards more comprehensive and
consistent sustainability reporting across
our operations.
Sustainability focus:
Our long-term ambitions
•
Monitoring and reducing our
environmental impact.
•
Reducing waste sent to landfill
and increasing the proportion of
our non-medical waste recycled.
•
Reducing our energy use and
carbon footprint.
7. Our environment
Working together
in practice
A project involving 54 small animal practices demonstrated how
structured auditing, reflective learning and strong team engagement
can improve infection prevention standards. Led primarily by
registered veterinary nurses, each practice appointed a local infection
control lead to coordinate audits and encourage participation.
Practices were supported with educational resources, reflective
learning tools and facilitated discussions to help identify and address
infection control risks. Over the course of the project, audit scores
improved by an average of more than six points, with the greatest
gains seen where regular audits and team reflection were embedded.
The initiative also increased awareness of contamination risks,
strengthened team ownership and reinforced that effective infection
control is a shared responsibility across the whole practice.
What makes us CVS
Section 172(1) statement and stakeholder engagement
continued
CVS Group plc
Annual Report and Financial Statements 2026
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Audit and Risk Committee report
Enhancing governance,
controls and assurance
Introduction
I am pleased to present the Committee’s report for the year
ended 30 June 2026. This report explains how the Committee
discharged its responsibilities during the year, including its
oversight of the integrity of the Group’s financial statements,
the effectiveness of the financial control environment and the
Group’s risk management framework.
During the year, the Committee led a competitive tender process
for the external audit, which resulted in the recommendation to
re-appoint Deloitte LLP as external auditor. Further information
is set out on page 85.
We also approved non-audit services to be undertaken by
Deloitte LLP, as Reporting Accountant on the Group’s move
from the Alternative Investment Market to the Main Market of
the London Stock Exchange alongside the review of the Group’s
consolidated interim financial statements.
We also oversaw the Group’s outsourced internal audit function
which reports directly to the Committee. The Committee has
responsibility for the annual internal audit plan, reviewing key
outputs and assessing the performance of the internal
audit function.
The agenda of each meeting is linked to the reporting
requirements of the Group and it’s financial calendar. Each Audit
and Risk Committee member has the right to require reports on
matters relevant to its terms of reference in addition to the
regular items.
Joanne Shaw
Audit and Risk Committee Chair
The Audit and Risk Committee liaises with the external
auditor, reviews the Annual Report and Financial
Statements, and considers matters relating to internal
controls. The Committee comprises Non-Executive
Directors with significant senior leadership and financial
experience, providing the skills and judgement required
to oversee these areas effectively.
The Committee has a particular focus on the following areas:
•
reviewing and challenging the Group’s financial reporting
including the integrity of the financial statements,
narrative and significant financial judgements; and
•
the effectiveness of the internal control and risk
management framework alongside the wider compliance
environment reporting including whistleblowing.
The Committee’s roles and responsibilities are covered in its
terms of reference which are available on our corporate website
www.cvsukltd.co.uk/investor-centre/corporate-governance/.
Committee composition during the year
to 30 June 2026
Joanne Shaw – Chair
Richard Gray
Deborah Kemp (resigned 30 June 2026)
David Wilton (ceased to be a member on 6 October 2025)
Helen Keays (appointed 1 April 2026)
Jane Bednall (appointed 1 April 2026)
Laura Hagan (appointed 1 May 2026)
The Committee member attendance table is shown on
page 67. In addition to formal meetings during the year,
there were regular informal discussions on succession plans
and appointments at the Senior Leadership Group level.
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The Directors’ Report
Audit and Risk Committee report
continued
Key activities in 2026
The Committee met four times during the year; the summary
below represents the key Committee activities during the year:
August 2025
•
Approved the engagement of Deloitte LLP to provide
non-audit services as Reporting Accountant for the move
from the Alternative Investment Market to the Main Market.
October 2025
•
Reviewed the 2025 Annual Report, including:
•
significant accounting issues, managements key
judgement, alternative performance measures and
other key disclosures;
•
going concern and viability and impairment review papers;
•
ensuring the report was fair, balanced and
understandable; and
•
risk disclosures.
•
Considered Deloitte’s external audit report on the 2025
Annual Report and Financial Statements, including:
•
challenged the external auditor’s audit findings
memorandum, including conclusions on identified
audit risks;
•
materiality, adjusted and unadjusted misstatements; and
•
control observations and related disclosure enhancements.
•
Held private discussions with the audit partner without
management present.
•
Reviewed internal audit report findings and updates.
•
Reviewed the effectiveness of the Group’s risk
management framework and internal control environment.
•
Reviewed the performance and independence of the
external auditor and recommended its re-appointment.
•
Ensured that there were no related party conflicts.
•
Reviewed compliance with the UK Corporate Governance
Code as presented annually by the Company Secretary.
•
Reviewed progress on Provision 29 planning and
roadmap updates.
•
Conducted the annual review of the effectiveness of KPMG
as the internal audit services provider to the Group.
February 2026
•
Agreed the fees to be paid to the external auditor for its
audit of the 2026 financial statements, including additional
audit fees for the Australian audit.
•
Reviewed progress on Provision 29 planning and
roadmap updates.
•
Reviewed internal audit report findings and updates.
•
Assessed the external auditor’s planning paper.
•
Reviewed and agreed the approach to the external
auditor tender.
•
Approved the updated internal audit plan for FY26.
•
Reviewed the interim financial statements including interim
risk disclosures, and significant accounting issues and
management judgements.
May 2026
•
Undertook an annual review of the non-audit services
policy and non-audit service activities undertaken in FY26.
•
Reviewed internal audit report findings and updates.
•
Received specific tax updates including open tax matters
and the application of BEPS Pillar 2 and transfer pricing
across the Group.
•
Approved the tax strategy for the Group for republication.
•
Reviewed and approved paper on alternative performance
measures (APM) outlining the judgements applied in
relation to their use and disclosure in the Annual Report and
Financial Statements.
•
Conducted an external audit retender and, following
consideration of the outcome, recommended the
appointment of the external auditor to the Board.
•
Reviewed the Group’s principal risk update.
•
Received the fraud update and counter-fraud effectiveness
and any open matter.
Significant financial reporting risks and judgement areas considered during the year
During the year the Audit and Risk Committee considered a number of financial reporting risks and judgement areas in further detail
as these are considered significant risks by our external auditor; the Committee concluded on all areas that it was satisfied the
appropriate controls and processes are in place.
Area
Action taken by Committee
Outcome
Revenue
recognition
The Committee reviewed the appropriateness of revenue
recognised in relation to the cost profile of delivering
performance obligations under the Healthy Pet Club scheme.
The Committee considered management’s analysis and the
external auditor’s findings.
The Committee concluded based on the
information provided that the approach
remained appropriate.
Management
override
The Committee reviewed the risk of management override
of controls and considered the design and operation of
relevant controls.
The Committee considered the enhancements made to the
control environment during the year, including the Financial
Position and Prospects Procedures (FPPP) process as part of
the move to the Main Market.
The Committee was satisfied that the
controls in place to mitigate risk of
management override continued to
operate as intended and further
enhancements were made during the
year to further strengthen the control
environment remained appropriate.
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Area
Action taken by Committee
Outcome
Research and
Development
Expenditure Tax
Credit (RDEC)
income
The Committee reviewed the appropriateness of the income
recognised in relation to RDEC, along with the associated
accounting estimates and judgements. During the year,
the Committee reviewed and considered that the level of
uncertainty inherent in RDEC claims was reducing, mainly
by virtue of improved data collection and cost allocation.
The Committee was satisfied that the
Group’s accounting treatment, assumptions
and controls were appropriate having also
considered the judgement and uncertainty
of the associated claims.
Presentation
of financial
statements
During the year the Committee formally approved the
definitions and use of alternative performance measures
(APMs) and the presentation of adjusting items in accordance
with Group accounting policies. Management provided a
detailed paper outlining the alternative performance measures
to be used and the definitions of each measure. The paper
also outlined the judgements applied in relation to the
disclosure of these items.
The Committee concluded the judgements
and use of APMs remained consistent,
balanced and aligned with the Group’s
reporting principles and approved the use
of these during the year.
Going concern
and viability
assessment
The Committee reviewed the Group’s assessment of going
concern and viability over a period greater than twelve months.
In assessing going concern and viability, the Committee
considered the Group’s position presented in the approved
budget, latest forecasts and five-year plan. In the context
of the current economic environment as a result of ongoing
cost of living challenges and continued inflationary pressures
on the business, a severe but plausible downside scenario
was applied to the plan. This included assumptions such
as negative like-for-like growth and increased costs.
The Committee has also reviewed the Group’s reverse
stress test that was applied to the model.
The Committee has concluded following
review of the Going concern assumptions,
sensitivities and stress testing performed
by management that the going concern
basis and viability assessment remains
appropriate and reasonable. See note 2
on page 132 for further information.
External auditor
The Audit and Risk Committee has primary responsibility for
the supervision of the relationship with the external auditor,
including overseeing its qualification, independence, expertise,
performance and effectiveness, and the terms of its engagement
and remuneration. The Committee is also responsible for
ensuring the quality and efficiency of the external audit enabling
the Committee to formally evaluate the effectiveness and quality
of the auditor’s output, which it does annually.
The external auditor was appointed with effect from the year
ended 30 June 2017, giving a current tenure of nine years as
at 30 June 2026. During the year, the Committee oversaw a
competitive external audit tender process in accordance with
applicable regulatory requirements. The Committee led the
process and determined the evaluation criteria, timetable
and governance arrangements.
Consistent with the FRC’s Audit Committees and the External
Audit: Minimum Standard, the assessment focused primarily on
audit quality. The criteria included the firm’s sector experience,
technical capability, independence and objectivity, proposed
audit approach, use of technology and data analytics, quality
control procedures, partner and team experience, ability to
provide robust challenge to management and commitment
to audit quality and continuous improvement. Price was
considered as part of the overall evaluation but was not a
determining factor in the Committee’s assessment.
The Committee reviewed written proposals, presentations from
each participating firm and feedback from management and
relevant stakeholders. Committee members also met proposed
engagement teams and considered each firm’s approach to
audit execution, governance and communications.
Following a comprehensive evaluation against the agreed
criteria, the Committee concluded that Deloitte LLP was best
placed to deliver a high-quality audit and recommended its
appointment to the Board. The appointment will be reviewed
annually and remains subject to shareholder approval at the
AGM. Details of the fees paid to the external auditor during the
financial year are set out in note 6 to the financial statements.
After reviewing the external auditor’s performance during the
year, the Committee has concluded that it is satisfied with the
effectiveness of the audit and the audit process with the external
auditor demonstrating appropriate independence and objectivity
and that the external auditor remains effective in its role.
In reaching this conclusion, the Committee considered the
external auditor’s independence safeguards, compliance with the
Group’s non-audit services policy, audit partner rotation, nature
and level of non-audit fees and whether any relationships existed
that could impair objectivity. The Committee also assessed the
quality of the audit taking into consideration, audit planning and
execution, the robustness of challenge provided to management,
the quality of reporting to the Committee and feedback from
management and finally the auditor’s compliance with relevant
ethical and professional requirements. The Chair maintains
regular contact with the external audit partner and the Committee
also met privately with the auditor without management present.
Compliance with the CMA Order for Audit tender
The Committee confirms that it has complied with the
provisions of The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014
throughout the year. This included oversight of the mandatory
audit tender process, assessment of auditor independence
and effectiveness, review of audit quality and approval of
non-audit services in accordance with the Committee’s policy.
The Committee is satisfied that the external audit process
remained effective and independent throughout the period.
CVS Group plc
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The Directors’ Report
Internal audit
The Group has an outsourced internal audit function with KPMG
who attend each Audit and Risk Committee meeting and provide
key updates from reviews undertaken during the period. Each
report receives a rating which allows the Board to evaluate the
effectiveness of the internal controls over key risks. The Board
has the opportunity to challenge the outcome of the reports
and request additional controls are put in place over key areas.
During the year the Board was satisfied that the outcome
of the reports issued resulted in appropriate controls across
the Group.
KPMG provides additional oversight assurance to the
Committee by discharging its responsibilities, performing
internal audit reviews over key areas and identifying risks
and gaps in controls which require mitigation.
The Committee Chair maintains regular contact with the internal
audit team. During the year, the Committee approved the annual
internal audit plan which is developed to address key risks
across the business as well as covering core governance,
financial and commercial processes. The Committee undertakes
an annual assessment of the effectiveness of the internal audit
function. In conducting this review, the Committee considers
the quality and insightfulness of internal audit reports, the
robustness of findings and recommendations, management’s
responsiveness to actions raised, progress against the
approved audit plan, the independence and objectivity of
the internal audit team, and the adequacy of internal audit
resources and expertise.
The Committee also considers feedback from management
and Committee members, the quality of reporting to the
Committee and the extent to which internal audit activity
provides assurance over the Group’s principal risks,
key controls and governance processes.
Following its review, the Committee concluded that the internal
audit function continued to provide effective independent
assurance to the Board and Audit and Risk Committee and
remained appropriately resourced and effective in supporting
the Group’s risk management and internal control framework.
Risk management and internal control
The Committee has delegated responsibility from the Board to
consider the potential risks impacting the Group and the risk
appetite and overall risk management framework of the Group
and whether they are at a level acceptable to achieving the
strategic objectives of the Group.
The Committee reviewed the alignment between principal risks,
risk appetite, key controls and sources of assurance. Particular
focus was given to whether the framework provides an
appropriate basis for monitoring emerging risks and for
escalating control matters to the Committee and Board in a
timely manner. Details of our risk framework, together with
principal and emerging risks, can be found on pages 56 to 63.
The Committee also receives regular updates on policies,
procedures and controls which are embedded within business
processes. Compliance is monitored through regular review
and via the internal audit plan where appropriate for the year.
These regular updates enable the Board to monitor changes
in the Company’s risk profile and assess whether the risk
management framework remain appropriate.
Board review of effectiveness
During the year, the Board, supported by the Audit and Risk
Committee, undertook its annual review of the effectiveness
of the Group’s risk management and internal control systems.
In performing this review, the Board considered reports from
management, internal audit reviews, external audit observations,
compliance reports, whistleblowing matters, fraud reporting,
principal risk assessments and updates on remediation activities.
The review covered financial, operational, compliance and
reporting controls and considered the adequacy of the Group’s
three lines of assurance model and sources of assurance
across the business.
Based on the work performed during the year, the Board
concluded that the Group’s risk management and internal
control framework remained appropriate for the size,
complexity and risk profile of the business and that processes
were in place to identify, assess, manage and monitor risk.
Where enhancement opportunities were identified through
assurance activities and ongoing monitoring, management
developed remediation plans which were overseen by the Audit
and Risk Committee and reported to the Board.
Provision 29
The UK Corporate Governance Code introduces the requirement
for the Board to provide a declaration of how the Board has
monitored and reviewed the effectiveness of the internal control
framework and provide a declaration of the effectiveness of its
material controls as at the balance sheet date and to disclose any
material controls which have not operated effectively (including
action taken or proposed to be improved). It specifically states
that the Board’s monitoring and review should cover all material
controls, including financial, operational, reporting and
compliance controls.
The revised Code including Provision 29 does not apply to
CVS Group plc until our financial year ending 30 June 2027;
however, management has a clear roadmap and provides regular
updates to the Audit and Risk Committee on progress to ensure
the Group is well prepared for this date. The Group’s financial
controls framework is based on a “Three Lines of Assurance”
model, which is explained in more detail in our Risk Management
section on pages 56 to 63. The roadmap includes mapping our
principal risks as well as wider controls across financial reporting,
operational, compliance and non-financial reporting processes
to the revised governance framework with clear accountabilities
allocated to a member of our Executive Committee.
During the year, management progressed the identification and
documentation of material controls across financial reporting,
operational, compliance and reporting processes. Particular
focus was given to the alignment of principal risks, risk
appetite, key controls and sources of assurance.
During FY27, the Group intends to undertake formal operating
effectiveness testing of identified material controls and conduct
a dry-run assessment of the processes supporting the future
Provision 29 declaration. The Committee will continue to
monitor progress, review the outcome of testing activities and
oversee remediation plans where improvement opportunities
are identified.
The Board believes that the programme remains on track
to support compliance with the revised Code requirements
applicable to the Group’s financial year ending 30 June 2027.
Audit and Risk Committee report
continued
CVS Group plc
Annual Report and Financial Statements 2026
86
Whistleblowing/fraud
The Board and Committee review any significant fraudulent
activity and whistleblowing by colleagues or other parties,
and action is taken to remedy control weaknesses identified.
Non-audit services and fees
The Committee formally approved the Group’s policy on
non-audit services, which restricts the engagement of the
external auditor in relation to non-audit services. The purpose
of the policy is to ensure that any additional services provided
by the external auditor do not impact the independence and
objectivity of the external audit process. The policy clearly
outlines the services which can be provided by the external
auditor and those which are specifically excluded. It also
outlines the engagement fee levels and those which require
pre-approval from the Committee. It has been adopted to
ensure the external auditor is only appointed where it is the
most suitable supplier of that service. During the year the
external auditor undertook the role as Reporting Accountant,
which is an FRC-permitted whitelisted service, and also
performed a limited scope agreed upon procedures
engagement related to the Group’s consolidated interim
statements. The Committee satisfied itself that the external
auditor was able to undertake these services without
impacting its independence.
Audit and Risk Committee effectiveness
During the year, the Committee’s effectiveness was reviewed
as part of the annual Board performance review. The review
concluded that the Committee operated effectively, with
continued focus planned on technology risk oversight as
the Group becomes more digitally enabled. Subsequent to
the year end, the Board conducted an external effectiveness
review. Further information on this year’s review can be found
on page 92.
Audit and Risk Committee minimum standards
The Committee has applied the requirements of the FRC’s
Audit Committees and the External Audit: Minimum Standard
as incorporated within the UK Corporate Governance Code.
During the year, the Committee undertook activities relating
to auditor appointment and tendering, audit quality, auditor
independence, effectiveness assessments, non-audit services,
engagement with the external auditor and oversight of the
audit process. The Committee is satisfied that its activities
during the year were consistent with the requirements of the
Minimum Standard.
The Committee seeks to ensure sufficient rigour and
independence in the external audit process, including through
oversight of audit planning, audit quality, auditor independence,
non-audit services and the effectiveness of the audit process.
The Committee also welcomes feedback from shareholders and
is available for discussion of any matters of interest or concern.
There were no shareholder requests for specific matters to be
covered in the audit during the year and there were no regulatory
inspections of the quality of the Company’s audit. An explanation
of the application of the Group’s accounting policies is provided
in note 2 to the financial statements.
What the Committee will do in 2027
During the year ending 30 June 2027, the Committee will
build on its focus during the year ended 30 June 2026 and to
discharge its responsibilities as set out in its terms of reference.
The Committee will continue to monitor emerging and maturing
risks and will oversee the continued development of the Group’s
control environment. This will include oversight of improvements
to internal controls, taking into account the revised UK Corporate
Governance Code and the preparation required for the Provision
29 material controls declaration for financial years beginning on
or after 1 January 2026. The Committee will continue to monitor
instances of fraud and the effectiveness of controls across the
business. It will also support the development of the Group’s
climate-related scenario planning and reporting, including
consideration of relevant FRC expectations, and will maintain
a focus on cyber security, resilience and IT governance through
the internal audit plan for FY27.
Approval
The members of the Audit and Risk Committee have reviewed
the financial statements and the content of the draft Annual
Report and Financial Statements to ensure that they are fair,
balanced and understandable and, accordingly, the Audit and
Risk Committee resolved to recommend that the Board makes
the Directors’ Responsibilities Statement set out on page 113.
Joanne Shaw
Audit and Risk Committee Chair
24 September 2026
CVS Group plc
Annual Report and Financial Statements 2026
87
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Strengthening governance
and Board effectiveness
Introduction
On behalf of the Board, I am pleased to present the
Nomination Committee Report for the year ended 30 June
2026. The Committee plays a key role in ensuring that the
Board and its Committees maintain the appropriate balance
of skills, experience, independence and diversity required to
support the Company’s long-term strategy and sustainable
success. We recognise that effective governance begins with
strong leadership and a Board that is equipped to oversee the
opportunities and risks facing the business in an increasingly
dynamic operating environment.
Board succession and appointments
The Committee adopts a formal and transparent procedure
for the appointment of Directors to the Board. External
consultants are used to assist in identifying suitable
candidates for Non-Executive roles, as well as for Executive
roles. A written specification is produced for each appointment.
The Chair is responsible for providing a shortlist of candidates
for consideration by the Nomination Committee which then
makes its recommendation to the Board for final approval.
The Nomination Committee is led by the Senior Independent
Director (SID) when dealing with the appointment of a
successor to the Board Chair.
Following the move to the Main Market of the London Stock
Exchange, having been advised that such was normal practice
for companies on that market, David assumed the role of Chair
of the Nomination Committee with effect from 1 April 2026.
Independent Non-Executive Directors
Retirement of Deborah Kemp
Deborah Kemp, who joined the Board in January 2018 and who
has served as SID, Employee Engagement Director, Chair of the
Remuneration Committee and Interim Chair, retired and stepped
down from the Board and all Board Committees on 30 June 2026.
Appointment of independent Non-Executive Directors
The Board is committed to ensure appropriate diversity across
its roles and signalled in the 2025 Annual Report its appetite
to make further appointments to the Board. In light of this and
the retirement of Deborah Kemp, the Nomination Committee
appointed the external recruitment consultant Odgers to
undertake a search resulting in the appointment of Helen Keays
and Jane Bednall on 1 April 2026 and Laura Hagan on 1 May
2026. Odgers has no other connection with the Company or
individual directors.
From the date of her appointment, Helen Keays became Chair
Designate of the Remuneration Committee and also a member
of the Group’s Audit and Risk Committee and Nomination
Committee. Helen formally became Chair of the Remuneration
Committee with effect from 1 July 2026.
David Wilton
Nomination Committee Chair
The Nomination Committee is responsible for reviewing
the structure, size and composition, skills, independence,
knowledge and experience, of the Board. It is also
responsible for the co-ordination of the annual evaluation
of the performance of the Board and of its Committees,
and for ensuring appropriate succession plans are in place.
All Directors engage in the evaluation and appropriate
action is taken in light of the assessment.
The Committee is responsible for making recommendations
to the Board on all Board appointments and on the succession
plans for both Executive Directors and Non-Executive Directors.
The Committee’s roles and responsibilities are covered in its
terms of reference which are available on our corporate website
www.cvsukltd.co.uk/investor-centre/corporate-governance/.
Committee composition during the year
to 30 June 2026
David Wilton (Nomination Committee Chair with effect
from 1 April 2026)
Richard Gray (Nomination Committee Chair until
31 March 2026)
Deborah Kemp (resigned 30 June 2026)
Joanne Shaw
Helen Keays (appointed 1 April 2026)
Jane Bednall (appointed 1 April 2026)
Laura Hagan (appointed 1 May 2026)
The Committee member attendance table is shown on
page 67. In addition to formal meetings during the year,
there were regular informal discussions on succession plans
and appointments at the Senior Leadership Group level.
Nomination Committee report
CVS Group plc
Annual Report and Financial Statements 2026
88
From the date of their appointments, Jane Bednall and
Laura Hagan became members of the Group’s Remuneration
Committee, Audit and Risk Committee and Nomination Committee.
Laura Hagan became SID and Employee Engagement Director
with effect from 1 July 2026.
Director biographies are shown on pages 70 and 71.
Executive succession
On 30 March 2026, Richard Fairman announced his intention
to retire after seven years at CVS including six years as CEO.
Richard remains in post and committed to the role of CEO
until an appropriate successor is appointed with a sufficient
handover period.
The Committee has appointed independent search firm
MWM Consulting to support with the process. MWM Consulting
has no other connection with the Company or individual directors.
Following the year end, on 22 July 2026, the Committee
approved the setting up of a sub-committee consisting of
David Wilton, Joanne Shaw and Laura Hagan to manage the
CEO succession process referred to herein.
Broader succession planning
The Committee has spent a significant amount of time
considering Board succession planning during the year, and
engaged the support of Odgers to conduct a talent mapping
review for the CEO as part of its routine succession planning.
Its report was presented to and considered by the Nominations
Committee in November 2025.
The Committee also reviewed the succession plans for the
wider Senior Leadership Group consisting of 37 members, to
ensure there continues to be the development of a high-calibre
and diverse pipeline for succession to the Board and Executive
Committee across immediate, short and longer-term timescales.
In doing so, it emphasises the importance of identifying
candidates who will support delivery of CVS’s strategy, as
well as increasing the diversity of the Board.
In light of this review, it was identified that the role of Chief
Client Officer would augment the current Executive Committee
and support the delivery of CVS’s strategy. The role would be
responsible for developing the customer strategy that will drive
revenue growth via customer engagement and satisfaction.
CVS has appointed independent search firm Fortune Hill to
undertake a search for this role.
Board composition and skills
The Committee reviewed a skills matrix which captured the core
skills, knowledge, experience and diversity represented by the
Board members. Our skills matrix explicitly identifies technology,
brand development and mergers and acquisitions and in 2026
we added additional skillsets of AI, cyber and digital to support
succession planning and ongoing oversight of the Group. This
skills matrix provided a framework for considering the skills to
focus on when preparing role specifications and evaluating
potential new Board candidates. Our current Board members
each bring a broad range of individual skills, knowledge and
experience. A summary of the skills of our Directors is shown
on page 67.
Conflicts of interest
The Board has established robust procedures for monitoring
conflicts of interest in accordance with the Group’s Articles of
Association and conflicts of interest policy. All Directors are
required to make the Board aware of any other commitments
and potential conflicts of interest are approved by the Board
where appropriate, and recorded in the conflicts register. The
Board has delegated authority to the Nomination Committee to
keep under review any actual or potential conflict of interest
situations authorised by the Board, and to determine whether
it is appropriate for such matter(s) to remain so authorised.
During the financial year to 30 June 2026, the Committee
noted that none of the Directors have interests or external
appointments which gave rise to material conflicts of interest.
Board evaluation
The Committee scrutinises the performance of the Executive
Directors, taking into account the performance of the business
against agreed plans. The Nomination Committee also considers
the other commitments of Directors and is satisfied that all
Directors devote appropriate time to the Group’s affairs.
The Committee undertook an external Board effectiveness
review in August 2025. The Committee was satisfied that the
Board remains effective and has the right balance of skills
and experience to provide continued effective stewardship
of the Group.
Gould Consulting was appointed to undertake the external
Board effectiveness review in 2025 following a tender process.
The Committee considers the advice that it receives from
Gould Consulting to be independent. There are no relationships
between Gould Consulting and either the Company or individual
Directors to be disclosed.
Find out more about the external Board review on page 92.
CVS Group plc
Annual Report and Financial Statements 2026
89
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Diversity and inclusion
Appointments to the Board and its Committees, as with other positions within the Group, are made on merit according to the
balance of skills and experience offered by prospective candidates. As a Company, we acknowledge the benefits of diversity in
terms of business experience and individual appointments are made irrespective of personal characteristics such as race, religion
or gender. The Committee will always seek to appoint the candidate with the most appropriate skills and experience.
CVS’s Equity, Diversity and Inclusion policy sets out our support for diversity. We actively support a culture of inclusion, to ensure
that all our employees are valued and treated with dignity and respect. We recognise that for the business to continue to be
successful we must ensure that we can recruit from as wide a pool of talent as possible. This policy is to treat all employees fairly
and equally, regardless of gender, sexual orientation, marital status, race, colour, nationality, religion, ethnic or national origin, age,
disability or union membership status and we do not have a separate formal policy for the Board and its Committees as the
all-employee policy is applicable.
As at the date of this report, women represent 44.0% of our Board, above the gender diversity target of 40.0% set out in the UK
Listing Rules. Further analysis of employees by gender is provided in the Strategic Report on page 66. We satisfy the Parker Review
recommendation to have at least one Board Director from an ethnic minority background.
The Company meets all three targets on Board diversity set out in UK Listing Rule 6.6.6(9) being:
I.
at least 40.0% of the individuals on its Board of Directors are women (44.0%);
II. at least one of the senior positions on its Board of Directors is held by a woman (Laura Hagan holds the role of SID); and
III. at least one individual on its Board of Directors is from a minority ethnic background.
In line with UK Listing Rule 6.6.6(10) requirements, the table below sets out numerical data on the ethnic background and gender
identity of the Company’s Board, Executive Committee and Senior Leadership Group as at the year end.
Number of
Board
members
Percentage
of Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
Committee
Percentage
of Executive
Committee
Number in
Senior
Leadership
Group
Percentage
of Senior
Leadership
Group
Gender identity
Men
5
56%
3
3
75%
18
49%
Women
4
44%
1
1
25%
19
51%
Not specified/prefer not to say
—
—
—
—
—
—
—
Ethnic background
White British or other White
8
89%
3
3
75%
21
57%
Mixed/multiple ethnic groups
1
11%
1
1
25%
2
5%
Asian/Asian British
—
—
—
—
—
—
—
Black/African/Caribbean/Black British
—
—
—
—
—
—
—
Other ethnic group
—
—
—
—
—
1
3%
Not specified/prefer not to say
—
—
—
—
—
13
35%
Approach to collating diversity data: data is from our employee database containing all permanent colleague details as at 30 June 2026.
Diversity information for ethnicity is based on voluntary self-declaration.
Electing and re-electing Directors
The Committee has reviewed the independence of the Non-Executive Directors and the Chair and concluded that all have sufficient
time to meet their Board responsibilities in accordance with the criteria set out in the UK Corporate Governance Code. The Committee
has also satisfied itself that all five Non-Executive Directors are independent.
The Committee will recommend to the Board and the shareholders that all serving Directors, including Richard Fairman, CEO,
unless a successor has appointed, should be submitted for re-election at the Company’s 2026 AGM.
David Wilton
Nomination Committee Chair
24 September 2026
Nomination Committee report
continued
CVS Group plc
Annual Report and Financial Statements 2026
90
Director appointment process
When making a new appointment, the Committee takes the following steps:
1. Define
recruitment
criteria
Identify and articulate
objectives and
criteria based on its
Board composition
reviews and
succession planning.
5. Recommend
Agree a
recommendation for
appointment to the
Board, taking
account of matters
such as gender,
social and ethnic
backgrounds and
cognitive and
personal strengths.
2. Appoint
external
consultant
Engage an executive
search consultant to
provide a diverse
array of candidates
for consideration.
4. Assess
Assess each
candidate’s existing
skills, experience and
time commitments,
as well as any
potential for actual
conflicts of interest.
Following appointment, all Directors receive a comprehensive and tailored induction programme. All newly appointed
Directors are required to devote the time required to complete the induction programme. The time commitments are set out
in their respective letters of appointment. Induction programmes are designed by the Company Secretary in conjunction
with the Chair, Senior Independent Non-Executive Director and Chief Executive Officer.
Induction programmes are varied and include a selection of:
Meetings with the Board
One-to-one meetings with the Executive Directors, Non-Executive Directors, and the Group
General Counsel and Company Secretary.
Meetings with the
Executive Committee
and senior management
One-to-one meetings with members of the Executive Committee, as well as meetings with
key members of senior management from a variety of departments and business units,
with the content of meetings varying depending on the Director being inducted and their
background and individual experience.
Meetings with the auditor
Meetings with the internal and external audit partners (particularly for newly appointed
Directors who are members of the Audit and Risk Committee).
Self-study
Documents provided via the electronic Board portal covering key information relating to
the Group including financial performance, Board policies and procedures and governance
matters. These documents are also available to all other Board members as continuing points
of reference.
Site visits and workforce
engagements
Visits to key operational sites, offering a chance to meet the workforce. Directors continue
to make regular site visits throughout their tenures, gaining valuable insight into operations
and feedback from the workforce.
Meetings with key
shareholders and
stakeholders
Supported by the Chair and the Company Secretary, the induction programme will, as
appropriate, include a schedule of meetings with major shareholders and key stakeholders
in order to support newly appointed Directors’ understanding of shareholder and
stakeholder views, and the discharge of their Directors’ duties under Section 172 of the
Companies Act 2006.
Education and training
If any gaps in skills or experience are identified within the interview process, internal and
external training will be provided and tailored to the needs of the Director. Directors engage
in an ongoing programme of education and training throughout their tenures to continually
enhance their knowledge and skills. This is reviewed as part of the annual Board evaluation.
3. Shortlist and
interview
Shortlist candidates
and conduct
interviews.
Director induction
CVS Group plc
Annual Report and Financial Statements 2026
91
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Nomination Committee report
continued
Board effectiveness
An evaluation of the Board and its Committees is undertaken
each year. This process helps to ensure that the Board and its
Committees operate effectively, information supplied to Board
and Committee meetings is appropriate, Directors spend
sufficient time discussing key issues, the Board has the
appropriate composition, and succession plans are in place.
The Board engaged Gould Consulting to undertake an
external evaluation of the Board and its effectiveness in
July and August 2025 with the findings presented to the
Nomination Committee at its meeting on 6 October 2025.
The Chair engages with each individual Director during
the year to discuss their contribution and the Chair and
Non-Executive Directors meet separately each year
without the Executive Directors present.
The Senior Independent Director at the time, undertook
a review of the Chair’s contribution during August 2025
with input from the other Directors. A similar review
will be undertaken internally each year.
External assessment undertaken in August 2025
The findings of this exercise were that the Board and its
Committees were considered effective and well functioning
with a collegiate and generally effective dynamic. This external
review of Board effectiveness involved a number of elements:
•
tailoring the scope of the review to CVS through
discussions with the Chair and Company Secretary;
•
review of previous Board and Committee papers;
•
attendance at the Board and Remuneration Committee
meetings held in July 2025 to observe Board discussions
and interactions;
•
completion of tailored and comprehensive questionnaires
by each individual Director and the Company Secretary;
•
completion of a tailored questionnaire by members of the
Executive Committee;
•
individual interviews with the Directors and members
of the Executive Committee and Company Secretary;
•
preparation of a detailed draft report for discussion
with the Chair and Company Secretary;
•
final report setting out recommendations; and
•
discussion of key findings with the Nomination Committee.
Recommendations, which were endorsed by the Nomination Committee were made to further enhance Board effectiveness
and the actions taken during the year ended 30 June 2026 are:
Proposal
Recommendations arising
Actions taken to address
Undertaken an
external evaluation
of the Group’s
evolved strategy to
ensure it is
appropriate
•
Conduct a comprehensive market
review, addressing competitive
landscape, geographies, competitors,
identify emerging trends, strategic
challenges and opportunities.
•
Addressed in Q1 2026 through detailed review
of strategy undertaken with external strategy
consultant OC&C.
•
Revise three-to-five-year goals
and milestones.
•
Revised five-year plan developed.
Re-orienting Board
conversations onto
matters of more
strategic nature
•
Signposting of key topics for discussion.
•
Now using a key topics document for all papers with
succinct summary front sheets.
•
Reshaping the agenda to capture
strategic topics.
•
Reviewed the 2026 corporate calendar to plan for and
allocate future agenda times for strategy matters.
Guests addressed by reference to strategic issues
and discussion rather than “standard” attendees.
•
Scheduling sessions in 2026 assessing:
1) How consistently values (not simply culture
)
are embedded, and actions to improve;
2) Material risks; and
3) Executive talent and succession planning.
•
Review presentation approach by
Executive Committee at Board and
Committee meetings.
•
More focus on taking papers as read/verbal updates
to emphasise key strategic issues and themes.
•
Add strategy-based dinners to
corporate calendar.
•
Dates have been added to calendar.
•
Line manager of any staff members
attending Board meeting to also attend
Board meeting.
•
Process in place as appropriate for future meetings.
Planning for
successful Board
transitions
•
Review induction process for new NEDs
ahead of joining.
•
Document prepared setting out planned timetable,
materials, briefings and inductions completed for the
new NEDs appointed in the year.
CVS Group plc
Annual Report and Financial Statements 2026
92
Maintaining remuneration
policies in line with best practice
Helen Keays
Remuneration Committee Chair
The Committee meets frequently throughout the year to
consider remuneration matters of the Group, including
assisting the Board in ensuring appropriate remuneration
policies are in place, ensuring Executive Director
remuneration is aligned to the strategic priorities of the
Group and its performance, assessing feedback from
shareholders on remuneration matters and making
appropriate recommendations to the Board.
Following its move to the Main Market in January 2026,
CVS Group plc is required to comply with Schedule 8 of the
Large and Medium-sized Companies and Groups Accounts
and Reports Regulations 2008. The information sections
which are subject to audit are highlighted.
The Committee’s roles and responsibilities are covered in its
terms of reference which are available on our corporate website
www.cvsukltd.co.uk/investor-centre/corporate-governance/.
Committee composition during the year
to 30 June 2026
Helen Keays (appointed 1 April 2026, Remuneration
Committee Chair with effect from 1 July 2026)
Deborah Kemp (resigned 30 June 2026,
Remuneration Committee Chair until 30 June 2026)
David Wilton
Richard Gray
Joanne Shaw
Jane Bednall (appointed 1 April 2026)
Laura Hagan (appointed 1 May 2026)
The Committee member attendance table is shown on page 67.
Remuneration Committee report
Introduction
As Chair of the Remuneration Committee, I am delighted
to present our Directors’ Remuneration Report for the year
ended 30 June 2026.
The report is split into three sections:
• this introductory statement;
•
the Directors’ Remuneration Policy (the Policy) which
is subject to a binding vote at the 2026 AGM; and
•
the Annual Report on Remuneration (the Report) which
is subject to an advisory vote at the 2026 AGM.
These reports are unaudited unless otherwise stated.
Policy review
The current Policy was approved by way of an advisory
vote at the 2025 AGM with 83.1% of votes in favour, with
the Remuneration Report approved with 77.7% of votes in
favour. The status of this vote was advisory as the Company
was then AIM-listed.
In accordance with the UK Corporate Governance Code the
Company engaged with the minority of shareholders who voted
against the resolution to understand their concerns. The issues
raised were covered and subsequently addressed as part of the
wider consultation referred to below. The Company provided
further explanations and information to address some of the
issues raised.
CVS has over many years applied high governance standards
and many of these Main Market-level requirements had already
been addressed in our 2025 Policy. Following the transfer of the
Company’s shares from AIM to the Main Market in January 2026
the Policy was reviewed in light of the additional governance
and regulatory requirements which are now directly relevant for
the Company. These include a requirement for a binding Policy
vote at the first AGM after re-listing on the Main Market which
will be held at the 2026 AGM in November 2026.
The new Policy is set out on pages 97 to 102 and was the
subject of a comprehensive review and shareholder engagement
which covered almost two-thirds of the share register. A priority
of the review was to ensure that remuneration practices support
management retention and the meeting of the Company’s near
and long-term objectives and that they remain competitive and
proportionate. The Committee was mindful that the size and
scale of the business has continued to increase and with it the
roles and responsibilities of the Executives. Over the past five
years, our revenues have increased 39.7% (CAGR 6.9%),
adjusted EBITDA 45.1% (CAGR 7.7%), adjusted profit before tax
28.2% (CAGR 5.1%) and cash generated from operations 27.0%
(CAGR 4.9%), with over 1,000 more colleagues within the Group.
The geographic scope has also increased with our expansion
into Australia.
CVS Group plc
Annual Report and Financial Statements 2026
93
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Introduction
continued
Policy review
continued
To support this review, the Committee commissioned a full
benchmarking exercise covering similar sized Main Market
companies in the second half of calendar year 2025. Following
this review, the Committee recognised it was necessary to adjust
some elements of remuneration alongside implementing close
compliance with Main Market requirements and expectations.
In summary, the changes which are proposed to the Policy are:
•
alignment of Executive Directors’ pension provision with the
UK workforce (including for existing Executive Directors)
(Provision 39). This reduces current pension contributions
for Executive Directors to £2,700 per annum, from £40k
for the CEO, £27k for the CFO and £23k for the CVO;
•
no change to the maximum annual bonus in the Policy, but
the intention to operate FY27 bonuses and beyond at the
maximum level under the existing Policy (150% base salary);
• introduction of annual bonus deferral so that 50% of any
bonus earned is deferred for two years (33% of any bonus
if the shareholding guideline has been met);
•
normal LTIP annual award policy to increase to 200% of
salary, which is the intended grant level for FY27, with the
exceptional limit increased to 300% of salary per annum.
In accordance with the new Executive Share Plan, LTIPs have
been renamed Executive Share Plans (ESPs) in the remainder
of this report; and
• introduction of a post-cessation shareholding requirement from
1 July 2026 which applies for two years at the lower of holding
on departure and the in-employment shareholding requirement
of 200% base salary. Shares owned prior to 29 January 2026
(move to the Main Market) and shares purchased from own
funds will be excluded from this obligation.
The Committee believes that these changes, alongside the salary
adjustments discussed in more detail below are necessary to
ensure the overall Executive Director packages have appropriate
scope to be retentive and provide optimal incentivisation to
deliver our long-term growth prospects without creating undue
risk in our approach. The changes are considered to represent
balanced progression with the increase in incentive potential
aligned to longer time horizons until value can be realised. The
Committee will continue to monitor the operation of the Policy.
Executive Director changes
As shared on 30 March 2026, Richard Fairman announced an
intention to retire from the Board for personal reasons in due
course. He remains in post until a successor is appointed and
an orderly handover is implemented. As he remains in post and
not formally under notice he will continue to be subject to our
Policy in the same way as other Executives. We intend to
provide an update on the remuneration arrangements for
Richard’s leaving arrangements and the terms of any successor
at the appropriate time; those remuneration arrangements will
also be reflective of our Policy.
Year in review
The current year showed continued positive momentum against
our strategic goals with growth in revenue (+5.9%), adjusted
EBITDA (+5.1%), and adjusted EPS (+6.9%). This year marked
the conclusion of the Competition and Markets Authority (CMA)
market investigation into the veterinary sector with remedies we
find mostly acceptable. The Company made good progress with
its acquisition strategy in Australia with a further six completed
acquisitions comprising 14 practice sites for initial consideration
of £45.8m, including the purchase of a minority interest in the
year. Australia now represents c.11% of Group revenue and
c.15% of Group adjusted EBITDA.
The 2026 annual bonus had a maximum of 100% of salary and
was subject to adjusted EBITDA (80% weighting) and non-
financial (20% weighting) measures. The Committee assessed
performance against the target range and details of this are set
out on page 104. In summary, adjusted EBITDA performance
was below the threshold and therefore no bonus was payable.
The ESP award granted in 2023 was subject to adjusted EPS
growth (50% weighting) and relative total shareholder return
(TSR) (50% weighting
) measures which had a performance
period ending 30 June 2026. The outcome of assessing
performance against the targets was that neither threshold
had been met and so the award will lapse in full.
The Committee has not used any discretion in approving the
final outcomes for FY26 incentives.
The Committee made ESP awards in July 2025 for the three-year
performance period to 30 June 2028. The Committee brought
forward the issue from the normal October issue date due to the
CMA extending its timetable of the review into the veterinary
sector. The timing of the CMA announcement may have created
complications in relation to the timing of ESP grants during
calendar Q4 2025. The Committee issued awards to the CEO,
CFO and CVO of 200% of their base salary, the maximum
amount specified under our then policy, to incentivise the
Executive Directors over the medium term and align their
interests with shareholders and the Group. The Committee
determined to make awards above the then normal award level
(125% for CEO and 100% for CFO and CVO of base salary) to
provide enhanced incentivisation and to aid retention of its
Executive Directors in light of the uncertainty created by the
extended CMA investigation and its impact on the Company
and in-flight ESP awards.
CVS Group plc
Annual Report and Financial Statements 2026
94
Share ownership across our colleagues
CVS is a proud advocate of employee share ownership.
The Board believes this supports colleagues sharing in CVS’s
success, being owners of our business, and aligns with our
shareholders’ interests.
The Group operates a savings scheme for all colleagues,
including the Executive Directors, being the CVS Save As
You Earn (SAYE) plans. Across our UK colleagues, around
2,500 colleagues hold over £14.0m of SAYE options in our
CVS SAYE plan.
The Committee is pleased that despite the external economic
environment the take-up of its latest SAYE scheme remained
strong with 1,491 colleagues subscribing.
In light of the competitive landscape and the continued
shortage of veterinary professionals in the UK and Australia,
the Committee in support of the Board will continue to consider
rewards and benefits across the Group to ensure that CVS
remains well positioned to attract and retain talent.
Directors’ remuneration in respect of 2026/27
Annual salary
As a reminder, the pay review in July 2025 resulted in no
salary increase for Executive Directors (wider workforce 4.5%).
As part of the comprehensive Policy review during 2026, the
Committee considered the appropriate pay positioning of
Executive Directors.
Base salaries have not kept pace with the size and scale of
the business, especially since moving to the Main Market.
Taking these factors into account, the Committee believes
that corrective action is now necessary. However, given the
materiality of the changes required, the Committee felt it was
better that these uplifts to base salaries should be phased
across two years. As such, the CEO base salary is increased
to £570,000 (c.16%), the CFO base salary is increased to
£385,000 (c.14%) and the CVO base salary is increased to
£345,000 (c.19%) from 1 July 2026.
Further increases (of similar growth levels to this year) may
also be applied from 1 July 2027 to complete the corrective
positioning but only if individual and corporate performance
warrants the increase at the time.
The Committee is mindful that when looking at salaries in
isolation the increases are higher than the general average
workforce increase of 3.6% for 2026/27, and moving beyond
employee-level increases is not a matter the Committee
undertakes lightly at any time. The Company’s outlook is to
maintain a costs-focused approach on remuneration (see the
Executive Directors’ pay freeze in 2025/26 when employees
received 4.5%, and also the recent change on pensions which
has currently capped all Executive Directors’ pensions at
£2,700 per annum). However, it is considered appropriate to
make the change on our Executive Directors’ base salaries at
this time to recognise the increasing size and complexity of the
business as well as the competitive environment in which we
recruit and retain talent.
As shown in the following chart, the first stage of the increases
results in an improved, but still modest, position for base salaries
against the interquartile range of the benchmark peer group
1
.
Base salary
£400
£350
£300
£250
£600
£550
£450
£500
Remuneration £’000
£700
£650
CEO
CFO
CVO*
Salary
UQ
Median
LQ
CVS proposed
CVS current
*
For illustrative purposes, the CVO pay position is also shown against
the CFO peer data as there are insufficient reference points to show a
robust role specific benchmark.
The proposed increases were part of the overall Policy
engagement process with shareholders. Following feedback,
the Committee reiterated that any second stage increase was
subject to performance and broader circumstances allowing
for it.
Annual bonus
The annual bonus scheme in which the Executive Directors
participate is based on a combination of financial and
non-financial targets. For 2026/27 the bonus will be
assessed against:
• adjusted EBITDA growth 20.0% weighting;
•
adjusted EPS growth 20.0% weighting;
•
return on capital employed (ROCE) 20.0% weighting;
• free cash flow per share growth 20.0% weighting;
• like-for-like sales growth 5.0% weighting;
•
employee Net Promoter Score 5.0% weighting;
•
client Net Promoter Score 5.0% weighting; and
• reduction in carbon 5.0% weighting.
The widening of measures was considered appropriate to
ensure performance is assessed on a rounded basis and was
reflective of shareholder feedback in the Policy engagement.
For the year ended 30 June 2027, the maximum bonus for the
CEO, CFO and CVO is 150.0% of salary, with 50.0% of any
bonus deferred for two years. The Committee considered the
quantum of the bonus as appropriate in the light of changes
made to base salaries, the introduction of bonus deferral and
better alignment with the median of the benchmark peer group.
1.
A broad range of animal health companies, human health companies and consumer or support service multi-site operators of a broadly comparable
scale: Pets at Home, Hays, Spire Healthcare, ME Group, Zigup, Mitie, Mitchells & Butler, Genus, Indivior, SSP Group, Uniphar and Johnson Service.
CVS Group plc
Annual Report and Financial Statements 2026
95
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Introduction
continued
Directors’ remuneration in respect of 2026/27
continued
Long-term incentives (Executive Share Plans)
For 2026/27 the proposed award levels will be 150% for the
CFO/CVO. The Committee intends to grant the CEO an award of
200% of salary if at the time of the award, the CEO recruitment
process remains ongoing. The Committee intends to grant the
awards following the AGM in November 2026. The Committee
considered the award levels appropriate when compared to
Main Market peers and the need to support retention and
incentivisation. Awards vest after three years subject to
performance and continued service with an additional
two-year post-vesting holding period.
Awards remain subject to a relative TSR measure (50%
weighting) and adjusted EPS growth (50% weighting)
measures. The targets are set out on page 105.
Total remuneration
The Committee is aware that the changes noted above represent
a notable potential increase in total remuneration (total fixed pay
plus on-target bonus plus fair value of ESPs). However, they
are considered to be reasonable when compared to market
benchmarking. The chart below shows overall pay positioning
against a pan-sector group of 40 companies (+/
-20 companies
above and below CVS six-month average market capitalisation
as at 30 June 2026). For CVS this positioning also reflects the
current reduced pension levels at £2,700 per annum (6% of the
of annual base salary between £6,000 and £50,000).
£1,200
£1,000
£800
£600
£2,000
£1,800
£1,400
£1,600
Total remuneration £’000
£2,400
£2,200
CEO
CFO
CVO*
UQ
Median
LQ
CVS proposed
CVS current
*
For illustrative purposes, the CVO pay position is also shown against
the CFO peer data as there are insufficient reference points to show a
robust role specific benchmark.
Chair fees
The Committee also reviewed the Chair fee during the year and
approved an increase to £220,000. The fee is considered to be
appropriate as evidenced by the chart below which is based on
the same pan-sector group of twelve companies as used for the
Executive Director total remuneration benchmarking.
£50
£0
£250
£200
£100
£150
Remuneration £’000
£350
£300
Chair
UQ
Median
LQ
CVS proposed
CVS current
Gender pay gap
In our latest Gender Pay Report, published in April 2026,
our median gender pay gap remained stable at 37.9% (from
37.6% in 2025), reflecting a declining picture over the past
four years. This longer-term reduction trend in the pay gap
is supported through our ongoing Equity, Diversity and
Inclusion initiatives, opportunities for career development
for all colleagues, and improved pay transparency through
our published salary ranges.
https://www.cvsukltd.co.uk/careers/gender-pay-gap-report/
Supporting our colleagues
It is very important to us to recognise the dedication and
professionalism of colleagues as they continue to work
tirelessly to ensure CVS gives the best possible care
to animals.
FY26 has been a challenging year, with the continued
uncertainty brought on by the Competition and Markets
Authority Market Investigation and sustained weakness in
the macro-economic environment. Our focus throughout
has been to protect jobs and focus on the long-term growth
that can be delivered.
Despite this backdrop, the Remuneration Committee, in
conjunction with the Board, approved an annual colleague
pay review effective from 1 July 2026 which allowed local
leaders the autonomy to make pay decisions based on both
market rate and the colleague’s individual performance.
Read more about our people and culture
on
pages 28 to 31
The Chair fee increase is lower than originally planned and was
revised following shareholder feedback. The fee will be
reviewed again in 2027.
Non-Executive Director fees
The Non-Executive Director base fee increased to £59,500,
with additional responsibility fees of £12,000 for undertaking
the Senior Independent Director role, £10,000 for undertaking
the Employee Engagement Director role and £12,000 for
chairing a Board Committee.
Concluding remarks
The Committee believes that the proposed Policy and its
intended operation for 2026/27 are appropriate in the context
of the size and scale of the Executive roles and are reflective
of Main Market practice and investor expectations. We look
forward to receiving shareholder support for the Remuneration
Policy and Report resolutions at the 2026 AGM, alongside
resolutions on the Adoption of the new SAYE plans and
Executive Share Plans which were last voted on in 2017. I very
much welcome any feedback or comments on the Directors’
Remuneration Report. I can be contacted via the following
email address: company.secretary@cvsvets.com.
Helen Keays
Remuneration Committee Chair
24 September 2026
CVS Group plc
Annual Report and Financial Statements 2026
96
Directors’ Remuneration Policy
This part of the Directors’ Remuneration Report sets out the
detailed Remuneration Policy of the Company with regard to its
Executive and Non-Executive Directors. The Policy will be put to
a binding shareholder vote at the 2026 AGM and is intended to
operate for a three-year period.
Purpose and strategic rationale for remuneration
policies and structures
The Group’s Remuneration Policy is designed to ensure that it can
attract, retain and motivate Executives and senior management
of the right calibre to enable it to fulfil its strategic objectives
and deliver long-term sustainable growth. The retention of key
management and the alignment of management incentives with
the creation of shareholder value are key objectives of this
Policy. In addition, the Committee seeks to keep Executive
Director remuneration aligned with the Company’s culture and
values and to take account of the effects of Executive Directors’
remuneration on the workforce and other stakeholders.
A significant proportion of total remuneration is performance-
based using structures which are common among Main Market
companies including bonus deferral and the annual grant of
performance shares. This aids discussion with shareholders
and proxy agents for whom the structures are familiar. The
Group’s strategy is set out on pages 16 and 17 and is designed
to enable the business to grow both its revenues and profitability.
We seek to provide the best clinical care, to create a great place
to work and have a career and to provide great facilities and
equipment. We take our environmental, health and safety,
people and professional responsibilities seriously.
We believe these policies help the Company to continue to grow
profitably through the successful execution of its strategy as
well as providing alignment between the interests of
shareholders and all employees who can share in the
Company’s success.
Purpose and link to strategy
Operation
Potential remuneration
Performance metrics
Base salary
Base pay is designed to reflect
Executive Directors’ experience,
capabilities and role within
the business.
To be set at a level which is
sufficiently competitive to recruit
and retain individuals of the
appropriate calibre to deliver
the Group’s strategy.
Salaries are reviewed periodically and
benchmarked against listed Main Market
companies of similar size and complexity.
The review takes into account:
• Company performance and increase in scale
and complexity;
• the role, experience and performance of the
individual Director; and
• average workforce salary adjustments within
the Company.
Salaries are normally reviewed, but not
necessarily increased, annually.
The actual base salaries
paid to the Executive
Directors and those
set for the current year
are disclosed in the
Remuneration Report.
Annual increases will
normally be in line with
the average increase
for employees except in
exceptional circumstances,
including but not limited
to a change in the
scope and scale of
the organisation,
change in role, the
need for accelerated
pay progression,
internal differentials
and external relativities.
Not applicable.
Benefits
To complement base salary by
providing market-competitive
benefits to attract and retain
Executive Directors.
Reviewed from time to time to ensure
that benefits, when taken together with
other elements of remuneration, remain
market competitive.
Benefits for the Executive Directors currently
include the provision of a company car and
medical and life insurance.
Additional benefits may be provided within the
Policy for other reasonable business reasons
such as relocation, whether domestic or
international. Executive Directors are eligible to
participate in other benefit schemes, including
all-employee share schemes, on the same terms
as other employees.
The cost of providing
these benefits varies year
on year depending on
the schemes’ premiums.
The Committee monitors
the overall cost of the
benefits package.
Not applicable.
Pension
To provide retirement benefits
which, when taken together with
other elements of the remuneration
package, will enable the Company
to attract and retain appropriately
qualified Executive Directors.
Contribution or cash allowance in lieu (or a
combination) with the maximum value intended to
be in line with the average contribution available
to all employees.
Aligned to UK workforce
with a matched
contribution of up to
6.0% applied to salary
from £6,000 to £50,000.
Executive Director
pensions will continue to
align to any
developments in UK
workforce pensions.
Not applicable.
CVS Group plc
Annual Report and Financial Statements 2026
97
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Purpose and strategic rationale for remuneration policies and structures
continued
Purpose and link to strategy
Operation
Potential remuneration
Performance metrics
Annual bonus
To drive and reward
exceptional performance.
The Executive Directors are eligible to participate
in a discretionary, annual, performance related
bonus scheme. Targets are set at the beginning
of each year based on the recommendations
of the Committee linked to the strategic priorities
of the business at the time.
Half of any bonus payable will be deferred into a
Deferred Bonus Award, under the Executive
Share Plan, for a period of two years and then
issued as shares. The deferral requirement
reduces to 33.0% of the bonus if an Executive
Director has already met their shareholding
requirement.
Annual bonus payments are subject to malus
and clawback provisions as detailed on page 100.
The maximum bonus
potential for Executive
Directors is 150.0%
of salary.
Bonus awards are based on
annual performance against
stretching financial targets
and non-financial targets.
Targets are set by the
Committee at the beginning
of each year. The Committee
has the discretion to vary
targets and weightings from
year to year.
The level of payment
commences from zero at the
threshold target increasing
on a straight-line basis to full
payment at the maximum target.
Executive Share Plan (ESP)
(previously Long-Term Incentive Plan
(LTIP))
To drive and reward exceptional
performance over the medium
term and to align the interests
of Executive Directors
and shareholders.
The Executive Directors are entitled to be
considered for the grant of conditional awards
and nil-cost options (which can have a nil or
nominal exercise price) under the Group’s ESP
scheme, over a specified number of ordinary
shares, as well as a cash equivalent of either.
Awards are not transferable or assignable.
Awards vest after a performance period of three
years, subject to certain performance and service
conditions being met. There is an additional
two-year holding period for the awards for
Executive Directors, other than for settling related
tax liabilities.
On vesting, an amount equal to the dividends
paid by the Company over the performance
period (Dividend Equivalent) can be settled
through cash or shares.
Participation is at the discretion of the Committee.
Awards will typically be made annually based on
a percentage of annual salary.
The Committee would in
normal circumstances
expect to make annual
ESP awards to Executive
Directors of up to 200.0%
of base salary.
The maximum award
permissible under this
policy is 300.0% of base
salary per financial year,
not including Buy-Out
Awards referred to on
page 100 and Deferred
Bonus Awards referred to
above.
The vesting of ESP awards is
conditional upon the successful
achievement of performance
conditions over the performance
period, which are set at the grant
date of the award. Typically
25.0% of awards vest at
threshold performance.
Performance conditions and
weightings may be varied from
year to year but are likely to
include measures linked to the
Company’s strategic growth
objectives. Each year the
Committee assesses what
performance conditions and
associated weightings it considers
appropriate in supporting the
Company’s strategy and
longer-term objectives.
In addition, and irrespective of
the targets, no award will vest
unless, in the opinion of the
Committee, the underlying
performance of the Group has
been satisfactory over the
measurement period.
The Committee has discretion
to vary award vesting for
circumstances that were
unexpected or unforeseen at
the Grant Date and to override
formulaic outcomes.
Save As You Earn (SAYE)
To encourage all employees,
including Executive Directors, to
save and invest in the Company’s
shares in a tax-efficient way and
align interests of employees
and shareholders.
The Group operates a saving related share plan
for employees, including Executive Directors,
through the SAYE Plan, of which employees are
invited to participate in the plan annually. Awards
are made at a maximum 20.0% discount, or such
other percentage as permitted by the applicable
legislation from time to time, to the closing
mid-market price on the day before the invitation
date.
Maximum participation
level aligned to
HMRC limits.
Not applicable.
CVS Group plc
Annual Report and Financial Statements 2026
98
Purpose and link to strategy
Operation
Potential remuneration
Performance metrics
Shareholding guideline
To align interests of Executive
Directors with those of
shareholders.
Executive Directors are expected to build a
shareholding in the Company with a value equal
to a specified percentage of base salary within a
reasonable timeframe from their appointment
to the Board.
The Committee will monitor progress against
the guideline on an annual basis. It is expected
that the full guideline will normally be met within
five years of employment.
Shares acquired to the lower of actual holding and
the in-employment minimum requirement
shareholding of 200.0%, will be subject to a further
two-year post-cessation shareholding requirement.
Shares purchased from own funds, and shares
owned prior to 28 January 2026 will be excluded
from this obligation.
The target value to be
achieved for Executive
Directors is 200.0% of
base salary.
Not applicable.
Non-Executive remuneration
Fees are set at a level to attract and
retain high-quality and experienced
Non-Executive Directors at an
appropriate cost.
The Non-Executive Chair fee is set by the
Committee. It is an all-encompassing fee.
Non-Executive Directors fees are set by the Board
excluding Non-Executive Directors. They are paid
a basic annual fee. Additional fees may be paid to
Non-Executive Directors who chair a Committee,
act as a Senior Independent Director or undertake
other roles with additional responsibilities,
as appropriate. Fees are reviewed annually.
The Company’s approach to setting Non-
Executive Directors’ fees is by reference to fees
paid at similar companies and reflects the time
commitment and responsibilities of each role.
The Chair and the other independent
Non-Executive Directors are entitled to be
reimbursed for reasonable business expenses.
Fees are normally
reviewed, but
not necessarily
increased, annually.
There is no limit for fees
payable to the Non-
Executive Directors,
although the aggregate
fees are set in
accordance with the limit
set in the Articles of
Association (which,
adjusted for RPI inflation,
is currently £3.5m).
Not applicable.
Performance conditions explanation
Performance conditions applied to annual bonus and long-term
incentives are intended to support sustainable profitable growth
through the successful execution of strategy and to align
Executives to long-term Company performance and the
experience of shareholders.
Annual bonus targets are set for a one-year period and balance
financial and non-financial targets. The Committee chooses the
metrics for each performance period to reflect the strategically
important objectives at the time.
ESP performance conditions will include metrics which focus on
long-term sustainable growth. The measures and weightings
may vary for each award to reflect the priorities of the business
for the following performance period.
Targets are set taking into account a number of factors,
including, but not limited to, internal business plans, external
analyst consensus, economic environment and market
conditions. Targets are intended to be challenging at the top
end of the range without encouraging undue risk taking.
Remuneration Committee discretion
In line with market practice and the Executive Share Plan,
the Committee retains discretion relating to operating and
administering the annual bonus and ESPs. This discretion
includes, but is not limited to, the matters below.
The Annual Bonus Plan:
the scheme participants; the review,
setting and weighting of annual performance targets; the
determination and calculation of any bonus payment; the timing
of any bonus payments; the determination of the treatment of
leavers depending on the circumstances; the determination of
bonuses for new joiners during the year depending on the
circumstances; and the determination of bonuses in the event
of a change in control.
The ESP:
the scheme participants; the form and timing of the
grant of an award; the size of awards made within the specified
limits; the setting of appropriate and assessment of performance
measures; determining the treatment of leavers depending on the
circumstances; discretion relating to vesting in the event of a
change of control of the Company; substitutes a cash equivalent
in place of shares; making appropriate adjustments to awards
required in certain circumstances, e.g. demerger, special dividend
or other similar event which affects the value of any award.
Performance measures:
the Committee also retains the ability,
within the Directors’ Remuneration Policy, if events occur that
cause it to determine that the conditions set in relation to an
annual bonus plan or a granted ESP award are no longer
appropriate or unable to fulfil their original intended purpose,
to adjust targets and/or set different measures or weightings
for the applicable annual bonus plan and ESP awards. Any such
changes would be explained in the subsequent Directors’
Remuneration Report and, if appropriate, be the subject of
consultation with the Company’s major shareholders.
In line with the UK Corporate Governance Code, in respect of
both annual bonus and ESP awards, the Committee may exercise
its discretion to override formulaic outcomes derived from
performance conditions. This may include, without limitation,
to reflect overall corporate performance and circumstances that
were unexpected or unforeseen at the Grant Date.
CVS Group plc
Annual Report and Financial Statements 2026
99
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Malus and clawback
In respect of the annual bonus and ESP, the Committee has
the authority to apply malus and clawback within three years
of payment or the normal vesting date. The Committee
considers this period to be appropriate and proportionate,
providing sufficient time for material issues relating to
performance, conduct or risk management to be identified
and addressed.
This malus and clawback authority may be exercised in cases,
inter alia, of material misstatement, error or inaccuracy in
performance assessments, a material failure in risk management,
serious reputational damage, corporate failure, serious
misconduct, a serious breach or non-observance of any code
of conduct, personal hedging to undermine the shareholding
policy, any breach of the employment contract and any other
circumstances similar to the above.
Under this authority the Committee may require any awards
which have not vested to lapse in whole or in part immediately,
and/or may require Executives to repay to the Company the
before or after-tax value of some or all of the value received
under annual bonus or ESP during the relevant period.
Service contracts and letters of appointment
The service contracts and letters of appointment of the
Directors include the following terms:
Executive
Directors
Initial contract/
service agreement
commencement
Most recent
service agreement
Notice
R Fairman
1 August 2018
18 September 2026
12 months
R Alfonso
8 July 2019
18 September 2026
12 months
P Higgs
14 August 2018
18 September 2026
12 months
The maximum notice period for an Executive Director is
twelve months.
Non-Executive
Directors
Date of
appointment
Most recent
service agreement
Term
Notice
D Wilton
24 September
2021
1 May 2024
3 years
3 months
R Gray
16 July 2020
16 July 2026
3 years
3 months
J Shaw
1 July 2023
1 July 2026
3 years
3 months
L Hagan
1 May 2026
1 May 2026
3 years
3 months
H Keays
1 April 2026
1 April 2026
3 years
3 months
J Bednall
1 April 2026
1 April 2026
3 years
3 months
The service contracts are available for inspection at the
Company’s registered office. The service contract of any new
appointment is expected to be consistent with that of current
Executive Directors.
Policy on recruitment
When hiring a new Executive Director, the Committee will
consider the overall remuneration package with reference to the
Remuneration Policy set out in this report. Salary levels will be
set so as to be competitive with comparable roles in companies
in similar sectors, and also taking into account the experience,
seniority and the scope of responsibility of the appointee
coming into the role. New Executive Directors will be able to
participate in the annual bonus scheme on a pro-rated basis
for the portion of the financial year for which they are in post.
New Executive Directors may receive benefits and pension
contributions in line with the Company’s existing Policy. ESP
awards are made on an ongoing basis in line with our policy for
Executive Directors and other Senior Executives. In the year of
recruitment, a higher award may be made to the new recruit
within the limits of the Remuneration Policy. The maximum level
of variable remuneration which may be granted to a new recruit
(excluding the value of any buy-out award) would be in line with
the Policy limits.
The approach in respect of compensation for forfeited
remuneration from a previous employer will be considered on
a case-by-case basis taking into account all relevant factors,
such as the form of compensation forfeited, performance
achieved or likely to be achieved, and the proportion of the
performance period remaining. If any compensation for
forfeited remuneration is paid, it may be awarded outside the
ESP, through a Buy-Out Award, (provided it is settled with
market-purchase shares or cash) and may be made with
non-standard performance conditions, or without performance
conditions and with a shorter vesting period and without a
holding period to reflect the profile of forfeited awards. Any
such arrangements would be disclosed in the following year’s
Annual Report. This discretion reflects that available to
companies under the UK Listing Rules.
In the case of an internal appointment to an Executive Director
role, any variable pay element, annual bonus or ESP awarded in
respect of a prior non-Board role would be allowed to pay out
according to its terms.
Discretion to vary from the Policy may also be exercised in the
following circumstances: (1) for a short-term/interim appointment;
(2) where the Chair or a Non-Executive Director is appointed
to an Executive role for a short period; (3) where an Executive
Director is appointed mid-year, performance conditions for
annual bonus and ESP may be tailored for this; (4) where an
Executive Director is hired from a location with different benefits
that the Committee sees appropriate to buy out (but not variable
remuneration which is covered above); (5) relocation expenses
– one-off and/or ongoing including tax equalisation; and
(6) legal and similar expenses.
CVS Group plc
Annual Report and Financial Statements 2026
100
Policy on payments for loss of office
Leaver provisions
The Committee will take into account the specific
circumstances of the departure, the contractual entitlements,
and rules of the relevant incentive plans when determining the
termination treatment which is summarised below:
Basic salary:
This will be paid over the contractual notice
period and is subject to mitigation. However, the Company has
the discretion to make a lump sum payment for termination in
lieu of notice.
Benefits and pension contributions:
These will continue to be
provided over the contracted notice period. Any outstanding
all-employee awards will be treated in line with the relevant
HMRC regulations.
Annual bonus:
If an employee ceases employment before the
bonus payment date, their entitlement to an annual bonus will
generally lapse. However, in the case of a “good leaver”, the
Committee may exercise discretion to award a time pro-rated
bonus based on the period of service and performance
achieved. Any bonus payment to a good leaver is subject to the
usual performance conditions and Company discretion and may
not become payable until the normal payment date. Outstanding
deferred bonus awards will ordinarily continue to vest on their
normal vesting date, unless on death where they will be
released immediately as a matter of course.
ESP:
If an award holder leaves employment before their award
vests, the award will ordinarily lapse. However, in “good leaver”
circumstances, a time pro-rated award may still vest based on
the period of service, subject to performance assessment,
unless the Committee determines that a lesser reduction is
appropriate. The remaining award will either vest at the normal
vesting date or at an earlier date if the Committee determines so.
The Group will pay any amounts it is required to in accordance
with or in settlement of a Director’s statutory employment rights
and in accordance with their service contract. The Committee
may reimburse reasonable legal costs associated with the
termination. If felt appropriate, the Committee may provide a
contribution towards outplacement support. A Director’s service
contract may be terminated without notice and without any
further payment or compensation, except for sums accrued up to
the date of termination, on the occurrence of certain events such
as serious dishonesty, gross misconduct, or wilful neglect of duty.
Differences in Remuneration Policy for employees
vs Executive Directors
The principles behind the Remuneration Policy for Executive
Directors are cascaded down through the Group. They aim to
attract and retain the best people and to focus their remuneration
on the delivery of long-term sustainable growth by using a mix of
salary, benefits, bonus and longer-term incentives. As a result, no
element of the Executive Director Remuneration Policy is operated
exclusively for Executive Directors other than the two-year
post-vesting holding period and the shareholding guideline:
• The annual bonus scheme for Executive Directors is largely
the same as that of the rest of the Executive Committee.
•
Participation in the ESP is extended to the rest of the
Executive Committee and Senior Leadership Group.
• A pension scheme is operated for all permanent employees.
The contribution levels for existing Executive Directors are
aligned with the same level of contribution for the majority
of other UK employees.
The main difference in pay between Executive Directors and
employees is that, for Executive Directors, there is a higher
weighting towards the variable element of total remuneration.
The total remuneration opportunity is higher to reflect that more
is at risk and has a longer-term timeframe.
How the views of employees are taken into account
The Board has established a Designated Non-Executive
Director (DNED) for Employee Engagement as a direct response
to the UK Corporate Governance Code, giving the workforce a
voice in Board matters.
The role of the Employee Engagement Director is to review and
monitor employee insight informed by engagement activities
and employee engagement surveys. The DNED, who was
Deborah Kemp until being replaced by Laura Hagan from 1 July
2026, engaged with the workforce during 2026 at meetings
with colleagues, practice visits and our annual leadership
conference, and feedback was sought across these forums. In
2027, the DNED will continue to engage with colleagues through
practice visits and at our annual leadership conference and is
planning a series of employee listening groups.
The Committee considers the pay and conditions of employees
throughout the Group when determining the remuneration
arrangements for Directors although no direct comparison
metrics are applied. In particular, the Committee considers
the relationship between general changes to UK employees’
remuneration and Executive Director reward. While the
Committee does not directly consult with employees as part
of the process of determining Executive pay, the Board does
receive feedback from employee surveys that take into account
remuneration in general.
Statement of consideration of shareholder views
Shareholder views are considered when evaluating and setting
remuneration strategy. The Company welcomes dialogue with
its shareholders over matters of remuneration. When significant
changes or decisions are in contemplation, the Chair of the
Committee may consult major shareholders in advance as was
the case with the development of this Policy. The Committee
also considers feedback received as part of the AGM process
as well as the views of relevant proxy agencies. The Chair of
the Committee is available for contact with institutional
investors concerning the approach to remuneration.
Legacy arrangements
The Company will honour existing awards, incentives, benefits
and contractual arrangements made to individuals prior to their
promotion to the Board and/or prior to the approval and
implementation of this Policy. This will last until the existing
incentives vest (or lapse) or the benefits or contractual
arrangements no longer apply.
External appointments
Executive Directors may accept one external non-executive
directorship with the prior written agreement of the Board,
provided it does not conflict with the Group’s interests and the
time commitment does not impact upon the Executive Directors’
ability to perform their primary duty. The Executive Directors
may retain the fee from external directorships.
Currently no Executive Directors have external appointments.
CVS Group plc
Annual Report and Financial Statements 2026
101
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Directors’ Remuneration Policy
continued
Illustrations of the application of the Remuneration Policy
The table and charts below represent estimates under four performance scenarios (“Minimum”, “Target”, “Maximum” and
“Maximum with growth” (assuming a +50.0% share price appreciation) between award and vesting under the ESP) of the potential
remuneration outcomes for each Executive Director resulting from the application of the 2026 base salaries to awards made in
accordance with the proposed Policy. The majority of Executive Directors’ remuneration is delivered through variable pay elements,
which are conditional on the achievement of stretching targets.
The Committee will review the actual remuneration outcomes taking into account the quality of performance outcomes and,
if appropriate, use its discretion to adjust these, taking into account CVS’s performance, the operation of the remuneration
structures and any other relevant factors, to ensure that the highest variable pay outcomes are only achieved in years with the
highest performance.
The pay scenarios are forward looking and only serve to illustrate the Policy as proposed to be operated for the year ended
30 June 2027. The scenarios are based on the current CEO, CFO and CVO roles.
Performance scenarios
Minimum
Target
Maximum
Maximum + 50%
Fixed remuneration
Base salary
1
Benefits
2
Pension
3
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Annual bonus
Nil
Set at 50% of
maximum
opportunity
75% of salary
150% of salary
150% of salary
Performance Share Awards
Nil
Set at 50% of
maximum
opportunity
CEO – 100%
of salary
CFO and CVO
– 75% of salary
Set at maximum
opportunity
CEO – 200%
of salary
CFO and CVO
– 150% of salary
Full vesting as
under maximum
with 50% share
price appreciation
1.
Base salary from 1 July 2026.
2. Taxable value of annual benefits for year ended 30 June 2026.
3. Pension at 6% of salary earned between £6,000 and £50,000.
Illustrations of application of Remuneration Policy (£‘000)
Total fixed remuneration
Annual bonus
ESP
Share price growth
36%
37%
CEO
Below
threshold
On target
Max
Max with
growth
18%
44%
36%
£593
£1,590
£2,588
£3,158
100%
19%
23%
27%
33%
27%
Below
threshold
On target
Max
Max with
growth
CVO
16%
30%
37%
31%
£354
£871
£1,389
£1,647
100%
22%
26%
37%
29%
31%
41%
Below
threshold
On target
Max
Max with
growth
CFO
16%
30%
37%
31%
£401
£978
£1,556
£1,844
100%
22%
26%
29%
31%
37%
41%
CVS Group plc
Annual Report and Financial Statements 2026
102
Annual Report on Remuneration
Introduction
This Annual Report on Remuneration sets out information about the remuneration of the Directors of the Company for the year
ended 30 June 2026.
Remuneration received by Directors for the year ended 30 June 2026 – audited
The following table sets out the Directors’ remuneration for the year ended 30 June 2026 (or for performance periods ended in that
year in respect of long-term incentives) together with comparative figures for the year ended 30 June 2025.
Directors’ emoluments
Fixed pay
Variable pay
Basic salary
allowance
and fees
£’000
Benefits
in kind
£’000
Pension
£’000
Total fixed
pay
£’000
Performance
related
bonus
£’000
Value of share
ESP awards
vested during
the year
3
£’000
Total
variable pay
£’000
Total pay
£’000
Executive Directors
R Fairman
2026
493
20
40
553
—
—
—
553
2025
493
17
39
549
172
—
172
721
R Alfonso
2026
338
13
27
378
—
—
—
378
2025
338
11
27
376
118
—
118
494
P Higgs
1
2026
290
6
23
319
—
—
—
319
2025
267
6
21
294
99
—
99
393
B Jacklin
2
2026
—
—
—
—
—
—
—
—
2025
394
10
32
436
—
—
—
436
Non-Executive Directors
D Wilton
2026
155
—
—
155
—
—
—
155
2025
155
—
—
155
—
—
—
155
D Kemp
4
2026
58
—
—
58
—
—
—
58
2025
57
—
—
57
—
—
—
57
R Gray
2026
54
—
—
54
—
—
—
54
2025
54
—
—
54
—
—
—
54
J Shaw
2026
58
—
—
58
—
—
—
58
2025
56
—
—
56
—
—
—
56
L Hagan
5
2026
9
—
—
9
—
—
—
9
2025
—
—
—
—
—
—
—
—
H Keays
6
2026
13
—
—
13
—
—
—
13
2025
—
—
—
—
—
—
—
—
J Bednall
6
2026
13
—
—
13
—
—
—
13
2025
—
—
—
—
—
—
—
—
1.
P Higgs was appointed to the Board with effect from 25 July 2024.
2. B Jacklin resigned from the Board with effect from 8 July 2024, and concluded his notice period on 17 June 2025.
3. In respect of 2026 and 2025, no ESP awards vested and therefore the value is £nil.
4. D Kemp resigned from the Board with effect from 30 June 2026.
5. L Hagan was appointed to the Board with effect from 1 May 2026.
6. H Keays and J Bednall were appointed to the Board with effect from 1 April 2026.
CVS Group plc
Annual Report and Financial Statements 2026
103
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Annual Report on Remuneration
continued
Remuneration received by Directors for the year
ended 30 June 2026 – audited
continued
Salaries
There were no changes to Executive Directors’ salaries during
the year.
Benefits
Benefits include the provision of a company car and medical
and life insurance.
Discretionary bonus
For 2026, the maximum bonus entitlement for the Executive
Directors was 100% of base salary, weighted 80% on adjusted
EBITDA and 20% on five strategic components, each
representing up to 4% of bonus payable on a straight-line basis.
The bonus scheme targets for the financial year were as follows:
Measure
Weighting
Target range
Outcome
% achieved
Adjusted EBITDA
target range (with
targets increased to
reflect acquisitions
and disposals)
80%
£142.6m for
zero bonus
and £152.1m
for maximum
bonus
£141.5m Nil
Like-for-like sales
growth
4%
>+4%
+2.1%
Nil
Return on capital
employed (ROCE)
4%
>12%
16.4%
4%
Client Net Promoter
Score
4%
>80.0
80.6
4%
Employee Net
Promoter Score
4%
>5.0
5.8
4%
Non-medical waste
recycling
4%
>41%
non-medical
waste to be
recycled
45.5%
4%
As the primary financial target of the bonus was not met, the
non-financial element of the bonus is not payable.
In light of the above, the Committee determined that no bonus
payment would be made for 2026 (2025: 34.9%).
ESP vesting
ESP awards for the three-year performance period ended
30 June 2026 due to vest in September 2026 (ESP17) will lapse
in full. The vesting of these awards was subject to meeting
adjusted EPS and total shareholder return targets as set follows:
Adjusted EPS (50% weighting)
Adjusted EPS for the year ended 30 June 2026 was 85.6p.
This compares to adjusted EPS of 96.0p
1
for the year ended
30 June 2023, a compound annual growth rate (CAGR) of -7.2%
below inflation. The target CAGR for threshold and full vesting
of ESPs issued in September 2023 was 1.0% and 6.0% above
inflation, respectively. This target has not been met and
therefore none of the options granted have vested (max 50%).
Total shareholder return (TSR) (50% weighting
)
Total shareholder return for the three years to 30 June 2026
was -38.8%, and in the lower quartile when benchmarked
against the FTSE 250 Index (less investment trusts), measured
over the same period. The Committee believes sentiment has
impacted the share price due to the CMA investigation. The
target has not been exceeded and therefore none of the options
granted have vested (max 50%).
As a result of neither the adjusted EPS nor TSR targets being
met no options have vested for ESP17.
ESP awards
On 31 July 2025, the Company granted awards under ESP19
to its Executive Directors as detailed in the tables on page 105.
The face value of these awards, each reflecting 200% of salary
at the time of award, is £986,420 for the CEO, £675,740 for the
CFO and £580,000 for the CVO. The face value was calculated
by multiplying the average share price on the five dealing days
prior to the date of grant by the number of shares awarded
with the share price of £12.40.
The Committee considers that the performance measures
are aligned to long-term business strategy and appropriately
stretching reflecting the prevailing environment.
1.
2023 adjusted EPS as reported and prior to the re-presentation
following the divestment of the Netherlands and Republic of
Ireland operations.
CVS Group plc
Annual Report and Financial Statements 2026
104
Share scheme interests as of 30 June 2026 – audited
Details of plans at the reporting date that have not yet vested are set out below:
Award
Grant date
Vesting period
ESP17
ESP18
ESP19
30 September 2023
4 October 2024
31 July 2025
3 years
3 years
3 years
The performance targets for award ESP17,
ESP18 and ESP19 are based on achieving
adjusted EPS growth in excess of inflation
and total shareholder return in comparison
to the FTSE 250.
Adjusted EPS growth (50% weighting)
50.0% of the awards will vest if adjusted
EPS growth in excess of inflation is
achieved as follows:
• less than 1.0% CAGR – no award subject
to this condition;
• 1.0% to 6.0% CAGR – awarded on a
straight-line basis between 25.0% and
100.0% of total award subject to this
condition; or
• more than 6.0% CAGR – full award
subject to this condition.
Total shareholder return (TSR)
(50% weighting)
50.0% of the awards will vest if TSR in
comparison to the FTSE 250 Index
(excluding investment trusts) is achieved
as follows:
• below median comparable performance
– no award subject to this condition;
• median comparable performance – 25.0%
of awards subject to this condition;
• median to upper quartile comparable
performance – 25.0% to 100.0% of
awards subject to this condition
measured on a straight-line basis; or
• upper quartile comparable
performance – 100.0% of awards
subject to this condition.
Options over Ordinary shares awarded to Executive Directors under the ESP and SAYE schemes in place on 30 June 2026 are
as follows:
Scheme
Date of grant
Market price
of shares on
date of grant
Earliest exercise date and
date of vesting of shares
Exercise
price
Number
of shares
at 30 June
2025
1
Granted
Lapsed
Exercised
Number
of shares
at 30 June
2026
1
R Fairman
ESP16
30 September 2022
1,690p
30 June 2025
0.2p
30,773
—
(30,773)
—
—
ESP17
29 September 2023
1,630p
30 June 2026
0.2p
34,419
—
—
—
34,419
ESP18
04 October 2024
1,058p
30 June 2027
0.2p
55,581
—
—
—
55,581
ESP19
31 July 2025
1,228p
30 June 2028
0.2p
—
79,550
—
—
79,550
SAYE15
25 November 2022
1,515p
01 January 2026
1,515p
380
—
(380)
—
—
SAYE16
24 November 2023
1,530p
01 January 2027
1,146p
550
—
—
—
550
SAYE17
26 November 2024
798p
01 January 2028
847p
722
—
—
—
722
SAYE18
26 November 2025
1,192p
01 January 2029
1,136p
—
507
—
—
507
R Alfonso
ESP16
30 September 2022
1,690p
30 June 2025
0.2p
15,990
—
(15,990)
—
—
ESP17
29 September 2023
1,630p
30 June 2026
0.2p
17,884
—
—
—
17,884
ESP18
04 October 2024
1,058p
30 June 2027
0.2p
30,460
—
—
—
30,460
ESP19
31 July 2025
1,228p
30 June 2028
0.2p
—
54,495
—
—
54,495
SAYE15
25 November 2022
1,515p
01 January 2026
1,515p
403
—
(403)
—
—
SAYE16
24 November 2023
1,530p
01 January 2027
1,146p
550
—
—
—
550
SAYE17
26 November 2024
798p
01 January 2028
847p
680
—
—
—
680
SAYE18
26 November 2025
1,192p
01 January 2029
1,136p
—
538
—
—
538
P Higgs
ESP16
30 September 2022
1,690p
30 June 2025
0.2p
4,732
—
(4,732)
—
—
ESP17
29 September 2023
1,630p
30 June 2026
0.2p
6,212
—
—
—
6,212
ESP18
04 October 2024
1,058p
30 June 2027
0.2p
26,144
—
—
—
26,144
ESP19
31 July 2025
1,228p
30 June 2028
0.2p
—
46,774
—
—
46,774
SAYE16
24 November 2023
1,530p
01 January 2027
1,146p
517
—
—
—
517
SAYE17
26 November 2024
798p
01 January 2028
847p
722
—
—
—
722
SAYE18
26 November 2025
1,192p
01 January 2029
1,136p
—
538
—
—
538
1.
Share price for the purposes of calculating number of shares to grant is the average of closing share price for preceding five days in line with
scheme rules.
CVS Group plc
Annual Report and Financial Statements 2026
105
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Remuneration Committee report
continued
Annual Report on Remuneration
continued
Loss of office
No payments were made during the year in respect of loss of office.
As announced on 30 March 2026, Richard Fairman has indicated an intention to retire from the Board for personal reasons in due
course. He remains in post until a successor is appointed to ensure an orderly handover. As he remains in post and not formally
under notice he will continue to be subject to our Policy in the same way as other Executives. We intend to provide an update on
the remuneration arrangements for Richard’s leaver arrangements and those of any successor at the appropriate time; those
remuneration arrangements will also be reflective of our Policy.
Payments to former Directors
No payments were made during the year to former Directors.
Performance graph
The graph below illustrates CVS Group plc’s TSR performance against the FTSE 250 (excluding investment trusts) since 1 July 2016.
Given the Company’s market capitalisation the Committee considers this an appropriate peer group.
Chief Executive Officer’s historical remuneration – audited
The table below sets out the total remuneration of the individual undertaking the role of Chief Executive Officer over the last ten
years for the period such individual was undertaking the CEO role, valued using the methodology applied to the single total figure
remuneration (shown in the Directors’ emolument table on page 103).
Year
CEO
Total remuneration
£’000
Annual bonus payment level achieved
(% of maximum opportunity)
ESP vesting level achieved
(% of maximum opportunity)
2026
Richard Fairman
553
Nil
Nil
2025
Richard Fairman
721
34.9%
Nil
2024
Richard Fairman
593
12.0%
Nil
2023
Richard Fairman
1,564
90.4%
100%
2022
Richard Fairman
1,808
98.4%
100%
2021
Richard Fairman
1,622
100%
100%
2020
Richard Fairman*
378
Nil
N/A
2020
Simon Innes*
790
Nil
Nil
2019
Simon Innes
780
Nil
66%
2018
Simon Innes
885
Nil
100%
2017
Simon Innes
1,606
100%
100%
*
Simon Innes left the role of CEO in November 2019 from which point Richard Fairman was appointed CEO.
CVS Group plc
Annual Report and Financial Statements 2026
106
350
300
250
200
150
100
50
0
Jun 16
Jun 17
Jun 18
Jun 19
Jun 20
Jun 21
Jun 22
Jun 23
Jun 24
Jun 25
Jun 26
CVS Group
FTSE 250 (excluding investment trusts)
CEO pay ratio
Pay ratio information in relation to the total remuneration of the Director undertaking the role of CEO
The table below sets out the ratio of the total remuneration received by the Group CEO during the year ended 30 June 2026 to the
total remuneration received in the same period by our UK employees at the median, 25th and 75th percentiles.
Year
Methodology
25th percentile
pay ratio
50th percentile
pay ratio
75th percentile
pay ratio
2026*
Option B
20:1
17:1
12:1
2025 restated*
Option B
28:1
23:1
15:1
2024
Option B
25:1
20:1
14:1
2023
Option B
69:1
56:1
37:1
2022
Option B
89:1
69:1
45:1
*
The gender pay gap reporting for the period to 5 April 2026 had yet to be published at the last reporting date and therefore the CEO pay ratio was
completed against the three colleagues identified in the 5 April 2025 gender pay reporting. 2025 has been restated now the 2025 gender pay gap
reporting has been published.
2026
2025 restated
2024
Basic salary
£’000
Total pay
and benefits
£’000
Basic salary
£’000
Total pay
and benefits
£’000
Basic salary
£’000
Total pay
and benefits
£’000
Group CEO
493
553
493
721
468
593
UK employees 25th percentile
26
27
25
26
24
24
UK employees 50th percentile
32
33
30
31
29
29
UK employees 75th percentile
46
48
45
47
42
43
Given that the majority of our workforce are practice based,
with a significant number of part-time colleagues, calculating a
full-time equivalent rate is complex. Consequently, under option
B of the legislation this methodology means that we use gender
pay gap data, which is readily available, to identify the 25th,
50th and 75th percentile of UK colleagues using the 5 April 2025
snapshot date. A full-time equivalent total pay figure is then
derived using the single figure methodology for the three
colleagues. To ensure these are representative colleagues, we
have also analysed the total pay of colleagues adjacent to the
three colleagues.
For the CEO pay ratio, we have used the CEO’s total pay as
detailed in the Directors’ emolument table on page 103. The
CEO’s remuneration package includes a significant variable
component to align outcomes to Company performance.
Therefore, the pay ratio can fluctuate year to year based on
business performance and incentive outcomes. The decrease
in the pay ratio this year is attributed to Company performance
and the bonus not being payable.
The Committee considers the pay ratios alongside other
reference points. It believes the median pay ratio this year
aligns with our pay, reward and progression policies for UK
colleagues, reflecting our pay for performance philosophy.
Relative importance of spend on pay – audited
The following table shows the Group’s actual spend on pay
for all Group employees (continuing operations) relative to
dividends and pre-tax profit.
2026
£m
2025
£m
Change
%
Overall spend on pay,
including Executive Directors
348.2
325.9
+6.8%
Adjusted EBITDA for
continuing operations
141.5
134.6
+5.1%
Profit before tax for
continuing operations
32.0
32.6
-1.8%
Capital expenditure
1
36.4
34.2
+6.4%
Dividends
6.1
5.7
+7.0%
1.
Capital expenditure has been included in the above table as it
represents a key expenditure, being the Group’s investment in
infrastructure to drive future growth.
CVS Group plc
Annual Report and Financial Statements 2026
107
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Annual Report on Remuneration
continued
Advisors to the Remuneration Committee
During the year, h2g Remuneration Advisory (h2g) advised the
Committee on certain aspects of remuneration matters. Fees of
£110,390 exclusive of VAT were paid to h2g on a time incurred
basis. FIT Remuneration Consultants LLP (FIT) was appointed
following the year end to provide additional support with the
development and reporting of the Remuneration Policy. h2g and
FIT are members of the Remuneration Consultants Group and, as
such, voluntarily adhere to its Code of Conduct. The Committee
considers the advice that it receives from h2g and FIT to be
independent as both solely advise the Company on remuneration
matters. There are no relationships between h2g, FIT and either
the Company or individual Directors to be disclosed.
Directors’ interests in shares – audited
The interests of the Directors who served during the year when
combined with their spouses’ holdings as of 30 June 2026 in
the shares of the Company were:
2026
Beneficially
owned
Outstanding
awards
subject to
performance
Outstanding
awards not
subject to
performance
% of basic
salary at
30 June
2026
Shareholder
guideline
met
D Wilton
12,500
—
—
N/A
N/A
D Kemp*
10,453
—
—
N/A
N/A
R Gray
9,600
—
—
N/A
N/A
J Shaw
2,387
—
—
N/A
N/A
L Hagan
—
—
—
N/A
N/A
H Keays
—
—
—
N/A
N/A
J Bednall
—
—
—
N/A
N/A
R Fairman
79,751
—
—
190%
No
R Alfonso
25,247
—
—
88%
No
P Higgs
4,931
—
—
20%
No
*
Resigned 30 June 2026.
Apart from the interests in shares disclosed above, and share
options disclosed on page 105, the Directors had no other
interest in shares of Group companies.
Since the year end, the following shares transactions
have occurred:
• R Alfonso has purchased a further 768 Ordinary shares,
bringing his total interests in Ordinary shares to 26,015.
• D Wilton has purchased a further 1,500 Ordinary shares,
bringing his total interests in Ordinary shares to 14,000.
•
J Shaw has purchased a further 1,592 Ordinary shares,
bringing her total interests in Ordinary shares to 3,979.
The shareholding guideline was increased to 200.0% of base
salary with effect from 1 July 2023. The Committee recognises
the Directors will take time to bring their respective holdings to
this level and is comfortable with the level of current holding
and each Director’s commitment to continue to increase this.
On 30 June 2026, the market price of the Ordinary shares
was 1,173p.
Implementation of Policy for year ended 30 June 2027
Fixed pay
The CEO base salary will be increased to £570,000 (c.16%),
the CFO base salary will be increased to £385,000 (c.14%) and
the CVO base salary will be increased to £345,000 (c.19%) from
1 July 2026. The corrective increases are considered necessary
to provide a competitive package. Even with these changes, salary
is considered to be modestly positioned against benchmark data.
There are no changes planned for benefits. The pension provision will
be reduced for current Executive Directors so that it is fully aligned
with pension provision for the UK workforce, which is currently a
6.0% contribution for salary between £6,000 and £50,000.
Annual bonus
The maximum bonus for the CEO, CFO and CVO is 150.0% of
salary, with 50.0% of any bonus deferred for two years, unless
the shareholding guideline is met in which case 33.0% of any
bonus would be deferred.
The bonus will be assessed against:
• adjusted EBITDA growth 20.0% weighting;
•
adjusted EPS growth 20.0% weighting;
•
return on capital employed (ROCE) 20.0% weighting;
• free cash flow per share growth 20.0% weighting;
• like-for-like sales growth 5.0% weighting;
•
employee Net Promoter Score 5.0% weighting;
•
client Net Promoter Score 5.0% weighting; and
• reduction in carbon 5.0% weighting.
The widening of measures was considered appropriate to
ensure performance is assessed on a rounded basis and was
reflective of shareholder feedback.
Long-term incentives (Executive Share Plans)
For 2026/27 the proposed award levels will be 150% for the
CFO/CVO. The Committee intends to grant the CEO an award of
200% of salary if, at the time of the award, the CEO recruitment
process remains ongoing.
Awards will subject to a relative TSR measure (50% weighting)
with a market standard median to upper quartile target range
and an adjusted EPS growth (50% weighting) target range of
3.0% to 10.0% CAGR. The adjusted EPS target range was set
following due consideration of internal forecasts, external
consensus and the current view of market conditions. The
targets are considered to be challenging, particularly to achieve
the top end.
Threshold vesting will result in 25% of the award vesting, rising on
a straight-line basis to full vesting for achieving the stretch target.
Remuneration Committee report
continued
CVS Group plc
Annual Report and Financial Statements 2026
108
Non-Executive Director fees
The Chair and Non-Executive Director fees are stated in the
table below:
1 July 2026
£
1 July 202
5
£
Group Chair
220,000
155,000
Non-Executive Director base salary
59,500
51,419
Senior Independent Director
12,000
—
Employee Engagement Director fee
10,000
—
Audit and Risk/Remuneration Chair
Board Committee fee
12,000
6,640
Nomination Chair Board Committee fee
—
3,566
Statement of voting
At the Annual General Meeting on 18 November 2025, the
resolutions were approve for the Remuneration Report and
Remuneration Policy:
Resolution
Votes for
Votes against
Total votes
Votes
withheld
Remuneration
Report
39,871,101
(77.7%)
11,423,497
(22.3%)
51,294,598
3,865,070
Remuneration
Policy
42,609,859
(83.1%)
8,685,184
(16.9%)
51,295,013
3,865,070
1.
Votes “for” include discretionary votes.
2.
Percentages above are rounded to one decimal place.
3.
Issued share capital at meeting date: 71,433,195.
4.
A vote withheld is not a vote in law and is not counted in the
calculation of the proportion of votes “for” or “against” a resolution.
The reasons for the adverse voting and the Company’s
response are covered in the introduction to this report.
Annual General Meeting
Our Remuneration Report and our Remuneration Policy will be
subject to votes at our AGM to be held on 25 November 2026.
Helen Keays
Remuneration Committee Chair
24 September 2026
CVS Group plc
Annual Report and Financial Statements 2026
109
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Directors’ report
The Directors present their Annual Report and Financial
Statements together with the audited consolidated financial
statements for the year ended 30 June 2026.
Principal activities and results
The principal activities of the Group are to operate animal
veterinary practices, complementary veterinary diagnostic
businesses and an online retail business. The principal activity
of CVS Group plc is that of a holding company.
The Group made a profit after taxation of £17.8m (2025: £53.0m).
Particulars of events which have occurred since the end of
the financial year have been disclosed in note 33 to the
financial statements.
Business review
The information that fulfils the requirements of the business
review, including details of the 2026 results, key performance
indicators, principal risks and uncertainties and the outlook for
future years, is set out in the Chair’s Statement (pages 22 and
23), the Chief Executive Officer’s Review (pages 24 to 27), and
the Financial Review (pages 48 to 54), including key
performance indicators (pages 18 and 21) and principal risks and
uncertainties (pages 56 to 63).
Dividends
In respect of the year under review, the Directors recommend
a final dividend payment of 9.0p (2025: 8.5p), amounting to
£6.2m (2025: £6.1m).
The aggregate dividends recognised as distributions in the year
ended 30 June 2026 amounted to £6.1m (2025: £5.7m).
No interim dividends (2025: £nil) have been paid during the year.
Dividend policy
The Group has established an ordinary dividend policy that
is both progressive and sustainable, based on growing the
ordinary dividend per share over time. The rate of growth
of the ordinary dividend will be decided by the Board in light
of the circumstances at the time.
The ability of the Group to pay a dividend is also subject to
constraints including the availability of distributable reserves
and the Group’s financial and operating performance.
Distributable reserves are determined as required by the
Companies Act 2006 by reference to a company’s individual
financial statements.
Share buyback
The Board also gives due consideration to the return of
capital through the use of special dividends or share buybacks.
During the year, the Group completed a £20.0m share buyback
programme and announced a further £50.0m share buyback
programme in May 2026 which remains ongoing.
During the year, the Company purchased and cancelled
2,542,125 Ordinary shares of 0.2p each in the capital of the
Company as part of its share buyback programme, which was
undertaken in two tranches. The shares acquired represented
an aggregate nominal value of £31.7m. All shares acquired
during the year were cancelled and no shares were held in
treasury at any time. At the end of the financial year, the
Company’s issued share capital comprised 69,199,749 Ordinary
shares of 0.2p each.
The second tranche of the share buyback, totalling
£50.0m, remains ongoing, with £11.7m spent in the year
ended 30 June 2026.
Directors
The following Directors held office during the year and up to the
date of signing the financial statements unless otherwise stated:
R Fairman
H Keays (appointed 1 April 2026)
R Alfonso
J Shaw
P Higgs
J Bednall (appointed 1 April 2026)
D Wilton
D Kemp (resigned 30 June 2026)
L Hagan
(appointed 1 May 2026)
R Gray
Biographical details of the Directors are provided on pages 70
and 71.
Re-election of Directors
The Articles of Association of the Company require all Directors
to be re-elected at intervals of not more than three years. The
Board has decided that it is appropriate for all Directors to be
re-appointed each year, so in accordance with that decision, all
Directors, including Richard Fairman, CEO, unless a successor
has been appointed, will stand for re-election at the Annual
General Meeting.
Directors’ remuneration and interests
The Remuneration Committee Report is set out on pages 93 to
109. It includes details of Directors’ remuneration, interests in
the shares of the Company, share options and pension
arrangements.
Environment
The Group recognises the importance of environmental
responsibility and carries out clinical compliance reviews
and employee training to ensure compliance with
environmental standards.
Details of the Group’s approach to sustainability and ESG are
set out on pages 32 to 45.
Health and safety
The Group is fully aware of its obligations to maintain high
health and safety standards at all times, and the safety of our
colleagues and customers are of paramount importance.
The Group’s operations are managed at all times in such a way
as to ensure, as far as is reasonably practicable, the health,
safety and welfare of all of our colleagues and all other people
who may be attending our premises.
Corporate governance
The Board’s Corporate Governance Statement is set out on
pages 72 to 78.
CVS Group plc
Annual Report and Financial Statements 2026
110
Going concern
In adopting the going concern basis for preparing the
financial statements, the Directors have considered the Group’s
projections, forecasts and business activities as set out on pages
1 to 63, the financial position of the Group, its cash flows,
liquidity position and borrowing facilities as set out in the
Financial Review on pages 48 to 55, the Group’s financial risk
management objectives and exposures to liquidity and financial
risks as set out in note 3 to the financial statements, as well
as the Group’s principal risks and uncertainties as set out on
pages 56 to 63.
Based on the Group’s projections and cash flow forecasts,
the Board expects the Group to have adequate resources to
continue in operation, meet its liabilities as they fall due, retain
sufficient available liquidity and not breach covenants under
its loan facilities for the foreseeable future, being a period
of at least twelve months from the approval of the financial
statements. The Board therefore considers it appropriate
for the Group to adopt the going concern basis in preparing
its financial statements.
See note 24 to the financial statements for more information
on our loan facilities.
Viability statement
The process of considering the Group’s viability includes
financial forecasting, risk assessment, regular budget reviews
as well as scenario planning incorporating industry trends,
considering any emerging issues and economic conditions.
Our strategy aims to enhance our long-term prospects by
making sure our operations and finances are sustainable.
The UK Corporate Governance Code requires the Directors
to issue a “viability statement” declaring whether they believe
the Group can continue to operate and meet its liabilities,
considering its current position and principal risks and
uncertainties. The overriding aim is to encourage Directors to
focus on the longer term and be more actively involved in risk
management and internal controls. In assessing viability, the
Board considered several key factors, including the Group’s
business model (see pages 10 and 11), its strategy (see pages 16
and 17), its approach to risk management (see pages 56 to 58)
and its principal risks and uncertainties (see pages 59 to 63).
Assessment of viability period
The Board is required to assess the Group’s viability period
over a longer period than the twelve months required by the
“going concern” provision and in keeping with the way the
Board views developments of the business over the longer
term. A period of five years is believed to be appropriate for this
assessment since this is consistent with the Group’s long-term
strategic planning, other assessment periods included within
the Annual Report, for example impairment reviews and
typically the initial term it finances its debt over.
Assessment approach
The Directors’ assessment has been made by reference to the
Group’s financial position as at 30 June 2026, its prospects,
the Group’s strategy, the Board’s risk appetite and the Group’s
principal risks, all of which are described in the Strategic
Report. The assessment also considers scenario analysis over
the key principal risks to the business, how the Group is resilient
to those risks and how the Group can mitigate the effects of
those risks.
The Directors’ assessment of the Group’s viability is underpinned
by a paper prepared by management. The paper is supported by
comprehensive and detailed analysis and modelling, containing
financial projections for a detailed one-year plan and extended
five-year period. The longer-term plan is reviewed each year by
the Board as part of the strategy review process. Once approved
by the Board, the plan is cascaded across the Group and
provides the basis for setting all detailed financial budgets and
strategic actions that are subsequently used by the Board to
monitor performance.
The five-year plan provides a robust planning tool against
which strategic decisions can be made. In making the viability
assessment, the Board has taken into consideration that
financing facilities are maintained for the duration of the
forecast. The loan facility totalling £350.0m, of which £132.0m
is undrawn at 30 June 2026, was amended and restated, and is
now repayable on 20 May 2030, with the option to extend by
one year to 2031. For the purposes of assessing the Group’s
viability, the Directors have reviewed the risks as detailed on
pages 56 to 63; whilst all the risks identified could have an
impact on the Group’s performance, most risks could be
aggregated to have a similar impact of reduced revenue or
additional cost.
Viability assessment
The outputs of the above have been reviewed against the
Group’s current and projected future cash and liquidity position.
At the year end, the Group had cash and cash equivalents of
£18.4m, a drawn term loan of £125.0m, a drawn RCF of £93.0m,
an unutilised RCF of £132.0m and an unutilised overdraft facility
of £5.0m. The Directors have considered the available cash,
the undrawn overdraft facility and cash flow forecasts, and
consider that the Group will be able to meet its liabilities in full
as they fall due. The Group monitors cash flow on a daily basis
and maintains sufficient cash reserves to ensure both solvency
and liquidity within the Group.
In making this assessment, the Board has assumed that there
is no material adverse change in the legislative or operational
environment in the practice of veterinary medicine as a result
of the CMA market investigation. It is recognised, however, that
such future assessments are subject to a level of uncertainty
that increases with time and therefore future outcomes cannot
be guaranteed or predicted with certainty. On this basis and in
conjunction with other matters considered and reviewed by the
Board during the year, the Board has reasonable expectations
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the five financial years used for
its assessment.
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
111
Financial instruments
Details of the Group’s financial risk management objectives and
policies are included in note 3 to the financial statements.
Share capital and substantial shareholdings
Fund manager
Shares
% at
9 September
2026
Tweedy Browne
6,989,248
10.3
Global Alpha Capital Management
5,400,653
8.0
BlackRock Inc
4,748,154
7.0
Kempen Capital Management
4,470,157
6.6
Invesco
2,951,509
4.4
Janus Henderson
2,389,935
3.5
Gumshoe Capital Management
2,268,793
3.3
Aberdeen Group plc
2,109,233
3.1
Details of the share capital of the Company as at 30 June 2026
are set out in note 26 to the financial statements. Each share
carries the right to one vote at general meetings of the Company.
At 9 September 2026, the Company has been notified of the
substantial shareholdings detailed in the table above comprising
3.0% or more of the issued Ordinary share capital of the Company.
The Board is satisfied that no major shareholder presents a
conflict of interest or exerts undue influence over the Board’s
independent judgement.
Employees
Consultation with employees takes place through a number of
regional meetings throughout the year and a monthly colleague
survey. The aim is to ensure that employees’ views are taken
into account when decisions are made which are likely to affect
their interests and that all employees are aware of the general
progress of their business units and of the Group as a whole.
Deborah Kemp was the Board’s dedicated Non-Executive
Director for employee engagement, being succeeded by Laura
Hagan as of 1 July 2026. During the year, Deborah consulted
with employees through online meetings with the Company’s
Senior Leadership Group, visits to our businesses, attendance
at the annual leadership conference and regular reviews of the
Group’s monthly employee Net Promoter Score. Laura Hagan
will continue to engage with colleagues through practice visits
and at our annual leadership conference and is planning a
series of employee listening groups.
The Group regularly consults with, and seeks feedback from,
employees and the Board monitors employee engagement.
Applications for employment by disabled people are always
fully considered, bearing in mind the respective aptitude and
ability of the applicant concerned. In the event of members
of staff becoming disabled, every effort is made to ensure
that their employment with the Group continues and that
appropriate training is arranged. It is the policy of the Group
that the training, career development and promotion of a
disabled person should be, as far as possible, identical to
that of a person who does not have a disability.
The Group operates a Executive Share Plan for Executive
Directors, Executive Committee and other members of senior
management. Details are included in note 8.
The Group also has a Save As You Earn (SAYE) scheme, under
which employees are granted an option to purchase Ordinary
shares in the Company in three years’ time, dependent upon
them entering into a contract to make monthly contributions to
a savings account over the relevant period. These savings are
used to fund the option exercise value. The exercise price in
respect of options issued in the year was at a 10.0% discount
to the shares’ market value at the date of invitation. The scheme
is open to all UK Group employees, including the Executive
Directors. Details of the scheme are included in the
Remuneration Committee Report on pages 93 to 109.
Directors’ third-party indemnity provision
A qualifying third-party indemnity provision as defined in
Section 234 of the Companies Act 2006 was in force during the
year and also at the consolidated and Company statement of
financial position date for the benefit of each of the Directors in
respect of liabilities incurred as a result of their office with the
Company and any associated company to the extent permitted
by law. In respect of those liabilities for which Directors may
not be indemnified, the Company maintained a Directors’
and Officers’ (D&O) liability insurance policy throughout the
financial year.
Research and development
In the course of their ordinary work, the Group’s colleagues
perform work which advances the overall knowledge in the
veterinary field and seeks to resolve scientific and technological
uncertainties; some of this expenditure is recognised as
research and development expenditure.
Directors’ report
continued
CVS Group plc
Annual Report and Financial Statements 2026
112
Directors’ responsibilities statement
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law
and regulations. Company law requires Directors to prepare
financial statements for each financial year. Under that law, the
Directors are required to prepare the Group financial statements
in accordance with the United Kingdom-adopted International
Accounting Standards in conformity with the requirements of
the Companies Act 2006. The Directors have also chosen to
prepare the parent company financial statements under United
Kingdom-adopted International Accounting Standards. Under
company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and the Company
and of the profit or loss of the Company and the Group for
that period.
In preparing these financial statements, International
Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements of the financial reporting framework
is insufficient to enable users to understand the impact of
particular transactions, other events and conditions on the
entity’s financial position and financial performance; and
•
make an assessment of the Company’s ability to continue
as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and the Group and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and the Group and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole;
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
• the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
Disclosure of information to auditor
Each of the persons who is a Director at the date of approval
of this Annual Report and Financial Statements confirms that:
• so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• the Director has taken all the steps that he/she ought to have
taken as a Director in order to make himself/herself aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
Resolutions concerning the re-appointment of Deloitte LLP as
auditor and authorising the Audit and Risk Committee to set its
remuneration will be proposed at the AGM.
Approval
The Strategic Report on pages 1 to 63 and Directors’ Report
on pages 110 to 113 were approved by the Board of Directors
on 24 September 2026.
Authorised by order of the Board
Scott Morrison
Company Secretary
24 September 2026
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
CVS Group plc
Annual Report and Financial Statements 2026
113
Financial
Statements
116 Independent auditor’s report
124 Consolidated income statement
126 Consolidated statement of comprehensive income
127 Consolidated and Company statement
of financial position
128 Consolidated statement of changes
in equity
130 Company statement of changes in equity
131 Consolidated and Company statement
of cash flow
132 Notes to the consolidated financial statements
175 Five-year history – unaudited
176 Alternative performance measures glossary
IBC Contact details and advisors
CVS Group plc
Annual Report and Financial Statements 2026
114
What makes us CVS
Turning research into
better patient care
David and Honey
– Severn Edge Veterinary Hospital, Bridgnorth
“It’s about access. These forums offer the opportunity to discuss
cutting-edge articles, share insights and build a community of like-
minded individuals dedicated to advancing knowledge and skills.”
We support nurses in building confidence and skills in evidence-based practice through our bimonthly Vet Nurse
Journal Club. This online forum explores topics that empower nurses while providing opportunities to connect and
discuss emerging evidence. In 2026, a session on nurse-led chronic condition clinics examined practical approaches
to supporting patients with diabetes, arthritis, heart disease and renal disease. These initiatives help nurses share
best practice, build confidence and enhance patient care.
CVS Group plc
Annual Report and Financial Statements 2026
115
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Independent auditor’s report
to the members of CVS Group plc
Report on the audit of the financial statements
1. Opinion
In our opinion:
•
the financial statements of CVS Group plc (the ‘parent
company’) and its subsidiaries (the ‘Group’) give a true and fair
view of the state of the Group’s and of the parent company’s
affairs as at 30 June 2026 and of the Group’s profit for the
year then ended;
•
the Group financial statements have been properly prepared
in accordance with United Kingdom adopted International
Accounting Standards;
•
the parent company financial statements have been
properly prepared in accordance with United Kingdom
adopted International Accounting Standards and as applied
in accordance with the provisions of the Companies Act
2006; and
•
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
•
the consolidated income statement;
•
the consolidated statement of comprehensive income;
•
the consolidated and company statement of financial position;
•
the consolidated and company statements of changes
in equity;
•
the consolidated and company statement of cash flow; and
•
the related notes 1 to 35.
The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom adopted
International Accounting Standards and, as regards the parent
company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK)
(‘ISAs
(UK)’) and applicable law.
Our responsibilities under those standards are further described
in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the parent company in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the Group and
the parent company for the year are disclosed in note 6 to the
financial statements. We confirm that we have not provided any
non-audit services prohibited by the FRC’s Ethical Standard to
the Group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit
matters
The key audit matters that we identified in the
current year were:
•
Revenue recognition – Healthy Pet Club
•
Valuation of the Research and Development
Expenditure Credit (RDEC)
•
Business combinations
Materiality
The materiality that we used for the Group
financial statements was £4.2m (2025: £4.0m)
which represents 5.0% (2025: 5.1%) of
adjusted profit before tax and was determined
by reference to a range of income statement
measures.
Scoping
We have scoped in components for
procedures on one or more classes of
transactions, account balances or disclosures
that together represent 89% of revenue (2025:
85%), 90% of expenses (2025: 87%
) and 92%
of net assets (2025: 91%). These components
have a range of performance materialities
between £1.2m and £2.4m. The remainder of
the components of the Group were subject to
analytical procedures at Group level.
Significant
changes
in our
approach
There have been no significant changes to our
audit approach in the current year.
CVS Group plc
Annual Report and Financial Statements 2026
116
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and the parent company’s ability to continue to adopt the going concern
basis of accounting included:
•
Assessment of the available financing facilities of £350.0m and evaluation of repayment terms and covenant requirements;
•
Evaluation of the assumptions used in the forecasts such as revenue growth, gross margin changes and cash flow movements,
and whether these are appropriate in line with historical performance;
•
Assessment of the level of headroom in the financing facilities under the base case forecast;
•
Assessment of the arithmetical accuracy and integrity of the forecast;
•
Assessment of the accuracy of the forecast through comparing actual performance to forecast;
•
Assessment of the reasonable downturn case scenario performed by management against the principal risks, including
consideration of mitigations, and consideration of whether the adverse variance in cash flows required to produce a covenant
breach represents a remote possibility; and
•
Assessment of the appropriateness of the going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the parent company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
The key audit matters communicated below are matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current year and included the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
5.1. Revenue recognition – Healthy Pet Club
Key audit
matter
description
The Group earns revenue via the Healthy Pet Club (HPC) scheme whereby customers sign up for a monthly or
annual direct debit arrangement in exchange for a programme of preventative products and treatments.
The Group recognised £95.5m (2025: £92.2m) of HPC revenue during the year and has approximately 509,000
(2025: 519,000) active members as at the year end.
The revenue recognition for this scheme is judgemental since IFRS 15, ‘Revenue from Contracts with Customers’
requires revenue to be recorded either at a point in time or over time according to when the performance obligation
is satisfied. In the case of HPC revenue, satisfaction of the performance obligation is not aligned to the timing of
cash receipts due to the weighting of treatments towards the earlier months of the scheme. Revenue must also be
adjusted for anticipated animal deaths (whereby outstanding fees will be waived) and irrecoverable debts.
Additional adjustments are also required where a customer does not receive their treatment during the scheduled
month and hence forgoes the service, or where cash has been received from the customer, but the service has not
yet been provided.
The Group’s accounting policy is to record revenue in line with the performance obligations being satisfied. In the
current year, the estimation methodology used to apply this policy has been changed, from a cost input to a
revenue input. This was due to additional information being available in response to the Competition Market
Authority remedies that a standalone selling price is required for individual products or services included within the
HPC scheme. The change in accounting estimate did not result in a material change to the revenue recognised.
The Audit Committee also considered this as a significant matter as discussed in the Audit Committee Report on
pages 83 to 87 with the accounting policy discussed in note 2 to the financial statements.
CVS Group plc
Annual Report and Financial Statements 2026
117
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
How the scope
of our audit
responded
to the key
audit matter
Our procedures to address this key audit matter included the following:
•
obtained an understanding of relevant controls over HPC revenue recognition, including controls over supporting
data and assumptions;
•
assessed the change in estimation inputs in allocating revenue from a cost profile to a standalone selling price
for appropriateness;
•
assessed the methodology used in calculating the adjustments to revenue for treatments which are missed,
future cancellations and deferral of treatments;
•
assessed the accuracy and completeness of the membership data that drives the HPC revenue calculation
by agreeing to membership contract and bank receipt;
•
assessed the accuracy and completeness of the data of the assumed standalone selling prices used in the
revenue recognition profile for the different treatments offered for each pet type under the scheme to published
standalone selling price lists;
•
performed a recalculation of accrued revenue based on member data;
•
performed a recalculation of revenue subsequently deferred due to missed treatments, based on operational
and sales data used to estimate the level of missed treatments occurring across the Group;
•
evaluated assumptions around animal deaths and cancellations through comparison and benchmarking against
direct debit collection rates and operational data around animal life expectancy; and
•
evaluated the appropriateness of the disclosures in the financial statements.
Key
observations
Based on the audit procedures performed, we concluded that revenue recognition in respect of the HPC scheme
is appropriate. We also consider the disclosure in note 2 to be reasonable.
5.2. Valuation of the Research and Development Expenditure Credit (RDEC)
Key audit
matter
description
The Group continues to submit claims for RDEC arising from qualifying R&D expenditure, having previously
submitted claims in respect of FY19 through to FY25. The scheme rules are subjective and, for claims where the
HMRC enquiry window has not yet elapsed, there remains the possibility of challenge and clawback of some or all
of the balance claimed should HMRC determine that some or all of the expenditure is non-qualifying. Significant
judgement is therefore required when determining the level of discounting to apply against claims already
submitted, and the estimate of amounts that should be accrued in respect of qualifying expenditure in financial
periods where a claim has not been submitted.
Due to increased history of making successful claims, and volume and accuracy of project-based data collection
used to support the claims, management deem there is less uncertainty in the unsubmitted claims. As a result, the
level of discounting applied has been reduced. The impact in FY26 is recognition of an additional £6m of income
relating to both and prior year and current year. Refer to note 2 for details.
In the current year, the Group recognised £12.2m in respect of their estimated claim for FY26, £2.6m in respect
of claims submitted for FY25, and a further £2.1m in respect of earlier years. The total RDEC in the consolidated
income statement is therefore £16.9m (2025: £16.7m), which is presented in note 6 net of associated R&D costs.
£2.9m of the calculated claims remains unrecognised.
The Audit Committee also considered this as a significant matter as discussed in the Audit Committee Report on
pages 83 to 87 with the accounting policy discussed in note 2 of the financial statements. The Directors have
included RDEC as a source of estimation uncertainty in note 2 to the financial statements.
How the scope
of our audit
responded
to the key
audit matter
Our procedures to address this key audit matter included the following:
•
obtained an understanding of relevant controls over the determination of the RDEC provision, including
supporting data and assumptions;
•
with the involvement of our internal RDEC tax specialists, inspected documentation in respect of claims made
during the year and discussed with management’s specialist advisors, evaluating the appropriateness of the
underlying methodology against HMRC requirements;
•
evaluated the appropriateness of the reduction in the discount percentage through inspection of the revised
RDEC methodology and communication with HMRC in respect of prior-year submitted claims;
•
assessed the methodology and input to estimate the FY26 claim using the FY25 claim as the basis for the
current-year expenditure;
•
validated the status of each submitted claim to supporting evidence such as bank statements, HMRC
communications and submitted tax computations; and
•
evaluated the appropriateness of the disclosures in the financial statements, including in respect of estimation
uncertainties, and tied through to the underlying RDEC claim.
5. Key audit matters
continued
5.1. Revenue recognition – Healthy Pet Club
continued
Independent auditor’s report
continued
to the members of CVS Group plc
CVS Group plc
Annual Report and Financial Statements 2026
118
Key
observations
Based on the audit procedures performed, we concluded that the downwards revision of the discounting
percentage to the FY25 and earlier submitted claims and the FY26 unsubmitted claim, and the valuation of the
Research and Development Expenditure Credit and the disclosures made in note 2 are appropriate.
5.3. Business combinations – valuation of Patient Data Record (PDR) intangibles
Key audit
matter
description
The Group has completed 12 (2025: 7) acquisitions in the current year, all in Australia, for a consideration totalling
£43.8m (2025: £29.3m) net of cash acquired. In accordance with IFRS 3, ‘Business Combinations’, CVS recognises
the identifiable customer contracts and related customer relationships and order backlog, known as the patient
data records (PDR) assumed when the entities are acquired as an intangible asset. Of the consideration paid,
£26.6m (2025: £15.7m) represents the fair value of PDR acquired. See note 15 for further details.
Significant estimation and judgement are required in determining the valuation of the PDR intangible asset upon
acquisition, including the long-term growth rate, attrition rate, useful economic life, and discount rate. Based on
the continued acquisition activity and magnitude, including the estimation and judgement involved, we deem the
valuation of the Patient Data Record intangible a key audit matter.
How the scope
of our audit
responded
to the key
audit matter
Our procedures to address this key audit matter included the following:
•
obtained an understanding of relevant controls over the valuation of the PDR intangibles upon acquisition;
•
assessed management’s valuation models to assess whether intangible assets have been identified and valued
in accordance with the requirements of IFRS 3, ‘Business Combinations’ and IAS 38, ‘Intangible Assets’;
•
with the involvement of our valuation specialists, determined the appropriateness of management’s valuation
of acquired patient data records intangibles for acquisitions made during the year, including the discount rate
applied in the PDR valuation model;
•
assessed the appropriateness of management’s determined long-term growth rate, attrition rate, and useful
economic life, used in the valuation of acquired PDR intangibles for all acquisitions made during the year.
This included performing benchmarking of the long-term growth rate used to independent third-party economic
projections, testing the attrition rate to internal customer data, and comparing the useful economic lives against
peer companies;
•
considered the potential impact of external economic and other factors;
•
assessed the mechanical accuracy and integrity of the PDR valuation model prepared by management; and
•
assessed the appropriateness of the disclosures in the financial statements.
Key
observations
Based on the audit procedures performed, we concluded that the valuation of Patient Data Record (PDR)
intangibles and the disclosures made are appropriate.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£4.2m (2025: £4.0m)
£2.3m (2025: £2.2m)
Basis for determining
materiality
Materiality was determined by reference to a range of income
statement measures. The £4.2m current year materiality
represents 5.0% of adjusted profit before tax. Prior year
materiality represented 5.1% of adjusted profit before tax from
continuing operations.
Parent company materiality equates
to 1.5% (2025: 1.5%) of net assets,
capped at 55% of Group materiality.
Rationale for the
benchmark applied
The primary metrics are adjusted profit before tax of £84.9m,
adjusted EBITDA of £141.5m, and revenue of £712.8m. These
are the metrics that are deemed to be of most importance to
stakeholders as disclosed on page 2. Adjusted profit before tax
is calculated as profit before tax adjusted for amortisation, costs
associated with business combinations and exceptional items.
As a holding company, net assets
were considered the most relevant
benchmark to users of the parent
company financial statements.
5. Key audit matters
continued
5.2. Valuation of the Research and Development Expenditure Credit (RDEC)
continued
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The Directors’ Report
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Parent company financial statements
Performance materiality
70% (2025: 70%) of Group materiality
70% (2025: 70%) of parent company materiality
Basis and rationale for
determining performance
materiality
In determining performance materiality, we considered the overall quality of the Group’s control
environment and whether we were able to rely on controls, as well as the number and nature
of uncorrected misstatements in previous audits.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to them all audit differences in excess of £210,000 (2025: £200,000),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the
Audit Committee on disclosure matters that we identify when assessing the overall presentation of the financial statements.
7.
An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls,
and assessing the risks of material misstatement.
CVS Group plc consists of entities across the UK and Australia. Our scoping of our Group audit focuses on a risk-based approach
by developing an appropriate audit plan for each significant account (determined in reference to performance materiality and
qualitative factors). We have subjected one component to a full-scope audit and the remaining components to audits of specified
classes of transactions, account balances or disclosures that together cover 89% of revenue (2025: 85%), 90% of expenses
(2025: 87%) and 92% (2025: 91%) of net assets. The remainder of the Group was subject to analytical procedures at the
Group level. Testing was performed to component materiality ranging from £1.1m and £2.4m (2025: £1.1m to £2.2m).
All audit work, except for the audit work on the Australian components subject to audit of specified classes of transactions,
account balances or disclosures, which was carried out by the Australian component auditors, was carried out by the UK Group
engagement team.
Included in our audit procedures
Analytical procedures at a Group level
Revenue
Expenses
Net assets
10%
8%
11%
90%
92%
89%
Adjusted PBT
£142m
Group materiality £4.2m
Component performance
materiality range £1.2m
to £2.4m
Audit Committee
reporting threshold
£0.21m
Adjusted PBT
Group materiality
6. Our application of materiality
continued
6.1. Materiality
continued
Independent auditor’s report
continued
to the members of CVS Group plc
CVS Group plc
Annual Report and Financial Statements 2026
120
7.
An overview of the scope of our audit
continued
7.2. Our consideration of the control environment
We obtained an understanding of the control environment,
including the underlying key IT systems (Navision and Provet),
and general IT controls. The Navision IT system is the main
financial reporting system adopted by the Group. The Provet IT
system is a cloud-based practice management software which
reports all transactions within individual practices for the UK
components. We did not plan to rely on the general IT controls
associated with Navision and Provet.
We also obtained an understanding of relevant controls over
significant account balances and cycles, including but not
limited to: Veterinary practice revenue, Laboratory revenue,
Online retail business revenue, RDEC valuation, valuation of
acquired Patient Data Record intangibles, rebate valuation,
payroll, cash, inventory, leases, impairment and cash flow
forecasts. We tested the relevant controls over Healthy Pet Club
revenue and PPE. We did not plan to take a controls reliance
approach except for PPE and Healthy Pet Club revenue. For the
account balances where we did not plan to take a controls
reliance approach, we performed a fully substantive audit and
note the Audit Committee’s discussion of the control
environment in their report on pages 83 to 87.
7.3. Our consideration of climate-related risks
We have obtained an understanding of management’s process
and related controls to consider and identify the impact of climate
risks. The risks identified during the period are complete and
consistent with our understanding of the Group’s operations.
The key climate risks disclosed by management in the Principal
Risks section of the Strategic Report include the following:
•
disruptions to supply chain leading to stock shortage and
financial loss;
•
adverse weather conditions leading to a decline in client
demand; and
•
changes in regulations increasing the cost of operations.
With the involvement of our climate change specialists, we:
•
considered the impact of climate issues on our key audit matters;
•
reviewed and challenged the Group’s climate risk assessment,
including consideration of the impact of climate matters on
other areas of the financial statements. Management have
assessed that there is currently no material impact arising
from climate change on the judgements and estimates within
the financial statements;
•
evaluated the financial statements disclosures to assess
whether climate risk assumptions underpinning specific
account balances were appropriately disclosed; and
•
read the climate change-related statements (as disclosed in
the Strategic Report) and considered whether the information
included in the narrative reporting is materially consistent
with the financial statements and our knowledge obtained
in the audit.
7.4. Working with other auditors
The Group audit was conducted by the UK Group audit team
supported by a component team in Australia. The component
auditors tested specified account balances under the direction,
supervision and review of the Group audit team. The extent of our
involvement which commenced from the planning phases included:
•
setting the scope of the component auditor’s work and
assessment of the component auditor’s independence;
•
designing the audit procedures for areas to be addressed by
the component auditor and issuing Group audit instructions
detailing the nature and form of the reporting required by the
Group engagement team;
•
holding frequent calls and meetings with the component audit
team led by the Group engagement team;
•
providing direction on enquiries made by the component
auditors through online and telephone conversations; and
•
reviewing the component auditor’s engagement file by a
senior member of the Group engagement team.
8. Other information
The other information comprises the information included in
the Annual Report, other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement,
the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view,
and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to
liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis
of these financial statements.
CVS Group plc
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10. Auditor’s responsibilities for the audit of the
financial statements
continued
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
11. Extent to which the audit was considered capable
of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
11.1. Identifying and assessing potential risks related
to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
•
the nature of the industry and sector, control environment and
business performance including the design of the Group’s
remuneration policies, key drivers for Directors’ remuneration,
bonus levels and performance targets;
•
the Group’s own assessment of the risks that irregularities
may occur either as a result of fraud or error;
•
results of our enquiries of management, internal audit,
the Directors and the Audit Committee about their own
identification and assessment of the risks of irregularities,
including those that are specific to the Group’s sector;
•
any matters we identified having obtained and reviewed the
Group’s documentation of their policies and procedures
relating to:
•
identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances
of non-compliance;
•
detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
•
the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations; and
•
the matters discussed among the audit engagement team,
including component audit teams and relevant internal
specialists, including tax, valuations, IT, analytics and ESG
specialists regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the following
area of revenue recognition – Healthy Pet Club.
In common with all audits under ISAs (UK), we are also required
to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory
frameworks that the Group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the
financial statements. The key laws and regulations we
considered in this context included the UK Companies Act 2006,
UK Listing Rules issued by the FCA, UK Corporate Governance
Code 2024, and tax legislation, and remedies required as a
result of the Competition and Markets Authority remedies into
the veterinary industry.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental
to the Group’s ability to operate or to avoid a material penalty.
These included the Group’s compliance with the Royal College
of Veterinary Surgeons regulations applicable to all practices
and qualified nurses in the UK, Australian Corporations Act
2001, The Australian and New Zealand College of Veterinary
Scientists applicable in Australia, General Data Protection
Regulations, UK Veterinary Surgeons Act 1966, UK Animal
Welfare Act 2006, UK Veterinary Medicines Regulations 2013,
UK The Animal Act 1986, Australian Prevention of Cruelty
to Animals Act.
11.2. Audit response to risks identified
As a result of performing the above, we identified revenue
recognition – Healthy Pet Club as a key audit matter related
to the potential risk of fraud. The key audit matters section of
our report explains the matter in more detail and also describes
the specific procedures we performed in response to that key
audit matter.
In addition to the above, our procedures to respond to risks
identified included the following:
•
reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
•
enquiring of management, the Audit Committee and
external legal counsel concerning actual and potential
litigation and claims;
•
performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
•
reading minutes of meetings of those charged with
governance, reviewing internal audit reports and reviewing
correspondence with HMRC and regulators including the
Competition Markets Authority (CMA); and
•
in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made
in making accounting estimates are indicative of a potential
bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course
of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members
including internal specialists and component audit teams and
remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Independent auditor’s report
continued
to the members of CVS Group plc
CVS Group plc
Annual Report and Financial Statements 2026
122
Report on other legal and
regulatory requirements
12. Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
•
the information given in the Strategic Report and the
Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
•
the Strategic Report and the Directors’ report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group
and of the parent company and their environment obtained
in the course of the audit, we have not identified any material
misstatements in the Strategic Report or the Directors’ report.
13. Corporate Governance Statement
The UK Listing Rules require us to review the Directors’
statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement relating
to the Group’s compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
•
the Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 111;
•
the Directors’ explanation as to its assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate set out on page 111;
•
the Directors’ statement on fair, balanced and understandable
set out on page 113;
•
the Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on pages 56 to 63;
•
the section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on pages 56 to 58; and
•
the section describing the work of the Audit Committee
set out on page 83.
14. Matters on which we are required to report
by exception
14.1. Adequacy of explanations received and
accounting records
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
•
we have not received all the information and explanations we
require for our audit; or
•
adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
•
the parent company financial statements are not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of Directors’ remuneration
have not been made or the part of the Directors’ Remuneration
Report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were
appointed by the Directors in 2016 to audit the financial statements
for the year ending 30 June 2017 and subsequent financial
periods. The period of total uninterrupted engagement including
previous renewals and reappointments of the firm is 10 years,
covering the years ending 30 June 2017 to 30 June 2026.
15.2. Consistency of the audit report with the additional
report to the Audit Committee
Our audit opinion is consistent with the additional report to the
Audit Committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R,
these financial statements will form part of the Electronic Format
Annual Financial Report filed on the National Storage Mechanism
of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R.
This auditor’s report provides no assurance over whether the
Electronic Format Annual Financial Report has been prepared
in compliance with DTR 4.1.15R – DTR 4.1.18R.
Julian Rae (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Cambridge, United Kingdom
24 September 2026
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Consolidated income statement
for the year ended 30 June 2026
Continuing operations
Note
2026
£m
2025
£m
Revenue
4
Cost of sales
6
(397.2 )
(387.5 )
Gross profit
Administrative expenses
6
(268.0 )
(235.9 )
Operating profit
Finance expense
5
(15.6 )
(17.2 )
Profit before tax
4
Tax expense
9
(14.2 )
(13.5 )
Profit from continuing operations
Profit from discontinued operations
32
Profit for the year
Profit attributable to:
Owners of CVS Group plc
Non-controlling interests
Earnings per Ordinary share (EPS) for profit from continuing operations attributable
to the ordinary equity holders of the Company:
Basic
10
Diluted
10
Earnings per Ordinary share (EPS) for profit attributable to the ordinary equity holders
of the Company:
Basic
10
Diluted
10
CVS Group plc
Annual Report and Financial Statements 2026
124
Reconciliation of alternative performance measures
The Directors believe that adjusted measures, including adjusted EBITDA, adjusted PBT and adjusted EPS, provide additional
useful information for shareholders. These measures are used by the Board and management for planning, internal reporting and
setting Director and management remuneration. In addition, they are used by the investor analyst community and are aligned to our
strategy and KPIs. These measures are not defined by IFRS and therefore may not be directly comparable with other companies’
adjusted measures.
Alternative performance measures are defined in the glossary on pages 176 to 180. The following table provides the calculation
of adjusted EBITDA:
Alternative performance measure: adjusted EBITDA
Note
2026
£m
2025
£m
Profit before tax from continuing operations
32.0
32.6
Adjustments for:
Finance expense
5
15.6
17.2
Gain on bargain purchase
(0.5)
—
Amortisation of intangible assets
12
26.0
26.0
Impairment of intangible assets
12
2.0
—
Depreciation of property, plant and equipment
13
21.0
20.4
Depreciation of right-of-use assets
14
17.7
18.1
Loss on disposal of property, plant and equipment and disposal and impairment of
right-of-use assets
4
2.3
1.1
Depreciation, amortisation and profit on disposal attributable to discontinued operations
4
—
(1.7)
Costs relating to business combinations
1
15
14.8
14.9
Exceptional items
6
10.6
6.0
Adjusted EBITDA
4
141.5
134.6
Adjusted earnings per share (EPS):
Adjusted EPS
10
85.6p
80.1p
Diluted adjusted EPS
10
85.4p
80.1p
1. Business combinations costs include amounts accrued in respect of contingent consideration (IAS 19) in relation to acquisitions in prior years
expensed to the income statement and acquisition fees. Business combination costs have been excluded from adjusted EBITDA as they are
non-operating costs directly attributable to business combinations and are not considered indicative of underlying trading performance.
CVS Group plc
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Consolidated statement of comprehensive income
for the year ended 30 June 2026
Note
2026
£m
2025
£m
Profit for the year
Other comprehensive income/(expense) – items that will or may be reclassified
to profit or loss in future periods
Cash flow hedges:
Net movement on cash flow hedge
17
(0.6 )
(0.1 )
Deferred tax on cash flow hedge
25
Exchange differences on translation of foreign operations
(9.0 )
Other comprehensive income/(expense) for the year, net of tax
(9.1 )
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
Owners of CVS Group plc
Non-controlling interest
Total comprehensive income for the year attributable to owners of CVS Group plc:
Continuing operations
Discontinued operations
32
CVS Group plc
Annual Report and Financial Statements 2026
126
Consolidated and Company statement of financial position
as at 30 June 2026
Note
Group
2026
£m
Group
2025
£m
Company
2026
£m
Company
2025
£m
Non-current assets
Intangible assets
12
—
—
Property, plant and equipment
13
—
—
Right-of-use assets
14
—
—
Investments
16
81.3
79.2
Amounts owed by Group undertakings
34
171.5
64.0
Derivative financial instruments
17
—
—
252.8
143.2
Current assets
Inventories
19
—
—
Trade and other receivables
20
—
—
Current tax receivable
—
—
Cash and cash equivalents
21
—
—
—
—
Total assets
4
252.8
143.2
Current liabilities
Trade and other payables
22
(105.8 )
(105.0 )
—
—
Provisions
23
(1.0 )
(0.5 )
—
—
Current tax liabilities
(2.8 )
(2.6 )
—
—
Lease liabilities
14
(16.5 )
(15.2 )
—
—
(126.1 )
(123.3 )
—
—
Non-current liabilities
Trade and other payables
22
(0.8 )
(0.4 )
—
—
Borrowings
24
(214.1 )
(145.2 )
—
—
Lease liabilities
14
(89.7 )
(88.4 )
—
—
Deferred tax liabilities
25
(41.5 )
(37.2 )
—
—
(346.1 )
(271.2 )
—
—
Total liabilities
4
(472.2 )
(394.5 )
—
—
Net assets
252.8
143.2
Shareholders’ equity
Share capital
26
0.1
0.1
Share premium
27
109.1
109.1
Capital redemption reserve
0.6
0.6
Cash flow hedge reserve
(0.1 )
—
—
Merger reserve
(61.4 )
(61.4 )
—
—
Foreign exchange translation reserve
(8.7 )
—
—
Retained earnings
143.0
33.4
252.8
143.2
Non-controlling interest
35
—
—
Total equity
252.8
143.2
The Company reported a total comprehensive income for the financial year ended 30 June 2026 of £145.3m, including dividends
received from subsidiary companies of £150.0m (2025: loss of £1.3m). The notes on pages 132 to 174 are an integral part of these
consolidated and Company financial statements.
signed on its behalf by:
Richard Fairman
Robin Alfonso
Director
Company registration number: 06312831
CVS Group plc
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Consolidated statement of changes in equity
for the year ended 30 June 2026
Note
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Cash flow
hedge
reserve
£m
Merger
reserve
£m
Foreign
exchange
translation
reserve
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interest
£m
Total
equity
£m
At 1 July 2025
(61.4 )
(8.7 )
Profit for the year
Other comprehensive
income and loss
Cash flow hedges:
Fair value loss
17
(0.6 )
(0.6 )
(0.6 )
Deferred tax on cash
flow hedge
25
Exchange differences
on translation of
foreign operations
Total other comprehensive
(loss)/income
(0.5 )
Total comprehensive
(loss)/income
(0.5 )
Transactions with owners
Issue of Ordinary shares
26
Own shares purchased
for cancellation
26
(31.7 )
(31.7 )
(31.7 )
Credit to reserves for
share-based payments
11
Deferred tax relating to
share-based payments
25
Non-controlling interest
on acquisition of subsidiary
15
Transactions with
non-controlling interest
35
(1.4 )
(1.4 )
(0.7 )
(2.1 )
Dividends paid
26
(6.1 )
(6.1 )
(0.2 )
(6.3 )
Total transactions
with owners
(37.1 )
(37.1 )
(34.2 )
At 30 June 2026
(0.1 )
(61.4 )
CVS Group plc
Annual Report and Financial Statements 2026
128
Note
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Cash flow
hedge
reserve
£m
Merger
reserve
£m
Foreign
exchange
translation
reserve
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interest
£m
Total
equity
£m
At 1 July 2024
(61.4 )
Profit for the year
Other comprehensive
income and loss
Cash flow hedges:
Fair value loss
17
(0.1 )
(0.1 )
(0.1 )
Deferred tax on cash
flow hedge
25
Exchange differences
on translation of
foreign operations
(9.1 )
(9.1 )
(9.0 )
Total other comprehensive
(loss)/income
(0.1 )
(9.1 )
(9.2 )
(9.1 )
Total comprehensive
(loss)/income
(0.1 )
(9.1 )
Transactions with owners
Issue of Ordinary shares
26
Own shares purchased
for cancellation
26
Credit to reserves for
share-based payments
11
Deferred tax relating to
share-based payments
25
Non-controlling interest
on acquisition of subsidiary
Transactions with
non-controlling interest
35
Dividends paid
26
(5.7 )
(5.7 )
(0.2 )
(5.9 )
Total transactions
with owners
(4.3 )
(4.2 )
(2.7 )
At 30 June 2025
(61.4 )
(8.7 )
CVS Group plc
Annual Report and Financial Statements 2026
129
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Company statement of changes in equity
for the year ended 30 June 2026
Note
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
equity
£m
At 1 July 2025
0.1
109.1
0.6
33.4
143.2
Total comprehensive income for the year
—
—
—
145.3
145.3
Transactions with owners
Own shares purchased for cancellation
26
—
—
—
(31.7)
(31.7)
Capital contribution arising on share-based
payment
11
—
—
—
2.1
2.1
Dividends to equity holders of the Company
26
—
—
—
(6.1)
(6.1)
Total transactions with owners
—
—
—
(35.7)
(35.7)
At 30 June 2026
0.1
109.1
0.6
143.0
252.8
Note
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
equity
£m
At 1 July 2024
0.1
109.0
0.6
39.2
148.9
Total comprehensive loss for the year
—
—
—
(1.3)
(1.3)
Transactions with owners
Issue of Ordinary shares
26
—
0.1
—
—
0.1
Capital contribution arising on share-based
payment
11
—
—
—
1.2
1.2
Dividends to equity holders of the Company
26
—
—
—
(5.7)
(5.7)
Total transactions with owners
—
0.1
—
(4.5)
(4.4)
At 30 June 2025
0.1
109.1
0.6
33.4
143.2
CVS Group plc
Annual Report and Financial Statements 2026
130
Consolidated and Company statement of cash flow
for the year ended 30 June 2026
Note
Group
2026
£m
Group
2025
£m
Company
2026
£m
Company
2025
£m
Cash flows from operating activities
Cash generated from operations
29
37.8
5.6
Taxation paid
(16.1 )
(15.5 )
—
—
Interest received
—
—
Interest paid
(15.8 )
(16.5 )
—
—
Net cash generated from operating activities
37.8
5.6
Cash flows from investing activities
Business combinations (net of cash acquired)
15
(43.7 )
(30.9 )
—
—
Purchase of property, plant and equipment
13
(28.5 )
(26.4 )
—
—
Proceeds from sale of property, plant and equipment
—
—
Purchase of intangible assets
12
(7.9 )
(7.8 )
—
—
Receipts for financial assets at amortised cost
—
—
Proceeds from sale of discontinued operation
32
—
—
Net cash used in investing activities
(79.4 )
(22.7 )
—
—
Cash flows from financing activities
Dividends paid to Company’s shareholders
26
(6.1 )
(5.7 )
(6.1)
(5.7)
Dividends paid to non-controlling interests in subsidiaries
35
(0.2 )
(0.2 )
—
—
Proceeds from issue of Ordinary shares
26
—
0.1
Own shares purchased for cancellation
26
(31.7 )
(31.7)
—
Purchase of additional interest in subsidiary from
non-controlling interest
35
(2.1 )
—
—
Repayment of obligations under right-of-use assets
(17.3 )
(16.4 )
—
—
Debt issuance costs
(2.5 )
—
—
Repayment of borrowings
28
(39.0 )
(117.0 )
—
—
Increase in borrowings
28
—
—
Net cash generated from/(used in) financing activities
(59.2 )
(37.8)
(5.6)
Effects of exchange rate changes loss
(0.2 )
(0.6 )
—
—
Net increase/(decrease) in cash and cash equivalents
(0.4 )
—
—
Cash and cash equivalents at the beginning of the year
—
—
Cash and cash equivalents at the end of the year
—
—
Cash flows from discontinued operations are shown in note 32.
CVS Group plc
Annual Report and Financial Statements 2026
131
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
132
CVS Group plc
Annual Report and Financial Statements 2026
Notes to the consolidated financial statements
for the year ended 30 June 2026
veterinary diagnostic businesses and an online pharmacy and retail business. The principal activity of CVS Group plc (the Company)
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention, except
for certain financial instruments that have been measured at fair value.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all years presented in these
The financial statements have been prepared on a going concern basis. In adopting the going concern basis, the Board has
considered the business activities as set out on pages 1 to 55, the financial position of the Group, its cash flows, liquidity position
and borrowing facilities as set out in the Financial Review on pages 48 to 55, the Group’s financial risk management objectives and
exposures to liquidity and other financial risks as set out in note 3 and the principal risks and uncertainties as set out on pages 56 to
63. Management has considered the appropriate assessment period taking into account all available information.
The Group continues to maintain a robust financial position, providing it with sufficient access to liquidity, through a combination of
cash and committed facilities, to meet its needs in the short and medium term. At 30 June 2026, the Group had cash balances of
£18.4m and an unutilised overdraft facility of £5.0m. Total facilities of £350.0m are available to support the Group’s organic and
acquisitive growth initiatives over the coming years, comprising a term loan of £125.0m and an RCF of £225.0m, of which £132.0m
is undrawn. The Group is fully compliant with all covenants in respect of these facilities. The Directors consider that the £5.0m
overdraft and the £350.0m facility enable the Group to meet all current liabilities as they fall due. The loan facility contains two
financial covenants which are tested half yearly, further information on which is available in note 24.
In adopting the going concern basis of preparation, the Board has assessed the Group’s cash flow forecasts. While trading
continues to be good, in forming its outlook on the future financial performance, the Board considered a variety of downsides that
the Group might experience in the context of the current economic environment as a result of the ongoing cost of living crisis and
continued inflationary pressures on the business and a severe but plausible downside scenario was applied to the plan. This
included assumptions such as a negative like-for-like growth and increased costs. Under these latest forecasts, when adjusting for
linked variable costs, the Group is able to continue to operate within its current liquidity headroom. The forecast cash flows also
indicate that the Group will comply with all relevant banking covenants during the forecast period, being at least twelve months from
the approval of the financial statements.
In addition, reverse stress testing has been applied to the model to determine the decline in sales that the Group could absorb
before exhausting the Group’s total liquidity or breaching banking covenants. Such a scenario, and the sequence of events which
could lead to it, is considered to be extremely remote. As a result, the Board expects the Group to have adequate resources to
continue in operation, meet its liabilities as they fall due, retain sufficient available liquidity and not breach the covenant under the
loan facilities for the foreseeable future, being a period of at least twelve months from the approval of the financial statements. The
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, and income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form a basis for making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects that period, or in the period of the revision and future periods if the
revision affects both current and future periods. Due to the inherent uncertainty involved in making assumptions and estimates,
actual outcomes will differ from those assumptions and estimates.
There are no key sources of uncertainty or critical accounting judgements in the Company only accounts.
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
2. Summary of material accounting policies
continued
Critical accounting estimates and judgements
continued
CVS Group plc
Annual Report and Financial Statements 2026
133
There are no critical judgements in relation to the Group accounts.
Accounting estimate (which is not a key source of estimation uncertainty): Research and Development Expenditure Tax Credit
(RDEC)
Certain companies within the Group may be entitled to claim tax credits in relation to the Research and Development
Expenditure Tax Credit (RDEC) scheme in the UK. Tax credits receivable under this scheme are determined to have the substance
of a Government grant and accordingly these tax credits are accounted for under IAS 20. Further information can be found in
the Government grants accounting policy.
Management’s policy remains to discount the amount of RDEC claim recognised to reflect uncertainty, and to recognise the
remainder of any submitted RDEC claim when the uncertainty has been removed through the expiry of the enquiry window. During
the current and prior years, management has continued to assess the level of uncertainty inherent in the Group’s RDEC claims. The
Group now has a greater body of evidence from its established and increasing claims history, together with increased visibility over
the nature and composition of the underlying qualifying activities and expenditure. This provides management with greater
confidence in the reliability of the claim and has reduced the level of uncertainty. Consequently, the Group has applied a reduced
discount to the amount of RDEC it recognises.
Under the previous recognition, the Group would have recognised £10.3m as follows:
Recognised
|
Under the new recognition, the Group has recognised £16.9m as follows:
Recognised
|
The net benefit of the RDEC scheme in the year was £15.7m after associated costs of £1.2m (2025: £15.1m after associated costs
of £1.6m).
During the year the 2025 RDEC claim was submitted resulting in a revision to the estimate to £12.9m (disclosed in 2025: £12.4m).
The enquiry window for the 2024 and 2025 claim years remain open, and the claim in relation to the 2026 year is yet to be
submitted and therefore the maximum amount that could be disallowed in the event of challenge from HMRC is £38.3m. Alternatively,
the maximum income that will be recorded in future periods in relation to research and development expenditure that has already
taken place is estimated to be £2.9m, which would arise if all previously submitted claims were paid in full and the estimate for
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
2. Summary of material accounting policies
continued
134
CVS Group plc
Annual Report and Financial Statements 2026
Standards adopted by the Group for the first time
Two new and revised standards, including the following, are effective for annual periods beginning on or after 1 January 2025:
•
Amendments to IAS 21, ‘Lack of Exchangeability’
• Amendments to the SASB standards to enhance their international applicability
Standards and interpretations of existing standards which are not yet effective and are under review as to their impact on the Group
The following standards and interpretations of existing standards have been published that are mandatory for the Group’s
accounting periods beginning on or after 1 January 2026 or later periods but which the Group has not early adopted:
•
IFRS S1, ‘General Requirements for Disclosure of Sustainability-related Financial Information’ (effective 1 January 2024)
•
IFRS S2, ‘Climate-related Disclosures’ (effective 1 January 2024)
•
Amendments to IFRS 9 and IFRS 7 regarding the classification and measurement of financial instruments (effective 1 January 2026)
•
IFRS 18, ‘Presentation and Disclosure in Financial Statements’ (effective 1 January 2027)
•
IFRS 19, ‘Subsidiaries without Public Accountability: Disclosures’ (effective 1 January 2027)
•
IFRS 20, ‘Regulatory Assets and Regulatory Liabilities’ (effective 1 January 2029)
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s
financial statements are not expected to have an impact on the Group’s reported financial position or performance, with the
The consolidated financial statements include the financial information of the Company and its subsidiary undertakings as at, and
for the year ended, 30 June 2026.
Subsidiaries are all entities over which the Group has control. The results of companies and businesses acquired are included in the
consolidated income statement from the date control passes. They are deconsolidated from the date that control ceases. Where the
Group does not control a subsidiary, it is not consolidated. On acquisition of a company or business, all assets and liabilities that
exist at the date of acquisition are recorded at their fair values, reflecting their condition at that date. Changes that arise during the
measurement period that inform about conditions at the date of the acquisition are adjusted via goodwill, and changes that arise
after the measurement period are credited or charged to the income statement.
Intra-Group transactions and profits are eliminated fully on consolidation. Accounting policies of subsidiaries have been aligned
to ensure consistency with the policies adopted by the Group.
Non‑controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement,
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision Maker (CODM).
The CODM has been determined to be the Board of Directors, as it is primarily responsible for the allocation of resources to segments
and the assessment of the performance of segments. The Group has three operating segments: Veterinary Practices, Laboratories
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred
in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of assets
transferred by the Group and liabilities incurred by the Group to the former owners of the acquiree. Acquisition related costs are
recognised in the income statement as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed
are recognised at their fair values.
Goodwill is measured as the excess of the sum of the consideration transferred over the net of the acquisition date amounts of
the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition date amounts of the
identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the excess is recognised
immediately in the income statement as a bargain purchase gain. For business combinations with a non‑controlling interest, the
Group makes an election for each business combination which typically is to measure non‑controlling interests at their
proportionate share of the acquiree’s identifiable net assets unless deemed more appropriate to measure at fair value.
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
2. Summary of material accounting policies
continued
Business combinations
continued
CVS Group plc
Annual Report and Financial Statements 2026
135
When the consideration transferred by the Group in a business combination includes an asset or liability resulting from a contingent
or deferred consideration arrangement, this additional consideration is either measured at its acquisition date fair value and included
as part of the consideration transferred in a business combination or recorded in line with IAS 19, ‘Employee Benefits’. Where included
as part of the consideration transferred, changes in fair value of the contingent or deferred consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments
are adjustments that arise from additional information obtained during the “measurement period” (which cannot exceed one year
from the acquisition date) about facts and circumstances that existed at the acquisition date.
Contingent or deferred consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in
accordance with IFRS 9 ‘Financial Instruments: Recognition and Measurement’.
Where contingent consideration is recorded in line with IAS 19, ‘Employee Benefits’, where the consideration is considered under
the standard to represent payment for post‑acquisition services rendered, the expense is recognised in accordance with the plans
Property, plant and equipment are stated at cost (being the purchase cost, together with any incidental costs of acquisition)
less accumulated depreciation and any accumulated impairment losses. The assets’ residual values and useful lives are reviewed
annually and adjusted as appropriate. Depreciation is provided so as to write off the cost of property, plant and equipment, less
their estimated residual values, over the expected useful economic lives of the assets in equal annual instalments at the following
principal rates:
Freehold buildings | 2% straight line |
Leasehold improvements | Straight line over the life of the lease |
Fixtures, fittings and equipment | 6–33% straight line |
Motor vehicles | 25% straight line |
Freehold land is not depreciated on the basis that it has an unlimited life.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
Goodwill
With the exception of the acquisition of CVS (UK) Limited, which was accounted for using the principles of merger accounting, all
business combinations are accounted for by applying the acquisition method. Goodwill arising on acquisitions that have occurred
since 1 July 2004 is stated after separate recognition of intangible assets and represents the difference between the fair value of
the purchase consideration and the fair value of the Group’s share of the identifiable net assets of an acquired entity. In respect of
acquisitions prior to 1 July 2004, goodwill is included on the basis of its deemed cost, which represents the amount recorded under
previous Generally Accepted Accounting Practice. Goodwill is carried at cost less accumulated impairment losses and is subject
to annual impairment testing.
Patient data records and trade names
Acquired patient data records and trade names are recognised as intangible assets at the fair value of the consideration paid
to acquire them and are carried at historical cost less provisions for amortisation and impairment.
The fair value attributable to these items acquired through a business combination is determined by discounting the expected future
cash flows to be generated from that asset at the risk-adjusted post-tax weighted average cost of capital for a market participant.
The residual values are assumed to be £nil. While the valuation involves the use of assumptions and estimates that are inherent in
any discounted cash flow model, management does not consider these assumptions to be subject to a level of uncertainty that
could reasonably result in a material change.
Patient data records and trade names are reviewed for impairment if conditions exist that indicate a review is required.
Amortisation is provided so as to write off the cost over the expected economic lives of the assets in equal instalments at the
following principal rates:
Patient data records | 10% per annum |
Trade names | 10% per annum |
Amortisation is charged to administrative expenses.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
2. Summary of material accounting policies
continued
Intangible assets
continued
136
CVS Group plc
Annual Report and Financial Statements 2026
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific
software. These costs are amortised over their estimated useful lives of three to five years and charged to administrative expenses.
Assets that have indefinite useful lives are not subject to amortisation but are tested annually for impairment. Assets that are subject
to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised in the income statement for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
As permitted by IAS 36, ‘Impairment of Assets’, for the purposes of assessing impairment, individual cash-generating units (CGUs)
are grouped at a level consistent with the Group’s operating segments. Recoverable amounts for CGUs are based on value in use,
which is calculated from cash flow projections using data from the Group’s latest internal forecasts, being a one-year detailed
forecast and extrapolated forecasts thereafter, the results of which are approved by the Board. The key assumptions for the
value‑in‑use calculations are those regarding discount rates and growth rates. The Group has considered the Task Force on
Climate-Related Financial Disclosures (TCFD) scenario analysis conducted in undertaking this assessment and concluded no
changes were required to the Group’s estimates or judgements in this area.
In respect of assets other than goodwill, an impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
continued
operations
Cash flows and operations that relate to a major component of the business or geographical region that has been sold or is
Inventories comprise goods held for resale and are stated at the lower of cost and net realisable value on a first-in, first-out basis.
Net realisable value is based on estimated selling price less costs expected to be incurred on disposal. Where necessary, a
Financial assets and financial liabilities are recognised on the Group’s consolidated and Company statement of financial position
when the Group becomes a party to the contractual provisions of the instrument.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision
for impairment. A provision for impairment of trade and other receivables is recognised if there are considered to be expected
credit losses. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since
initial recognition of the financial asset.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there may be no reasonable
expectation of recovery include the failure of the debtor to engage in a payment plan and failure to make contractual payments
In the Company’s financial statements, investments in subsidiary undertakings are initially stated at cost. Provision is made for any
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial liabilities are recorded initially at fair value and subsequently at amortised cost
using the effective interest method, with interest related charges recognised as an expense in finance costs in the income
statement. A financial liability is derecognised only when the obligation is extinguished. An equity instrument is any contract that
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
2. Summary of material accounting policies
continued
Financial instruments
continued
CVS Group plc
Annual Report and Financial Statements 2026
137
Interest-bearing bank loans and overdrafts are initially recorded as the proceeds received, net of associated transaction costs.
Subsequent to initial recognition, interest‑bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least twelve months after the consolidated and Company statement of financial position date. Non‑substantial modifications are
accounted for as a modification of the existing liability, with any modification gain or loss recognised immediately in profit or loss.
Transaction costs incurred in connection with a non-substantial modification adjust the carrying amount of the liability and are
Trade and other payables are non‑interest bearing and are recognised initially at fair value and subsequently measured at amortised
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
The Group uses derivative financial instruments to hedge its exposure to interest rate risks arising from financing activities. The Group
does not hold or issue derivative financial instruments for trading purposes; however, if derivatives do not qualify for hedge accounting
they are accounted for as such.
Derivative financial instruments are recognised and stated at fair value. The fair value of derivative financial instruments is
determined by reference to market values for similar financial instruments, by discounted cash flows, or by the use of option
valuation models. The fair value of interest rate swap arrangements is calculated as the present value of the estimated future cash
flows. Where derivatives do not qualify for hedge accounting, any gains or losses on remeasurement are immediately recognised
in the income statement.
Where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the hedge
relationship and the item being hedged.
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well
as its risk management objectives, the strategy for undertaking various hedging transactions, the nature of the risks being hedged
and the economic relationship between the item being hedged and the hedging instrument. The Group also documents its
assessment, both at hedge inception and on an ongoing basis, of whether or not the derivatives that are used in hedging
transactions are highly effective in offsetting changes in cash flows of hedged items.
The fair value of a hedging derivative is classified as a non‑current asset or liability when the remaining maturity of the hedged item is
Cash flow hedging
Derivative financial instruments are classified as cash flow hedges when they hedge the Group’s exposure to variability in cash flows
that are either attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecasted transaction.
The effective element of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement
where material. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects the
income statement. The classification of the effective portion when recognised in the income statement is the same as the classification
of the hedged transaction. Any element of the remeasurement of the derivative instrument which does not meet the criteria for an
effective hedge is recognised immediately in the income statement within finance costs.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in equity and is recognised in the income statement when the forecast transaction
is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or
loss that was reported in equity is immediately transferred to the income statement.
Cash and cash equivalents comprise cash balances and deposits with maturities of three months or less from inception. Bank
overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
2. Summary of material accounting policies
continued
138
CVS Group plc
Annual Report and Financial Statements 2026
The tax expense represents the sum of the current tax payable, deferred tax and any adjustments in respect of previous periods.
The current tax payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the income
statement because it excludes some items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or tax deductible. The Group’s liability for current tax is calculated on the basis of tax laws and tax rates
that have been enacted or substantively enacted by the consolidated and Company statement of financial position date. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
of assets and liabilities used in computation of taxable profits and their carrying amounts in the consolidated financial statements.
However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred tax is also not accounted for if it arises from initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the
Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in
the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and
interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the consolidated and
Company statement of financial position date and are expected to apply when the related deferred tax asset is realised or the
deferred tax liability is settled.
Current and deferred tax is charged or credited in the income statement, except where it relates to items charged or credited
directly to other comprehensive income or equity, in which case the deferred tax is also recognised in other comprehensive income
or equity respectively.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either the taxable entity
or different taxable entities where there is an intention to settle the balances on a net basis, or to realise the asset and settle the
Revenue is measured in accordance with relevant accounting standards. For all contracts within the scope of IFRS 15, ‘Revenue
from Contracts with Customers’, the Group determines whether enforceable rights and obligations have been created with the
customer and recognises revenue based on total transaction price as estimated at the contract inception, being the amount which
the Group expects to be entitled to and has present enforceable rights to under contract. Revenue is allocated proportionately
across the contract performance obligations and recognised either over time or at a point in time as appropriate.
Service revenue
Revenue represents sales of veterinary services and laboratory diagnostic services which are recognised in accordance with
IFRS 15, at the point in time when the performance obligation is satisfied. Revenue is recognised when the veterinary consultation,
veterinary procedure, cremation or laboratory test is completed.
Members of customer membership schemes, for example the Healthy Pet Club, pay annually or monthly subscription fees and
receive preventative consultations and treatments over a twelve‑month period, being the life of the contract. Annual subscription
fees are received annually in advance and monthly subscription fees are received evenly over a twelve‑month period. Revenue is
recognised in line with individual performance obligations as they are completed in accordance with the contract and not in line with
the receipt of subscription fees. For the majority of customers who pay monthly, this results in revenue recognised in advance of
cash received as performance obligations are weighted towards the beginning of the twelve‑month contract.
The adjustments are made through deferred and accrued income and the contract asset and contract liability for this are shown
in note 20 and note 22, respectively. Revenue is recognised net of the provision to reflect cancellations as a result of animal deaths,
due to our policy not to invoice our customers in such an event. The provision is calculated based on historical membership data.
Strategic Report
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The Directors’ Report
Financial Statements
2. Summary of material accounting policies
continued
Revenue recognition
continued
CVS Group plc
Annual Report and Financial Statements 2026
139
Products
Revenue relating to the sale of veterinary products is recognised according to the terms of sale at the point in time when the
Consistent with standard industry practice, the Group has agreements with suppliers whereby volume related allowances and
various other fees are received in connection with the purchase of goods from those suppliers in the form of rebates. Rebates
received from drug and consumable manufacturers in respect of the Group’s purchases relating to inventories are held by the Group
at the reporting date; the rebate is included within the cost of those inventories and recognised in cost of sales upon sale of
those inventories.
Rebates negotiated on behalf of our buying Group members, MiVetClub and VetShare, are recorded in the statement of financial
position as a receivable and the corresponding liability for the rebate due to the member is recorded as a payable. The associated
commission receivable by the Group is recorded as revenue in the income statement when all obligations attached to the rebate
have been discharged and the rebate can be measured reliably based on the terms of the contract which is taken as at the point
The Group as a lessee
The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognises a right‑of‑use
asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short‑term
leases (defined as leases with a lease term of twelve months or less) and leases of low‑value assets (such as tablets and personal
computers, small items of office furniture and telephones). For these leases, the Group recognises the lease payments as operating
expenses on a straight‑line basis over the terms of the leases unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in‑substance fixed payments), less any lease incentives receivable;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• the lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment
of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using
a revised discount rate;
• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual
value, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount
rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is
used); and
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability
is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount
rate at the effective date of the modification.
The right‑of‑use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and
measured under IAS 37.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
2. Summary of material accounting policies
continued
Leases
continued
The Group as a lessee continued
140
CVS Group plc
Annual Report and Financial Statements 2026
Right-of-use assets are depreciated over the shorter period of the lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right‑of‑use asset reflects that the Group expects to exercise a
purchase option, the related right‑of‑use asset is depreciated over the useful life of the underlying asset. The depreciation starts
at the commencement date of the lease.
The right‑of‑use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss
as described in the property, plant and equipment policy on page 135.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right‑of‑use
asset. The related payments are recognised as expenses in the period in which the event or condition that triggers those payments
occurs and are included in administration expenses in the income statement.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and
associated non‑lease components as a single arrangement. The Group has not used this practical expedient. For a contract that
contains a lease component and one or more additional lease or non‑lease components, the Group allocates the consideration in
the contract to each lease component on the basis of the relative standalone price of the lease component and the aggregate
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in the income statement on a systematic basis over the periods in which the Group recognises
as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related costs are recognised in the income statement in the period in which
they become receivable.
Certain companies within the Group may be entitled to claim tax credits in relation to the Research and Development Expenditure
Tax Credit (RDEC) scheme in the UK. Tax credits receivable under this scheme are determined to have the substance of a Government
grant and accordingly these tax credits are accounted for under IAS 20, ‘Accounting for Government Grants’, as described above.
The tax credits are recognised within administration expenses within the income statement when there is reasonable assurance that
the Group will comply with the relevant conditions and that the tax credits will be received. Given the uncertainty surrounding the
claim, a discount is applied against the full RDEC claim and the remaining balance is recognised when the uncertainty has been
A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a
result of a past event and that can be reliably measured and it is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks
Certain employees of the Group receive part of their remuneration in the form of share‑based payment transactions, whereby
employees render services in exchange for shares or rights over shares (equity‑settled transactions). UK employees may also
acquire shares in the Company through an HMRC-approved employee Save As You Earn (SAYE) scheme, where the employee
makes monthly savings over a three‑year period and has the option to purchase shares at the end of the period.
The fair values of equity‑settled transactions are measured indirectly at the dates of grant using Monte Carlo or Black Scholes option
pricing models, taking into account the terms and conditions upon which the awards are granted. The fair value of share‑based
payments under such schemes is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares
that will eventually vest and adjusted at each reporting date for the effect of non-market-based vesting conditions.
The fair value of options awarded to employees of subsidiary undertakings is recognised as a capital contribution and recorded in
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
2. Summary of material accounting policies
continued
CVS Group plc
Annual Report and Financial Statements 2026
141
The Group separately discloses certain costs or incomes that derive from events or transactions that fall outside the normal
activities of the Group and/or are excluded by virtue of their size or nature in order to reflect management’s view of the
performance of the Group. Judgement is applied in determining whether items are classified as exceptional, and the policy is
applied consistently between reporting periods. Exceptional items are presented within the relevant line items of the consolidated
income statement and are described in further detail in the notes to the financial statements. The separate reporting of exceptional
items does not imply that similar items will not recur in future periods. Judgement applies when recognising an exceptional items
The individual financial statements of each Group company are presented in the currency of the primary economic environment
in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial
position of each Group company are expressed in Sterling, which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements, rounded to the nearest £0.1m, unless stated otherwise.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each year end,
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non‑monetary
items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair
value was determined. Non‑monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in the income statement in the period in which they arise.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are
translated at exchange rates prevailing on the consolidated and Company statement of financial position date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in
which case the exchange rates at the dates of transactions are used. Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in a separate component of equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate. The Group has elected to treat goodwill and fair value adjustments arising on acquisitions
before the date of transition to IFRS as Sterling-denominated assets and liabilities. Exchange differences arising are recognised in
The Group makes contributions to stakeholder and employee personal pension defined contribution schemes in respect of certain
employees. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised
as an employee benefit expense in the period to which they relate. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payment is available.
Employment benefits
Provision is made in the financial statements for all employee benefits. Liabilities for wages and salaries, including annual leave and
Financing costs comprise interest payable on borrowings, debt finance costs, finance costs on the lease liability, and gains and
losses on derivative financial instruments that are recognised in the income statement. Interest expense is recognised in the income
The treasury reserve comprises shares held by an Employee Benefit Trust (EBT) for the purposes of satisfying the exercise
of certain share options vesting under the Group’s Executive Share Plan (ESP), formerly known as the Long-Term Incentive Plan
Upon cancellation of redeemable Preference shares on redemption, a capital redemption reserve was created representing
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
2. Summary of material accounting policies
continued
142
CVS Group plc
Annual Report and Financial Statements 2026
The merger reserve resulted from the acquisition of CVS (UK) Limited and represents the difference between the value of the
As permitted by Section 408 of the Companies Act 2006 the Company has elected not to present its own income statement
or statement of comprehensive income for the year. The profit/(loss) attributable to the Company is disclosed in the footnote to the
Liabilities relating to bank guarantees issued by the Company on behalf of its group undertakings are initially recognised at fair
value and subsequently measured at the higher of the expected credit loss allowance and the amount initially recorded less,
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (being foreign currency risk, interest rate risk and other
price risks), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative instruments
to manage its exposure to interest rate movements. It is not the Group’s policy to actively trade in derivatives.
The Board monitors financial risk management. The policies set by the Board of Directors are implemented by the Group’s
finance department.
i) Foreign exchange currency rate risk
The Group has a policy to minimise foreign exchange currency rate risk through the regular monitoring of foreign currency flows.
The Group is largely able to manage the exchange rate risk arising from operations through the natural matching of payments and
receipts denominated in the same currencies. Currency exposures are reviewed regularly and all significant foreign exchange
transactions are approved by Group management.
For subsidiaries incorporated in Australia, a natural hedge is applied where both revenue and expenditure are denominated in
Australian Dollars. Aside from this, the Group does not hedge any foreign currency transactions but continues to keep this approach
under review.
assets. The amounts are calculated retrospectively by applying the current‑year exchange rates to the prior‑year results so that the
current‑year exchange rates are applied consistently across both periods. Changing the comparative result illustrates the effect of
Applying the current‑year exchange rates to the results of the prior year has the following effect on profit before tax and net assets:
Revised
|
If the Australian Dollar strengthened or weakened by 10% against the Pound Sterling, the Group’s functional currency, the effect on
the income statement and items that are recognised directly in equity would be +/-£0.3m. The analysis covers only financial assets
and liabilities held at the balance sheet date and assumes that all other variables, in particular interest rates, remain constant. The
impact is prior to the effect of tax.
ii) Cash flow and fair value interest rate risk
The Group has interest-bearing assets and liabilities. The Group’s income and operating cash inflows are substantially independent
of changes in market interest rates. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable
rates expose the Group to cash flow interest rate risk.
At the year end, the Group had interest hedging arrangements in place covering £100.0m (2025: £100.0m) which expire in February
2028 at an average fixed rate of 3.8310%. This allows the Group to minimise its exposure to significant interest rate increases whilst
enabling the Group to take advantage of interest rate reductions. The strategy for undertaking the hedge is to match a portion of the
loan liability with a derivative that allows interest to float within an agreed range and thereby limits the cash flow exposure relating
to interest. The remaining drawn debt of £118.0m (2025: £47.5m) is unhedged.
Excluding the impact of the interest rate swap arrangement, bank borrowings from 22 May 2026 bear interest at 1.25% to 2.50%
(previously 1.45% to 2.70%) above SONIA. The applicable interest rate is dependent upon the bank test net debt to bank test
EBITDA ratio. During the year the bank borrowings carried a rate averaging 1.6% above SONIA.
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
3. Financial risk management
continued
Financial risk factors
continued
a) Market risk continued
ii) Cash flow and fair value interest rate risk
continued
CVS Group plc
Annual Report and Financial Statements 2026
143
At 30 June 2026, the Group has considered the impact of movements in interest rates over the past year and has concluded that
a 1% movement is a reasonable benchmark. At 30 June 2026, if interest rates on Sterling‑denominated borrowings had been 1%
higher or lower, with all other variables held constant, post‑tax profit and the movement in net assets for the year would have been
approximately £0.8m (2025: £0.7m) lower or higher, mainly as a result of the movement in interest rates on the floating rate
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment.
A provision for impairment of trade receivables is recognised on trade receivables if there are considered to be expected credit
losses. The amount of expected credit losses is calculated using the simplified approach as allowable under IFRS 9 and is updated
at each reporting date to reflect changes in credit risk since initial recognition of the financial asset.
Losses arising from impairment are recognised in the statement of comprehensive income in administrative expenses.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies.
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s diverse customer base. Sales made
other than on a cash basis are limited to a small part of the Group’s overall business, and within these business areas the Group
has appropriate credit checking facilities and procedures in place. Customer accounts are also monitored on an ongoing basis
and appropriate action is taken where necessary to minimise any credit risk. The Directors therefore believe there is no further
credit risk provision required in excess of the normal provision for impaired receivables.
The maximum exposure to credit risk at 30 June 2026 is the fair value of each class of receivable as disclosed in note 20 to the
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities. The Group actively maintains cash balances and a mix of long‑term and
short‑term finance facilities that are designed to ensure the Group has sufficient available funds for operations and acquisitions.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.
The table below summarises the remaining contractual maturity for the Group’s financial liabilities. The amounts shown are the
contractual undiscounted cash flows, which include estimated interest, analysed by contractual maturity. When the amount payable
or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by
the yield curves existing at the reporting date.
In more than
|
In more than
|
1.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
3. Financial risk management
continued
144
CVS Group plc
Annual Report and Financial Statements 2026
Capital risk management
The Group’s policy is to maintain a strong capital base, defined as bank facilities plus total shareholders’ equity, so as to maintain
investor, creditor and market confidence and to sustain future development of the business. Within this overall policy, the Group
seeks to maintain an optimum capital structure with a mixture of debt and retained earnings.
The bank facilities include financial covenants and a number of general undertakings. There have been no breaches of the terms
of the respective loan agreements, breaches of covenants or defaults during the current or comparative years.
Funding needs are reviewed periodically and also each time a significant acquisition is made. A number of factors are considered
which include the bank test net debt/bank test EBITDA ratio, future funding needs (usually potential acquisitions) and Group
banking arrangements.
2026 | 2025 | |
£m | £m | |
Bank test net debt | 199.6 | 131.4 |
Bank test EBITDA | 122.1 | 111.4 |
Ratio | 1.63 | 1.18 |
The ratio above is calculated for the bank covenants as bank test net debt divided by bank test EBITDA.
Bank test net debt/net bank borrowings
Is defined as: drawn bank debt less cash and cash equivalents.
Bank test EBITDA
Is defined as: adjusted EBITDA annualised for the effect of acquisitions, adding back share option costs, and on an accounting basis
prior to the adoption of IFRS 16 and excluding the share attributable to non-controlling interests. Refer to the Alternative
performance measures glossary from page 176 for the calculation of adjusted EBITDA.
There were no changes to the Group’s approach to capital management during the year.
The primary sources of funding for the Group are internally generated cash and syndicated borrowings. The Group’s £5.0m
overdraft facility was undrawn at 30 June 2026 (2025: undrawn) and £132.0m of the revolving credit facility was undrawn at
30 June 2026 (2025: £202.5m revolving credit facility undrawn).
The Group’s financial assets and liabilities measured at fair value as at 30 June 2026 are categorised below according to the levels
of the fair value hierarchy:
•
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1
);
• inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2
); and
•
inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3
Segment information is presented in respect of the Group’s business and geographical segments. The primary format, operating
segments, is based on the Group’s management and internal reporting structure and monitored by the Group’s Chief Operating
Decision Maker (CODM).
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Trade between operating segments is eliminated through the Central administration segment. Unallocated items
comprise mainly interest‑bearing borrowings and associated costs, tax related assets and liabilities, acquisition costs which are
included within costs relating to business combinations, and Head Office salary and premises costs.
Revenue comprises £504.1m of fees and £208.7m of goods (2025: £473.1m and £200.1m respectively).
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
4. Segment reporting
continued
CVS Group plc
Annual Report and Financial Statements 2026
145
The Group is split into three operating segments (Veterinary Practices, Laboratories and Online Retail Business) and a centralised
support function (Central administration) for business segment analysis. In identifying these operating segments, management
generally follows the Group’s service lines representing its main products and services.
Each of these operating segments is managed separately as each segment requires different specialisms, marketing approaches
and resources. Intra-Group sales eliminations are included within the Central administration segment. Central administration
includes costs relating to the employees and property and other overhead costs associated with the centralised support function
together with finance costs arising on the Group’s borrowings.
Veterinary
|
Veterinary
|
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
4. Segment reporting
continued
146
CVS Group plc
Annual Report and Financial Statements 2026
The business operates predominantly in the UK. As at 30 June 2026, it has 57 veterinary practice sites in Australia (2025: 43).
It performs a small amount of laboratory work and teleradiology work for Europe-based clients and a small amount of teleradiology
work for clients based in the rest of the world. In accordance with IFRS 8, ‘Operating Segments’, no segment results are presented
for operations in Australia as it meets the aggregation criteria, or trade with clients in Europe or the rest of the world which is not
considered material for separate disclosure. Neither Australian nor trade with clients in Europe and the rest of the world are
reported separately for management reporting purposes.
Revenue and non‑current assets (excluding financial instruments) split between the United Kingdom and Australia are shown below:
Revenue
Non‑current assets
2026
2026
UK
£633.7m
UK
£429.3m
Australia
£79.1m
Australia
£190.0m
2025
2025
UK
£621.1m
UK
£436.8m
Australia
£52.1m
Australia
2026 | 2025 | |
£m | £m | |
Interest received from bank accounts | (1.2) | — |
Interest expense on bank loans and overdraft | 10.6 | 11.2 |
Interest expense on lease liabilities | 5.3 | 5.1 |
Amortisation of debt arrangement fees | 0.9 | 0.9 |
Finance expense | 15.6 | 17.2 |
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
CVS Group plc
Annual Report and Financial Statements 2026
147
2026 | 2025 | ||
Note | £m | £m | |
Amortisation of intangible assets | 12 | 26.0 | 26.0 |
Impairment of intangible assets | 12 | 2.0 | — |
Gain on bargain purchase | (0.5) | — | |
Depreciation of property, plant and equipment | 13 | 21.0 | 20.4 |
Depreciation of right‑of‑use assets | 14 | 17.7 | 18.1 |
Loss on disposal of property, plant and equipment and disposal and impairment of | |||
right‑of‑use assets | 4 | 2.3 | 1.1 |
Depreciation, amortisation and profit on disposal attributable to discontinued operations | 4 | — | (1.7) |
Employee benefit expenses | 7 | 348.2 | 325.9 |
Cost of inventories recognised as an expense (included in cost of sales) | 143.6 | 138.5 | |
Repairs and maintenance expenditure on property, plant and equipment | 8.3 | 8.1 | |
Movement in provision for expected credit losses | 20 | 1.8 | 1.4 |
Exceptional items (see below) | 10.6 | 6.0 | |
RDEC income 1 | (15.7) | (15.1) | |
Other expenses | 99.9 | 94.7 | |
Total cost of sales and administrative expenses | 665.2 | 623.4 |
1.
In the course of their ordinary work, our colleagues perform work which advances the overall knowledge in the veterinary field and seeks to resolve
scientific and technological uncertainties. In the current year, claims were submitted in respect of the 2025 financial year under the Research and
Development Expenditure Credits (RDEC) scheme to HMRC. The amount of qualifying expenditure in relation to 2026 is yet to be determined, in part
due to the uncertainty around all claims made to date, which is explained more fully in note 2. However, an estimate for 2026 has been recognised
of £13.2m with a provision against this of £1.0m, resulting in a net £12.2m being recognised. The amount of research and development expenditure
within cost of sales and administrative expenses is therefore not separately disclosed. RDEC income of £15.7m is made up of gross RDEC of £16.9m
less directly associated costs of £1.2m (2025: £15.1m made up of gross RDEC of £16.7m less directly associated costs of £1.6m). Further details of
this, disaggregated by claim year, are shown in note 2, on page 133.
Exceptional items
An exceptional item contains certain costs or incomes that derive from events or transactions that fall outside the normal activities
of the Group and/or are excluded by virtue of their size or nature in order to reflect management’s view of the performance of
the Group. Judgement is applied in determining whether items are classified as exceptional, and the policy is applied consistently
between reporting periods.
2026 | 2025 | |
£m | £m | |
Competition and Markets Authority investigation 1 | 1.7 | 3.9 |
Competition and Markets Authority remedies 2 | 5.1 | — |
Restructuring costs 3 | — | 1.9 |
Main Market move 4 | 3.8 | — |
Cyber incident legal costs 5 | — | 0.2 |
10.6 | 6.0 |
1.
Cost incurred in relation to engagement with the Competition and Markets Authority investigation including legal and economist fees.
2.
Cost incurred in relation to Competition and Markets Authority remedies, including rebranding costs.
3.
Cost incurred regarding restructuring costs includes costs in relation to the Deputy CEO who was paid his notice in line with his service agreement
whilst on gardening leave which resulted in additional costs and employment costs in relation to the closure of our Careline operations.
4.
Costs incurred in relation to the Group’s transition from the Alternative Investment Market (AIM) to the Main Market of the London Stock Exchange.
5.
Costs in relation to the cyber incident which occurred in 2024 primarily include legal and specialist advisor costs.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
6. Expenses/(income) by nature
continued
148
CVS Group plc
Annual Report and Financial Statements 2026
During the year the Group obtained the following services from the Company’s auditor at the costs detailed below:
2026 | 2025 | |
£000 | £000 | |
Audit services | ||
Fees payable to the Group’s auditor for: | ||
The audit of the parent company and consolidated financial statements | 263 | 263 |
The audit of the Company’s subsidiaries pursuant to legislation | 637 | 638 |
900 | 901 |
2026 | 2025 | |
£000 | £000 | |
Other services | ||
Fees payable to the Group’s auditor for: | ||
Reporting Accountant | 610 | — |
Review of the consolidated interim financial statements | 10 | — |
620 | — |
Group
2026 | 2025 | ||
Employee benefit expense for the Group | Note | £m | £m |
Wages and salaries | 297.0 | 284.0 | |
Social security costs | 35.8 | 29.0 | |
Other pension costs | 31 | 13.3 | 11.7 |
Share‑based payments | 11 | 2.1 | 1.2 |
348.2 | 325.9 |
The employee benefit expense included within cost of sales is £244.5m (2025: £241.9m). The balance is recorded within
administrative expenses. Contingent consideration of £10.5m (2025: £10.6m), accounted for under IAS 19, ‘Employee Benefits’,
is expensed to the income statement and included within other expenses in note 6 of the financial statements.
The average monthly number of people employed by the Group, for continuing operations, (including Executive and Non‑Executive
Directors) during the year, analysed by category, was as follows:
2026 | 2025 | |
Number | Number | |
Veterinary surgeons and pathologists | 2,532 | 2,447 |
Nurses, practice ancillaries and technicians | 6,175 | 6,127 |
Central support | 331 | 290 |
9,038 | 8,864 |
Company
The average monthly number of people employed by the Company is five (2025: four), being the Non-Executive Directors.
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The Directors’ Report
Financial Statements
CVS Group plc
Annual Report and Financial Statements 2026
149
Highest‑paid Director | Directors’ emoluments | |||
2026 | 2025 | 2026 | 2025 | |
£m | £m | £m | £m | |
Salaries and other short‑term employee benefits | 0.5 | 0.7 | 1.6 | 1.8 |
Company contributions to money purchase schemes | — | — | — | — |
0.5 | 0.7 | 1.6 | 1.8 | |
Retirement benefits are accruing to three Directors (2025: three) under a personal pension plan. The remuneration of the Executive
Directors, amounting to £1.2m (2025: £1.5m), is borne by the subsidiary company CVS (UK
) Limited, without recharge. The remuneration
of the Non-Executive Directors, amounting to £0.4m (2025: £0.3m), is borne by the subsidiary company CVS (UK
) Limited and recharged
to the Company. Directors’ remuneration is disclosed on an individual basis in the Remuneration Committee Report on pages 93 to 109.
Share options
Under the Company’s SAYE schemes the Directors have the following options at the year end:
Earliest exercise date | Number | ||||
SAYE scheme | Date of grant | and vesting date | Exercise price | of shares | |
R Fairman | SAYE16 | 24 November 2023 | 01 January 2027 | 1,146p | 550 |
R Alfonso | SAYE16 | 24 November 2023 | 01 January 2027 | 1,146p | 550 |
P Higgs | SAYE16 | 24 November 2023 | 01 January 2027 | 1,146p | 517 |
R Fairman | SAYE17 | 26 November 2024 | 01 January 2028 | 847p | 722 |
R Alfonso | SAYE17 | 26 November 2024 | 01 January 2028 | 847p | 680 |
P Higgs | SAYE17 | 26 November 2024 | 01 January 2028 | 847p | 722 |
R Fairman | SAYE18 | 26 November 2025 | 01 January 2029 | 1,136p | 507 |
R Alfonso | SAYE18 | 26 November 2025 | 01 January 2029 | 1,136p | 538 |
P Higgs | SAYE18 | 26 November 2025 | 01 January 2029 | 1,136p | 538 |
Under the Company’s Executive Share Plan (ESP), formerly named Long-Term Incentive Plans (LTIPs) the Directors have the
following options at the year end:
Market price on | Earliest exercise date | Number | |||
ESP | Date of grant | date of grant | and vesting date | of shares | |
R Fairman | ESP17 | 29 September 2023 | 1,630p | 30 June 2026 | 34,419 |
R Alfonso | ESP17 | 29 September 2023 | 1,630p | 30 June 2026 | 17,884 |
P Higgs | ESP17 | 29 September 2023 | 1,630p | 30 June 2026 | 6,212 |
R Fairman | ESP18 | 04 October 2024 | 1,058p | 30 June 2027 | 55,581 |
R Alfonso | ESP18 | 04 October 2024 | 1,058p | 30 June 2027 | 30,460 |
P Higgs | ESP18 | 04 October 2024 | 1,058p | 30 June 2027 | 26,144 |
R Fairman | ESP19 | 31 July 2025 | 1,228p | 30 June 2028 | 79,550 |
R Alfonso | ESP19 | 31 July 2025 | 1,228p | 30 June 2028 | 54,495 |
P Higgs | ESP19 | 31 July 2025 | 1,228p | 30 June 2028 | 46,774 |
The exercise price for all shares awarded under ESPs is 0.2p.
No ESPs vested in the year; for further details of the above schemes see the Remuneration Committee Report on pages 93 to 109.
Key management compensation
Key management is considered to be those on the Executive Committee (being the Executive Directors and other senior
management) and the Non‑Executive Directors. The employment costs of key management are as follows:
2026 | 2025 | |
£m | £m | |
Salaries and other short‑term employee benefits | 2.0 | 2.4 |
Post-employment benefits | 0.1 | 0.1 |
Share‑based payments | 1.2 | 1.1 |
3.3 | 3.6 |
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
150
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Annual Report and Financial Statements 2026
a) Analysis of tax expense recognised in the income statement
2026 | 2025 | ||
Note | £m | £m | |
Current tax | |||
Current tax on profits for the year | 19.1 | 17.2 | |
Adjustments in respect of previous years | (0.3) | (1.4) | |
Total current tax charge | 18.8 | 15.8 | |
Deferred tax | |||
Origination and reversal of temporary differences | (5.3) | (4.6) | |
Adjustments in respect of previous years | 0.7 | 2.1 | |
Total deferred tax credit | 25 | (4.6) | (2.5) |
Total tax expense | 14.2 | 13.3 | |
Income tax expense attributable to: | |||
Profit from continuing operations | 14.2 | 13.5 | |
Loss from discontinued operations | 32 | — | (0.2) |
14.2 | 13.3 |
b) Reconciliation of effective tax charge
The UK corporation tax rate is calculated using the UK standard rate of tax for the year of 25.0% (2025: 25.0%). Taxation for other
jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The total taxation charge for the year differs from the
theoretical amount that would arise using the standard rate of UK corporation tax of 25.0% (2025: 25.0%) as explained below
:
2026 | 2025 | |
£m | £m | |
Profit before tax for continuing operations | 32.0 | 32.6 |
Profit before tax for discontinued operations | — | 33.7 |
Profit before tax | 32.0 | 66.3 |
Effective tax charge of 25.0% (2025: 25.0%) | 8.0 | 16.6 |
Effects of: | ||
Expenses not deductible for tax purposes | 5.6 | 4.0 |
Exempt gain on sale of subsidiaries and gain on bargain purchase | (0.2) | (8.4) |
Adjustments to deferred tax charge in respect of previous years | 0.7 | 2.1 |
Adjustments to current tax charge in respect of previous years | (0.3) | (1.4) |
Impact of tax rates in overseas jurisdictions | 0.4 | 0.4 |
Total tax expense | 14.2 | 13.3 |
Factors affecting the current tax charge
The effective tax rate on reported profits is 44.4% (2025: 20.1%) and increased from prior year mainly due to the combined impact
of the disposal of the subsidiaries in prior year resulting in non‑taxable gains and an increase in non‑deductible expenses
associated with acquisitions.
The total tax charge of £14.2m (2025: £13.5m) on continuing operations would represent an effective tax rate on profit before tax for
continuing operations of 44.4% (2025: 41.4%). The increase is due to an increase in expenses not deductible for tax purposes.
Changes in tax rates
The Group’s future tax charge, and effective tax rate, could be affected by several factors including changes in tax laws and rates in
the respective jurisdictions. There has been no impact in the current year from tax rate changes.
Uncertain tax position
The Group recognises taxation based on estimates of whether taxes will be due. No material uncertain tax positions exist at 30 June 2026.
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
9. Tax expense
continued
b) Reconciliation of effective tax charge
continued
CVS Group plc
Annual Report and Financial Statements 2026
151
OECD Pillar Two – global minimum tax
The OECD Pillar Two global minimum tax model rules of the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (the
Pillar Two rules) legislation came into effect in the UK for accounting periods from 1 January 2024, making it effective for the Group
from 1 July 2024.
The Group has applied the temporary exception from the accounting requirements for deferred taxes in IAS 12. Accordingly, the
Group neither recognises nor discloses information about deferred tax assets and liabilities related to Pillar Two.
Under the Pillar Two rules, a top-up tax arises where the effective tax rate of the Group’s operations in any individual jurisdiction,
calculated using principles set out in Pillar Two legislation, is below a 15% minimum rate. Any resulting tax would be payable by
CVS Group plc to the UK tax authority (HMRC) being the Group’s ultimate parent. The Group has performed an assessment of the
Group’s potential exposure to Pillar Two income taxes. The assessment is based on the most recent tax filings, country-by-country
reporting and financial statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax
rates in all jurisdictions in which the Group operated are above 15% and consequently no top-up tax liability has been recognised in
a) Reconciliation of earnings
2026 | 2025 | |
£m | £m | |
Profit from continuing operations | 17.8 | 19.1 |
Less: profit attributable to non‑controlling interest | (0.5) | (0.2) |
Profit for the year from continuing operations attributable to equity holders of the Company | 17.3 | 18.9 |
Profit for the year from discontinued operations attributable to equity holders of the Company | — | 33.9 |
Profit for the year attributable to equity holders of the Company | 17.3 | 52.8 |
b) Basic
2026 | 2025 | |
Weighted average number of Ordinary shares in issue | 70,821,844 | 71,739,444 |
Basic earnings per share from continuing operations attributable to the ordinary equity holders | ||
of the Company (pence) | 24.4 | 26.3 |
Basic earnings per share from discontinued operations attributable to the ordinary equity holders of | ||
the Company (pence) | — | 47.4 |
Total basic earnings per share attributable to the ordinary equity holders of the Company (pence) | 24.4 | 73.7 |
c) Diluted
For diluted earnings per share, the weighted average number of Ordinary shares in issue is adjusted to assume conversion of all
dilutive potential Ordinary shares. The Group has two types of dilutive potential Ordinary shares, being: those share options granted
to employees where the exercise price is less than the average market price of the Company’s Ordinary shares during the year (SAYE)
and unvested shares within the ESP scheme that have met the relevant performance conditions at the end of the reporting period.
2026 | 2025 | |
Weighted average number of Ordinary shares in issue | 70,821,844 | 71,739,444 |
Adjustment for contingently issuable shares – ESPs | 5,914 | — |
Adjustment for contingently issuable shares – SAYE schemes | 130,941 | 9,187 |
Weighted average number of Ordinary shares for diluted earnings per share | 70,958,699 | 71,748,631 |
Diluted earnings per share from continuing operations attributable to the ordinary equity holders | ||
of the Company (pence) | 24.3 | 26.2 |
Diluted earnings per share from discontinued operations attributable to the ordinary equity holders | ||
of the Company (pence) | — | 47.4 |
Total diluted earnings per share attributable to the ordinary equity holders of the Company (pence) | 24.3 | 73.6 |
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
10. Earnings per Ordinary share
continued
152
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Annual Report and Financial Statements 2026
d) Alternative performance measure: adjusted earnings per share
2026 | 2025 | ||
Note | £m | £m | |
Profit before tax for continuing operations | 32.0 | 32.6 | |
Adjustments for: | |||
Gain on bargain purchase | (0.5) | — | |
Amortisation of intangible assets | 12 | 26.0 | 26.0 |
Amortisation of intangible assets attributable to discontinued operations | 4 | — | (0.6) |
Impairment of intangible assets | 12 | 2.0 | — |
Costs relating to business combinations | 15 | 14.8 | 14.9 |
Exceptional items | 6 | 10.6 | 6.0 |
Adjusted profit before tax | 84.9 | 78.9 | |
Tax expense amended for the above adjustments | (23.3) | (21.2) | |
Adjusted profit after tax | 61.6 | 57.7 | |
Less: adjusted profit after tax attributable to non-controlling interest | (1.0) | (0.2) | |
Adjusted profit after tax attributable to the parent | 60.6 | 57.5 | |
Weighted average number of Ordinary shares in issue | 70,821,844 | 71,739,444 | |
Weighted average number of Ordinary shares for diluted earnings per share | 70,958,699 | 71,748,631 | |
Pence | Pence | ||
Adjusted earnings per share | 85.6 | 80.1 | |
Diluted adjusted earnings per share | 85.4 | 80.1 |
Executive Share Plans (ESPs), formerly named Long-Term Incentive Plans (LTIPs)
The Group operates incentive schemes for certain senior management and Executive Directors, the CVS Group Executive Share Plans.
Under the ESP schemes, awards are made at an effective nil cost, vesting over a three-year performance period conditional upon
the Group’s adjusted earnings per share growth and total shareholder return (TSR). The ESP scheme arrangements are a mixture
of equity settled and cash settled. Cash-settled ESP schemes are linked to a number of shares, the value of which is settled in cash
upon exercise.
Details of the share options outstanding during the year under the ESP schemes are as follows:
July 2025 scheme | July 2024 scheme | July 2023 scheme | July 2022 scheme | |
(ESP19/19 (c)) | (ESP18/18 (c)/18(d)) | (ESP17) | (ESP16/16 (b)) | |
Number of | Number of | Number of | Number of | |
share awards | share awards | share awards | share awards | |
Outstanding at 1 July 2025 | — | 215,797 | 106,539 | 83,432 |
Granted during the year | 287,296 | — | — | — |
Expired during the year | — | — | — | (77,517) |
Forfeited during the year | (22,174) | (30,580) | (11,077) | — |
Exercised during the year | — | — | — | — |
Outstanding at 30 June 2026 | 265,122 | 185,217 | 95,462 | 5,915 |
Exercisable at 30 June 2026 | — | — | — | 5,915 |
Options are exercisable at 0.2p per share. The weighted average exercise price was 0.2p at the beginning and end of the period.
The options outstanding at the year end under ESP19, ESP19(c), ESP18, ESP18(c), ESP18(d), ESP17, ESP16 and ESP16(b) have
a weighted average remaining contractual life of two years for ESP19/19(c), one year for ESP18/18(c)/18(d), and nil years for ESP17
and ESP16(b), respectively.
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Corporate Governance
The Directors’ Report
Financial Statements
11. Share-based payments
continued
Executive Share Plans (ESPs), formerly named Long-Term Incentive Plans (LTIPs)
continued
CVS Group plc
Annual Report and Financial Statements 2026
153
The share-based payment charge for the year in respect of the options issued under the ESP schemes amounted to £0.8m (2025: £0.1m)
and has been charged to administrative expenses. Employer National Insurance contributions and dividend equivalent payments of
£0.1m (2025: £nil) have been charged to administrative expenses in respect of the ESP scheme transactions and are treated as
cash‑settled transactions.
Further details of the above schemes, to the extent that they relate to statutory Directors, are included in the Remuneration
Committee Report on pages 93 to 109. Details of ESP16(b), ESP16(c), ESP18(b), ESP18(c), ESP18(d) ESP19(b), ESP19(c) and ESP19(d)
are shown below:
The carrying amount included within trade and other payables relating to cash-settled schemes is £0.1m (2025: £0.1m).
Market price | Earliest exercise | ||||||
of shares on | date and date of | Number | |||||
Scheme | Date of grant | date of grant | vesting shares | Exercise price | of shares | Settlement | Vesting conditions |
To remain employed until | |||||||
ESP16(b) | 30 September 2022 | £16.90 | 30 June 2025 | 0.2p | 5,915 | Equity settled | 30 September 2025 |
ESP16(c) | 12 October 2022 | £17.53 | 30 June 2025 | 0.2p | 5,915 | Cash settled | None |
ESP18(b) | 4 October 2024 | £11.51 | 30 June 2027 | 0.2p | 1,352 | Cash settled | Same as ESP18 |
ESP18(c) | 4 November 2024 | £9.43 | 30 June 2027 | 0.2p | 3,181 | Equity settled | Same as ESP18 |
ESP18(d) | 13 January 2025 | £8.26 | 30 June 2027 | 0.2p | 1,794 | Equity settled | Same as ESP18 |
ESP19(b) | 31 July 2025 | £12.28 | 30 June 2028 | 0.2p | 1,209 | Cash settled | Same as ESP19 |
To remain employed until | |||||||
ESP19(c) | 14 October 2025 | £14.00 | 30 June 2028 | 0.2p | 10,932 | Equity settled | 14 October 2028 |
ESP19(d) | 14 October 2025 | £14.00 | 30 June 2028 | 0.2p | 3,644 | Cash settled | None |
Save As You Earn (SAYE)
The Group operates an incentive scheme for all UK employees, the CVS Group SAYE plan, an HM Revenue & Customs approved
scheme. Details of the share options outstanding during the year under the SAYE schemes are as follows:
SAYE18 | SAYE17 | SAYE16 | SAYE15 | SAYE14 | |
Number of | Number of | Number of | Number of | Number of | |
share awards | share awards | share awards | share awards | share awards | |
Outstanding at 1 July 2025 | — | 581,361 | 410,069 | 192,332 | 94,261 |
Granted during the year | 370,637 | — | — | — | — |
Forfeited during the year | (26,636) | (67,380) | (61,209) | (19,402) | (94,261) |
Exercised during the year 1 | — | (1,044) | (646) | — | — |
Outstanding at 30 June 2026 | 344,001 | 512,937 | 348,214 | 172,930 | — |
Exercisable at 30 June 2026 | 917 | 1,953 | 1,847 | 169,318 | — |
1. The weighted average share price at the date of exercise was £12.78.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
11. Share-based payments
continued
Save As You Earn (SAYE)
continued
154
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Annual Report and Financial Statements 2026
Further information on the SAYE schemes is shown in the table below:
SAYE18 | SAYE17 | SAYE16 | SAYE15 | |
Date opened for subscription | November 2025 | November 2024 | November 2023 | November 2022 |
Date options granted | January 2026 | January 2025 | January 2024 | January 2023 |
Discount on closing mid‑market price | 10% | 10% | 20% | 20% |
Exercise price | £11.36 | £8.47 | £11.46 | £15.15 |
Remaining contractual life | 2 years 5 months | 1 year 5 months | 5 months | nil |
All of the SAYE schemes vest over a three‑year period. There are no performance conditions attached to the SAYE scheme.
The weighted average exercise price at the beginning of the period for the options outstanding was £11.26 and at the end of the
period was £10.79.
The share‑based payment charge for the year in respect of the options issued under the SAYE schemes amounted to £1.3m
(2025: £1.1m) and has been charged to administrative expenses.
Options for all schemes were valued using either the Monte Carlo or Black Scholes option pricing model. The fair value per option
granted in the year and the assumptions used in the calculation are as follows:
ESP19 | ESP19(b) | ESP19(c) | ESP19(d) | SAYE18 | |
Grant date | 31 July 2025 | 31 July 2025 | 14 October 2025 | 14 October 2025 | 26 November 2025 |
Share price at grant date | £12.26 | £12.26 | £14.00 | £14.00 | £11.92 |
Fair value per option | £10.00 | £10.00 | £14.00 | £14.00 | £4.18 |
Exercise price | 0.2p | 0.2p | 0.2p | 0.2p | £11.36 |
Number of employees | 36 | 1 | 1 | 1 | 1,491 |
Shares under option at date | |||||
of grant | 276,364 | 1,209 | 10,932 | 3,644 | 370,637 |
Vesting period/option life/ | |||||
expected life | 3 years | 3 years | 3 years | 3 years | 3 years |
Weighted average remaining | |||||
contractual life | 2 years | 2 years | 2 years | 2 years | 2 years 5 months |
Expected volatility 1 | 48.7% | 48.7% | — | — | 42.6% |
Expected dividends expressed | |||||
as a dividend yield | — | — | — | — | 0.7% |
Settlement | Equity settled | Cash settled | Equity settled | Cash settled | Equity settled |
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Corporate Governance
The Directors’ Report
Financial Statements
CVS Group plc
Annual Report and Financial Statements 2026
155
Computer | ||||||
Trade | Patient data | software and | ||||
Goodwill | names | records | websites | Total | ||
Group | Note | £m | £m | £m | £m | £m |
Cost | ||||||
At 1 July 2024 | 221.7 | 1.5 | 322.5 | 14.5 | 560.2 | |
Exchange differences | (5.9) | — | (4.5) | — | (10.4) | |
Additions arising through business combinations | 15 | 17.6 | — | 15.7 | — | 33.3 |
Fair value adjustments in respect of prior periods | 15 | 0.9 | — | (0.1) | — | 0.8 |
Other additions | — | — | — | 7.8 | 7.8 | |
Disposals | (2.6) | — | (7.6) | (1.4) | (11.6) | |
At 30 June 2025 | 231.7 | 1.5 | 326.0 | 20.9 | 580.1 | |
Exchange differences | 7.0 | — | 6.1 | — | 13.1 | |
Additions arising through business combinations | 15 | 28.2 | — | 26.6 | — | 54.8 |
Fair value adjustments in respect of prior periods | 15 | (0.1) | — | 0.3 | 0.3 | 0.5 |
Other additions | — | — | — | 7.9 | 7.9 | |
Disposals | — | — | — | (3.2) | (3.2) | |
At 30 June 2026 | 266.8 | 1.5 | 359.0 | 25.9 | 653.2 | |
Accumulated amortisation | ||||||
At 1 July 2024 | — | 1.5 | 216.6 | 7.2 | 225.3 | |
Exchange differences | — | — | (0.3) | — | (0.3) | |
Amortisation for the year | — | — | 24.0 | 2.0 | 26.0 | |
Disposals | — | — | (7.4) | (1.1) | (8.5) | |
At 30 June 2025 | — | 1.5 | 232.9 | 8.1 | 242.5 | |
Exchange differences | — | — | 0.9 | — | 0.9 | |
Amortisation for the year | — | — | 21.8 | 4.2 | 26.0 | |
Impairment | — | — | — | 2.0 | 2.0 | |
Disposals | — | — | — | (3.2) | (3.2) | |
At 30 June 2026 | — | 1.5 | 255.6 | 11.1 | 268.2 | |
Net book amount | ||||||
At 30 June 2026 | 266.8 | — | 103.4 | 14.8 | 385.0 | |
At 30 June 2025 | 231.7 | — | 93.1 | 12.8 | 337.6 | |
At 30 June 2024 | 221.7 | — | 105.9 | 7.3 | 334.9 |
Amortisation and impairment are charged to administrative expenses in the income statement.
The patient data records and trade names were acquired as a component of business combinations. See note 15 for further details
of current‑year acquisitions.
There are no intangible assets that are individually material to the financial statements.
nature of the Group, although each veterinary practice and laboratory is considered to be an individual CGU, the monitoring of
goodwill is performed on an aggregated basis for groups of CGUs that are no larger than the operating segments, as determined in
The majority of other assets are tested at the CGU level, to the extent that an impairment review is triggered following identification
of an indicator of impairment by management. A small number of assets (typically patient data records acquired in a business
combination with multiple sites or locations) are shared between sub‑groups of CGUs and are tested for impairment when there are
indicators of impairment at that level.
2026 | 2025 | |
£m | £m | |
Veterinary Practices | 264.7 | 229.6 |
Laboratories | 2.1 | 2.1 |
Total | 266.8 | 231.7 |
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
12. Intangible assets
continued
156
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Annual Report and Financial Statements 2026
Impairment tests and charge
The pre-tax discount rate applied to the cash flow projections is derived from the Group’s pre-tax weighted average cost of capital.
The risks relating to each of the CGUs are considered to be the same as a result of the Group’s operations being entirely focused in
the veterinary market and, as such, the discount rate applied to each CGU is the same. The use of the Group’s weighted average
cost of capital is consistent with the valuation methodology used when determining the offer price for business combinations and,
therefore, is considered an appropriate discount rate.
During the year, the Group recognised an impairment charge of £2.0m in respect of internally developed software. The impairment
arose following the replacement of the system in the laboratory division. The recoverable amount of the asset was determined
based on its value in use and resulted in an impairment charge of £2.0m recognised within administrative expenses.
Value in use
In assessing value in use, being the net present value of future cash flows, the Group uses budgeted adjusted EBITDA for the next
financial year adjusted for an assumption of capital expenditure as an approximation of cash flows. No adjustment is made for working
capital as the impact of such adjustment is insignificant. A growth rate, which is considered to be broadly consistent between CGUs,
is applied based on past experience and expectations of future changes to the market. Growth rate forecasts are extrapolated based
on estimated long-term average growth rates for the markets in which the CGU operates (estimated at 4.0% for years one to five
and a 3.0% long-term rate). The pre-tax discount rate used to calculate value in use is 12.4% at 30 June 2026 (2025: 12.5%
).
A sensitivity analysis using reasonably possible changes in key assumptions has been performed. None of these changes result
in the value of goodwill allocated to the CGUs being in excess of its recoverable amount and therefore no sensitivity analysis
Fixtures, | ||||||
Freehold land | Leasehold | fittings and | Motor | |||
and buildings | improvements | equipment | vehicles | Total | ||
Group | Note | £m | £m | £m | £m | £m |
Cost | ||||||
At 1 July 2024 | 25.5 | 84.5 | 106.0 | 8.8 | 224.8 | |
Exchange differences | — | (0.1) | (0.1) | — | (0.2) | |
Additions arising through business combinations | — | — | 2.1 | — | 2.1 | |
Fair value adjustments in respect of prior periods | — | — | 0.3 | — | 0.3 | |
Additions | 0.3 | 13.8 | 10.1 | 2.2 | 26.4 | |
Disposals | (4.8) | (1.6) | (5.5) | (3.3) | (15.2) | |
At 30 June 2025 | 21.0 | 96.6 | 112.9 | 7.7 | 238.2 | |
Exchange differences | — | 0.3 | 0.3 | — | 0.6 | |
Additions arising through business combinations | 15 | — | 2.7 | 0.5 | — | 3.2 |
Additions | — | 15.9 | 11.2 | 1.4 | 28.5 | |
Disposals | — | — | (14.1) | (1.4) | (15.5) | |
At 30 June 2026 | 21.0 | 115.5 | 110.8 | 7.7 | 255.0 | |
Accumulated depreciation | ||||||
At 1 July 2024 | 3.4 | 29.6 | 63.3 | 5.5 | 101.8 | |
Depreciation for the year | 0.5 | 5.2 | 13.1 | 1.6 | 20.4 | |
Disposals | (1.0) | (0.3) | (4.8) | (1.9) | (8.0) | |
At 30 June 2025 | 2.9 | 34.5 | 71.6 | 5.2 | 114.2 | |
Exchange differences | — | — | 0.1 | — | 0.1 | |
Depreciation for the year | 0.5 | 4.8 | 14.6 | 1.1 | 21.0 | |
Disposals | — | — | (13.6) | (1.4) | (15.0) | |
At 30 June 2026 | 3.4 | 39.3 | 72.7 | 4.9 | 120.3 | |
Net book amount | ||||||
At 30 June 2026 | 17.6 | 76.2 | 38.1 | 2.8 | 134.7 | |
At 30 June 2025 | 18.1 | 62.1 | 41.3 | 2.5 | 124.0 | |
At 30 June 2024 | 22.1 | 54.9 | 42.7 | 3.3 | 123.0 |
Freehold land amounting to £1.7m (2025: £1.7m) has not been depreciated. Included within the above classes of assets is £4.2m
(2025: £8.2m) of assets which are under construction, of which £3.4m was incurred in the year and £0.8m is carried forward from
Strategic Report
Corporate Governance
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Financial Statements
CVS Group plc
Annual Report and Financial Statements 2026
157
Group as a lessee
The majority of the Group’s veterinary practices, specialist referral centres and support offices are leased, with remaining lease
terms of between 1 and 19 years. The Group also has a number of non‑property leases relating to vehicle, equipment and material
handling equipment, with remaining lease terms of between one and seven years. Lease terms are negotiated on an individual basis
and vary according to the nature of the underlying asset, with property leases generally containing fixed rental payments and
extension options. Additions to right‑of‑use assets include new leases; extensions and amendments to existing lease agreements
are disclosed as remeasurements.
Right‑of‑use assets
Motor | |||||
Property | Equipment | vehicles | Total | ||
Group | Note | £m | £m | £m | £m |
Cost | |||||
At 1 July 2024 | 156.7 | 6.0 | 4.4 | 167.1 | |
Exchange differences | (0.6) | — | — | (0.6) | |
Acquired through business combinations | 2.4 | — | — | 2.4 | |
Remeasurement of lease term | 9.7 | — | — | 9.7 | |
Additions | 2.2 | 1.1 | 1.2 | 4.5 | |
Disposals | (4.4) | (1.7) | (1.4) | (7.5) | |
At 30 June 2025 | 166.0 | 5.4 | 4.2 | 175.6 | |
Exchange differences | 0.9 | — | — | 0.9 | |
Acquired through business combinations | 15 | 3.4 | — | — | 3.4 |
Remeasurement of lease term | 13.3 | — | 0.4 | 13.7 | |
Additions | 4.5 | 0.3 | 1.1 | 5.9 | |
Disposals | (5.7) | (0.3) | (0.8) | (6.8) | |
At 30 June 2026 | 182.4 | 5.4 | 4.9 | 192.7 | |
Accumulated depreciation | |||||
At 1 July 2024 | 59.7 | 2.6 | 2.2 | 64.5 | |
Depreciation for the year | 15.9 | 1.0 | 1.2 | 18.1 | |
Disposals | (2.3) | (1.8) | (1.3) | (5.4) | |
At 30 June 2025 | 73.3 | 1.8 | 2.1 | 77.2 | |
Exchange differences | 0.1 | — | — | 0.1 | |
Depreciation for the year | 15.6 | 0.8 | 1.3 | 17.7 | |
Impairment | 2.5 | — | — | 2.5 | |
Disposals | (3.6) | (0.2) | (0.6) | (4.4) | |
At 30 June 2026 | 87.9 | 2.4 | 2.8 | 93.1 | |
Net book amount | |||||
At 30 June 2026 | 94.5 | 3.0 | 2.1 | 99.6 | |
At 30 June 2025 | 92.7 | 3.6 | 2.1 | 98.4 | |
At 30 June 2024 | 97.0 | 3.4 | 2.2 | 102.6 |
Following a review of the Group’s leased property portfolio, management identified indicators of impairment relating to certain
right‑of‑use assets. An impairment charge of £2.5m was recognised and presented within administrative expenses. The
recoverable amount was determined using a value in use model reflecting revised expectations of future economic benefits from
the underlying leased assets.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
14. Leases
continued
158
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Lease liabilities
2026 | 2025 | |
Group | £m | £m |
Current | 16.5 | 15.2 |
Non‑current | 89.7 | 88.4 |
Total discounted lease liabilities | 106.2 | 103.6 |
Maturity analysis – contractual undiscounted lease payments | ||
Less than one year | 21.4 | 19.9 |
Between one and five years | 64.9 | 65.2 |
More than five years | 42.4 | 41.6 |
Total undiscounted lease payments | 128.7 | 126.7 |
Details of business combinations in the year ended 30 June 2026 are set out below. The reason for each acquisition was to expand
the CVS Group business through acquisitions aligned to our strategic goals.
% share capital | |||
Name of business combination | acquired | Date of acquisition | Country of incorporation |
Toorak Rd Vet Clinic & Caulfield Veterinary Hospital | Trade and asset | 2 July 2025 | Australia |
Sydney Animal Hospital incorporating: | |||
SAH Avalon Vet Pty Ltd; | |||
SAH Inner West Pty Ltd; | |||
SAH Kellyville Pty Ltd; | |||
SAH Newtown Pty Ltd; | |||
SAH Northern Beaches Pty Ltd; and | |||
SAH Norwest Pty Ltd. | 75% | 1 September 2025 | Australia |
Sydney Animal Hospital incorporating: Sydney Animal | |||
Hospitals - Baulkham Hills Pty Ltd | 75% | 7 October 2025 | Australia |
Highview Vets Pty Ltd t/a Austinmer Veterinary Hospital & | |||
Helensburgh Veterinary Clinic | 100% | 19 January 2026 | Australia |
PPAH Vets Pty Ltd t/a Port Phillip Animal Hospital | Trade and asset | 24 February 2026 | Australia |
Pittwater Animal Hospital Pty Ltd | 100% | 28 April 2026 | Australia |
Animal Medical Centre Veterinary Hospital Pty Ltd | 65% | 25 June 2026 | Australia |
The table below summarises the total assets acquired through business combinations in the year ended 30 June 2026:
Book value of | ||||
acquired | Fair value | |||
assets | adjustments | Fair value | ||
Note | £m | £m | £m | |
Property, plant and equipment | 13 | 3.2 | — | 3.2 |
Patient data records | 12 | — | 26.6 | 26.6 |
Right‑of‑use assets | 14 | 3.4 | — | 3.4 |
Inventories | 0.6 | — | 0.6 | |
Deferred tax asset/(liability) | 25 | 0.2 | (8.0) | (7.8) |
Trade and other receivables | 0.1 | — | 0.1 | |
Cash | 0.3 | — | 0.3 | |
Trade and other payables | (2.8) | — | (2.8) | |
Lease liabilities | (3.4) | — | (3.4) | |
Total identifiable assets | 1.6 | 18.6 | 20.2 | |
Less: non‑controlling interests | (3.8) | |||
Add: goodwill | 12 | 28.2 | ||
Less: gain on bargain purchase | (0.5) | |||
Total purchase consideration | 44.1 |
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15. Business combinations
continued
CVS Group plc
Annual Report and Financial Statements 2026
159
Purchase consideration – cash outflow
2026
|
The Directors do not consider any individual in‑year acquisition to be material to the Group and therefore have not separately
disclosed these.
The total consideration of £44.1m is prior to the agreement of the completion accounts. The amounts recognised are subject to
adjustment in line with IFRS 3 for up to twelve months from acquisition, with goodwill being adjusted accordingly.
Goodwill and intangible assets recognised in the year relating to business combinations are not expected to be deductible for tax purposes.
Gain on bargain purchase
On 7 October 2025, the Group acquired 75% of Sydney Animal Hospitals - Baulkham Hills Pty Ltd. The fair value of the identifiable
net assets acquired by the Group amounted to £0.5m, compared with consideration transferred of £nil, resulting in a gain on bargain
purchase of £0.5m.
Prior to recognising the gain, management reassessed the identification and measurement of all acquired assets and assumed
liabilities in accordance with IFRS 3 and concluded that the values were appropriate.
The gain arose primarily because the practice was maturing and consideration was weighted towards contingent consideration
which will be accounted for under IAS 19.
The gain of £0.5m has been recognised within administrative expenses in the consolidated statement of profit or loss.
Acquired receivables
The fair value of acquired trade receivables is £0.1m. The gross contractual amount for trade receivables due is £0.1m with a loss
allowance of £nil recognised on acquisition.
Acquisitions with non‑controlling interests
During the year, the Group acquired the following:
Fair value of
|
Goodwill recognised represents the excess of purchase consideration over the fair value of the identifiable net assets. Goodwill
reflects the synergies arising from the combination of the businesses; this includes the assembled workforce and clinical knowledge,
cost synergies arising from shared support functions as well as buying power synergies. Goodwill includes the recognition of an
amount equal to the deferred tax that arises on non‑qualifying fixed assets acquired under a business combination.
The Group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets. The decision is made on an acquisition-by-acquisition basis. For the non-controlling
interests in Sydney Animal Hospital Practices and Animal Medical Centre Veterinary Hospital Pty Ltd, the Group elected to recognise
the non-controlling interests at its proportionate share of the acquired net identifiable assets. See note 2 for the Group’s accounting
policies for business combinations.
Revenue and profit contribution
If the acquisitions made in the period had been owned for the full year it is estimated that revenue would have been £30.8m and
adjusted EBITDA £8.6m for the acquired businesses.
Post-acquisition revenue and post-acquisition adjusted EBITDA were £17.2m and £5.0m respectively. The post-acquisition period is from
the date of acquisition to 30 June 2026. Post-acquisition adjusted EBITDA represents the direct operating result of practices from the
date of acquisition to 30 June 2026 prior to the allocation of central overheads on the basis that it is not practicable to allocate these.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
15. Business combinations
continued
160
CVS Group plc
Annual Report and Financial Statements 2026
Acquisition related costs (costs relating to business combinations)
Acquisition costs of £4.3m (2025: £4.3m) are included within other expenses in note 6 of the financial statements, of which £nil
relates to stamp duty paid (2025: £0.5m).
Contingent consideration, expensed to the income statement, of £10.5m (2025: £10.6m) is included within other expenses in note 6
of the financial statements.
Contingent consideration (IFRS 3)
Contingent consideration is calculated at fair value at the point of acquisition, and any adjustments to fair value are recorded as and
when they arise. At the acquisition date of each acquisition made during the year, contingent consideration of £nil is recognised.
Contingent consideration (IAS 19)
Contingent consideration that relates to employment conditions is expensed to the income statement over the relevant service
period. For acquisitions completed in the year, the expense to the income statement is expected to be for a period of up to six years
subject to meeting fixed profitability and employment targets. If these targets are met, contingent consideration totalling £17.1m
would be payable in instalments as follows: £4.6m on each of the first and second anniversaries, £5.3m on the third anniversary,
£2.2m on the fourth anniversary, and £0.2m on each of the fifth and sixth anniversaries of the acquisition.
Business combinations in previous years
Details of business combinations in the comparative year are presented in the consolidated financial statements for the year ended
30 June 2025. Adjustments to the provisional amounts during the measurement resulted in an increase in patient data records of
£0.3m, offset by a reduction of £0.1m in goodwill, £0.1m in trade and other receivables and a reduction in deferred consideration
payable of £0.1m.
During the year, £nil (2025: £1.4m) was paid to settle deferred consideration payable from prior periods.
Contingent consideration (IFRS 3) of £0.4m paid (2025: £0.3m) relates to a business combination made in the year ended
30 June 2023 where consideration is payable over a three‑year period based on the veterinary practice reaching certain
adjusted EBITDA targets, but with no employment clause. As at 30 June 2026, £nil remains payable (2025: £0.4m).
Business combinations subsequent to the year end
Details of business combinations made subsequent to the year end are set out below. The reason for each acquisition was to
expand the CVS Group business through acquisitions aligned to our strategic goals.
Name of business combination
|
The table below summarises the provisional total assets acquired through business combinations subsequent to the year end:
Book value of
|
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15. Business combinations
continued
CVS Group plc
Annual Report and Financial Statements 2026
161
Purchase consideration – cash outflow
The net outflow of cash is equal to the total purchase consideration and therefore no reconciliation is necessary.
The total consideration of £4.9m is prior to the agreement of the completion accounts. The amounts recognised are provisional and
are subject to adjustment in line with IFRS 3 for up to twelve months from acquisition, with goodwill being adjusted accordingly.
Goodwill and intangible assets recognised in the year relating to business combinations are not expected to be deductible for
tax purposes.
Acquisitions subsequent to the year end with non‑controlling interests
Fair value of
|
Goodwill recognised represents the excess of purchase consideration over the fair value of the identifiable net assets. Goodwill
reflects the synergies arising from the combination of the businesses; this includes the assembled workforce and clinical knowledge,
cost synergies arising from shared support functions as well as buying power synergies. Goodwill includes the recognition of an
amount equal to the deferred tax that arises on non‑qualifying fixed assets acquired under a business combination.
For the non-controlling interests in Newman Vet Pty Ltd, the Group elected to recognise the non-controlling interests at its
proportionate share of the acquired net identifiable assets. See note 2 for the Group’s accounting policies for business
Shares in subsidiary undertakings
Company
|
The principal trading subsidiary undertakings of CVS Group plc are set out below:
Name of subsidiary
|
Notes to the consolidated financial statements
continued
162
CVS Group plc
Annual Report and Financial Statements 2026
for the year ended 30 June 2026
Name of subsidiary
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The dormant subsidiary undertakings included within the consolidation are as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of subsidiary
|
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16. Investments
continued
Shares in subsidiary undertakings continued
CVS Group plc
Annual Report and Financial Statements 2026
163
The registered office for all United Kingdom registered subsidiary undertakings is CVS House, Owen Road, Diss, Norfolk, IP22 4ER,
with the exception of the following companies:
Name of subsidiary
|
The registered office for all Australian subsidiary undertakings is BDO Offices – BDO Services Pty Ltd, Level 18, 360 Queen Street,
Derivatives are used for hedging in the management of exposure to market risks. This enables the optimisation of the overall cost of
accessing debt capital markets, and the mitigation of the market risk which would otherwise arise from movements in interest rates.
The ineffective element of cash flow hedges in 2026 was immaterial (2025: immaterial).
Cash flow hedges
On 31 January 2024, the Group entered into two interest rate swap arrangements limiting the Group’s exposure to interest rate
increases. The arrangement exposed the Group to Sterling SONIA within a cash flow hedge accounting relationship.
At 30 June 2026, £100.0m of debt was hedged (2025: £100.0m); the remainder of the debt was unhedged at the year end.
Below are details of the hedging instruments and hedged items in scope of the IFRS 9 amendments due to interest rate benchmark
reform. The terms of the hedged items listed match those of the corresponding hedging instruments.
Hedge type
|
The Group classifies its interest rate swap arrangement as a cash flow hedge and utilises hedge accounting to minimise income
statement volatility in relation to movements in the value of the swap arrangement.
The fair values of the Group’s interest rate derivatives are established using valuation techniques, primarily discounted cash flows,
based on assumptions that are supported by observable market prices or rates (level 1).
The fair values of derivative financial instruments have been disclosed in the Group consolidated statement of financial position
as follows:
2026
|
Movements in fair values
Interest
|
The cash flow hedge reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective in
cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is recognised in the income statement only when
the hedged transaction impacts the profit or loss or is included directly in the initial cost or other carrying amount of the hedged
non‑financial items.
The cost of the hedging reserve includes the effects of the changes in fair value of the time value of the option when only the
intrinsic value of the option is designated as the hedging instrument.
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
17. Derivative financial instruments
continued
Movements in fair values
continued
164
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The changes in fair value of the time value of an option in relation to a transaction related hedged item accumulated in the cost of
hedging reserve are reclassified to the income statement only when the hedged transaction affects profit or loss, or included as a
basis adjustment to the non-financial hedged item. The changes in fair value of the time value of an option in relation to a time
period‑related hedged item accumulated in the cash flow hedging reserve are amortised to the income statement on a rational basis
2026
|
2026
|
2026
|
Amounts owed by Group undertakings are unsecured and interest free and have no fixed date of repayment. Amounts owed
All inventories are finished goods held for resale. The Directors do not consider the difference between the purchase price
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CVS Group plc
Annual Report and Financial Statements 2026
165
Group
|
Group
The carrying amount of trade and other receivables is deemed to be a reasonable approximation to fair value. The maximum
exposure to credit risk at the reporting date is the fair value of each class of receivable above with the exception of prepayments
which hold no credit risk. The Group does not hold any collateral as security. The Group’s trade and other receivables are
denominated primarily in Sterling, with small amounts in Australian Dollars for Australian operations.
A provision for expected credit losses has been recognised at the reporting date through consideration of the ageing profile of the
Group’s trade receivables and the perceived credit quality of its customers reflecting net debt due. The carrying amount of trade
receivables, net of expected credit losses, is considered to be an approximation to their fair value. The amount of the expected
losses was £2.9m (2025: £3.5m). The Group has not disclosed the expected loss rate as this varies by type of customer. The Group
assesses its expected credit loss by reviewing historical cash flows of the ageing profile of the trade receivables.
The Group does not consider that any financial asset, other than those provided for above, is credit impaired.
Aggregate movements on the Group’s expected losses of trade receivables are as follows:
2026
|
Other receivables do not contain impaired assets.
At 30 June 2026, there is a contract asset recorded as accrued income of £15.1m (2025: £14.7m, 2024: £12.5m), relating to
customer membership schemes including the Healthy Pet Club (HPC) contract. The contract asset arises from customers having
received consultations and treatments which are weighted towards the beginning of the twelve‑month scheme, in advance of cash
payments, which are received in twelve equal instalments, as detailed more fully in note 2. Due to the nature of the scheme, the
accrued income amount brought forward has been fully utilised in the year.
Group | Company | |||
2026 | 2025 | 2026 | 2025 | |
£m | £m | £m | £m | |
Total cash and cash equivalents | 18.4 | 16.1 | — | — |
Notes to the consolidated financial statements
continued
166
CVS Group plc
Annual Report and Financial Statements 2026
for the year ended 30 June 2026
Group
|
1.
Employee benefit obligations relate to leave obligations, expected bonus payments and contingent consideration, accounted for under IAS 19.
2.
Deferred income primarily relates to the contract liability for Healthy Pet Club (HPC) contracts.
At 30 June 2026, the fair value of contingent consideration recognised within employee benefit obligations was £7.8m (2025: £8.5m).
The final payments are dependent on the future profitability of the acquired veterinary practices and the continued employment
of the vendors. As these arrangements are linked to post‑acquisition employment, they are accounted for as long‑term employee
benefits under IAS 19, ‘Employee Benefits’. The maximum undiscounted amount payable under these arrangements over the
remaining term of the agreements is £29.5m (2025: £27.8m), and the minimum amount payable is £nil. The liability recognised at
30 June 2026 reflects the portion attributable to service provided up to the reporting date and management’s assessment of the
expected achievement of the associated profitability targets.
2026
|
Provisions relate to costs set aside for properties including site closures and other property maintenance obligations. It is
Borrowings comprise bank loans and are denominated in Sterling. The repayment profile is as follows:
2026
|
The balances above are shown net of issue costs of £3.9m (2025: £2.3m), which are being amortised over the term of the bank
loan. The carrying amount of borrowings is deemed to be a reasonable approximation to fair value.
On 21 May 2026, the Group amended its £350.0m total facility, extending the maturity from February 2028 to May 2030 and
revising certain financial covenants. The modification did not meet the criteria for derecognition under IFRS 9. A modification loss of
£nil was recognised in finance costs during the year.
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24. Borrowings
continued
CVS Group plc
Annual Report and Financial Statements 2026
167
Following the refinance undertaken in May 2026, the Group has total facilities of £350.0m to 20 May 2030 (previously February 2028),
provided by a syndicate of eight banks: AIB, Danske, HSBC, JP Morgan, Lloyds, NatWest, Virgin Money and Westpac. The facility
comprises the following elements:
• a fixed‑term loan of £125.0m (previously £87.5m), repayable on 20 May 2030, with the option to extend by a year to 2031;
• a revolving credit facility of £225.0m (previously £262.5m), with the same duration as the fixed‑term loan; and
• a £5.0m overdraft facility, renewable annually.
The two financial covenants associated with these facilities are based on the ratios of bank test net debt to bank test EBITDA and
bank test EBITDA to interest. The bank test net debt to bank test EBITDA ratio must not exceed 3.25x or 3.75x in respect of an
Acquisition Spike Period. The bank test EBITDA to interest ratio must not be less than 3.5x. The facilities require cross-guarantees
from the most significant of CVS Group’s trading subsidiaries but are not secured on the assets of the Group. The Acquisition Spike
Period covers a period of twelve months following the completion of a Permitted Acquisition under the terms of the loan facility.
Bank test EBITDA is based on the last twelve months’ adjusted EBITDA performance annualised for the effect of acquisitions and
adding back share option expense, prior to the impact of IFRS 16 and excluding the share attributable to non-controlling interests.
Bank covenants are tested on the last day of each half‑yearly period ending on 31 December and 30 June in each year. The Group
has considerable headroom in both financial covenants and in its undrawn but committed facilities as at 30 June 2026. More
information can be found in note 3.
Bank borrowings bear interest at 1.25% to 2.50% above SONIA. The applicable interest rate is dependent upon the bank test net
debt to bank test EBITDA ratio. During the year the bank borrowings carried a rate averaging 1.6% above SONIA.
Interest rate risk is also managed centrally and derivative instruments are used to mitigate this risk. On 31 January 2024, the Group
entered into a four‑year interest rate fixed swap arrangement to hedge fluctuations in interest rates on £100.0m of its term loan.
At the year end, £100.0m (2025: £100.0m) of the combined term loan and revolving credit facility was hedged using an interest rate
swap. The remainder of the debt is not hedged. Further information on the cash flow hedge can be found in note 17.
Undrawn committed borrowing facilities
At 30 June 2026, the Group has a committed overdraft facility of £5.0m (2025: £5.0m) and an RCF of £225.0m (2025: £262.5m).
The overdraft was undrawn at 30 June 2026 (2025: undrawn) and the RCF was £132.0m undrawn (2025
: £202.5m undrawn).
Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. Deferred tax balances are
calculated using tax rates expected to apply in the period when the liability or asset is expected to be realised based on rates
enacted or substantively enacted by the reporting date.
Deferred tax assets comprised:
2026
|
The Group’s deferred tax assets have been recognised based on historical performance and future budgets. The recoverability of
deferred tax assets is supported by the expected level of future profits. The Group believes that it is probable that there will be
sufficient taxable profits against which the deferred tax assets will reverse.
Deferred tax liabilities comprise the excess of carrying value over the tax base.
2026
|
Notes to the consolidated financial statements
continued
for the year ended 30 June 2026
25. Deferred tax
continued
168
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Annual Report and Financial Statements 2026
The movement in the net deferred tax assets and liabilities is explained as follows:
Acquisition of
|
Acquisition of
|
The deferred tax balance is non‑current.
Deferred tax balances are calculated using tax rates expected to apply in the period when the liability or the asset is expected to be
realised based on rates enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities have been offset where they relate to the same taxation authority, the Group had a legally
enforceable right to offset and the Group intends to settle the liability and realise the asset simultaneously.
The Group’s deferred tax assets have been recognised based on historical performance and future budgets. The recoverability of
deferred tax assets is supported by the expected level of future profits. The Group believes that it is probable that there will be
sufficient taxable profits against which the deferred tax assets will reverse.
The Group has carried forward unutilised tax losses of £14.6m (2025: £14.6m) that are available indefinitely for offsetting against
future taxable profits of Group companies within the tax jurisdiction in which the losses arose. No deferred tax asset has been
recognised (2025: £nil) in respect of these losses as it is not probable that sufficient future taxable profits will arise against which
the asset will reverse. These losses have no expiry date.
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries as the Group is able to control the timing of the
reversal of the temporary difference, and it is probable that such differences will not reverse in the foreseeable future. The Group
expects the majority of earnings to be continuously reinvested by the Group. It is not practicable to estimate the amount of
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CVS Group plc
Annual Report and Financial Statements 2026
169
2026
|
During the year, CVS repurchased and cancelled 2,542,125 Ordinary shares at an average price of £12.48 for a total consideration
of £31.7m (2025: no shares were repurchased).
During the year, shares were issued for a total consideration of £nil (2025: £0.1m) as follows
:
2026
|
Details of shares under option are provided in note 11 to the financial statements.
The authorised share capital of the Company is 352,000,000 Ordinary shares of 0.2p each.
The Directors have proposed a final dividend of 9.0p (2025: 8.5p) per share, giving a total of £6.2m (2025: £6.1m). During the year,
the 2025 final dividend totalling £6.1m was paid (2025: final 2024 dividend paid £5.7m).
The Group operates an EBT which holds 164 shares (2025: 164 shares).
In the year ended 30 June 2017, the Group established an EBT for the purposes of satisfying the exercise of certain share options
vesting under the Group’s ESP and SAYE schemes. The Group has accounted for the purchase of the shares held by the EBT as
Treasury shares and has deducted these from reserves.
During the year, the EBT bought no shares at open market value for £nil (2025: no shares at open market value for £nil).
Liabilities on
|
Liabilities on
|
Non‑cash movements on lease liabilities mainly comprise interest on lease liabilities and foreign exchange gain/(losses) from
retranslation. Non‑cash movements on borrowings and bank loans mainly include amortisation of issue costs on bank loans and
Notes to the consolidated financial statements
continued
170
CVS Group plc
Annual Report and Financial Statements 2026
for the year ended 30 June 2026
Group
|
1.
The movement in trade and other receivables includes movement in Research and Development Expenditure Tax Credit receivable of £6.7m
The Group had no capital commitments as at 30 June 2026 (2025: £nil).
Bank guarantees
The Company is a member of the Group’s banking arrangement, under which it is party to unlimited cross-guarantees in respect of
the banking facilities of other Group undertakings, amounting to £355.0m at 30 June 2026 (2025: £355.0m). The Directors do not
expect any material loss to the Company to arise in respect of the guarantees.
A letter of support has been provided to certain subsidiaries indicating the intention of the Company to support them, if required,
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30. Guarantees and other financial commitments
continued
CVS Group plc
Annual Report and Financial Statements 2026
171
Exemption from audit by parent company guarantee
The following wholly owned subsidiaries of the Company are covered by a guarantee provided by CVS Group plc and are
consequently entitled to an exemption under Section 479A from the requirement of the Act relating to the audit of individual
accounts. Under this guarantee, the Group will guarantee all outstanding liabilities of these entities. The Group has deemed it not
practical to quantify the possible outflow and no liability is expected to arise under the guarantee. The entities covered by this
guarantee are disclosed overleaf.
Name of subsidiary
|
Notes to the consolidated financial statements
continued
172
CVS Group plc
Annual Report and Financial Statements 2026
for the year ended 30 June 2026
The Group contributes to certain employees’ personal pension schemes in accordance with their service contracts. The amounts
are charged to the income statement as they fall due. The amounts charged during the year amounted to £13.3m (2025: £11.7m).
There were no discontinued operations during the year ended 30 June 2026. The comparative period relates to the Group’s
Crematoria operations, which were disposed of on 15 May 2025 and were presented as a discontinued operation in accordance
with IFRS 5.
Financial performance and cash flow information
The financial performance and cash flow information presented are for the period ended 30 June 2026 and 15 May 2025
(2025 column).
2026
|
Details of the sale of the discontinued operation
2026
|
During the current year, the Group received £0.4m of deferred consideration relating to the disposal completed in the prior year.
Since 30 June 2026, the Group has completed two acquisitions comprising four practice sites for a total consideration of £4.9m
(Australian $9.3m), detailed below. This is aligned with the Group’s strategic goals.
% share capital
|
Further information on these business combinations can be found in note 15.
The Group has exchanged contracts in respect of an acquisition of a three site small animal first opinion veterinary practice in
South Australia, and a one site small animal first opinion veterinary practice in Western Australia, for combined initial consideration
of £4.0m, with completion expected in due course.
In addition the Group has exchanged contracts in respect of an acquisition of a two site small animal first opinion veterinary practice
in the UK, for initial consideration of £15.0m, with completion expected in due course.
Strategic Report
Corporate Governance
The Directors’ Report
Financial Statements
33. Events after the reporting period
continued
CVS Group plc
Annual Report and Financial Statements 2026
173
Since the year end, the Company repurchased and have either cancelled, or are in the process of cancelling 1,590,167 Ordinary shares
Directors’ and key management’s compensation is disclosed in note 8.
Company
During the year, the Company had the following transactions with CVS (UK) Limited, the Group’s immediate subsidiary:
2026
|
The following balances were owed by related companies:
2026
|
Amounts owed by CVS (UK) Limited are in the normal course of trading, are unsecured and interest free and have no fixed date
of repayment.
The carrying amount is considered to approximate to fair value. This balance represents the maximum amount of credit risk
the company is exposed to. The recoverability of this balance has been assessed and no provision for expected credit loss has
been recognised.
Transactions with Directors and key management
On 24 November 2022, the Group completed the purchase of 100.0% of the share capital of The Harrogate Vet Limited, a company
registered in England and Wales, comprising one companion animal veterinary practice site in the UK. Prior to acquisition, the
company was partially owned by the spouse of one of the Executive Directors of the Group at that date, and as such the acquisition
was considered a related party transaction. The terms of the acquisition, including consideration paid, were on an arm’s length
basis and consistent with acquisitions of other unrelated entities.
The related party remained in part‑time employment within the Group during the prior period and received a salary in 2025 of
£32,885 which is on an arm’s length basis. The related party was not employed by the Group during this financial year.
The following dividends were paid to the Directors of the Group:
2025
|
1.
R Gray and P Higgs’ dividends received have been restated to reflect their actual holding on the dividend date.
Ultimate controlling party
Notes to the consolidated financial statements
continued
174
CVS Group plc
Annual Report and Financial Statements 2026
for the year ended 30 June 2026
Set out below is summarised financial information for an aggregated view of subsidiaries that have non‑controlling interests.
These are not deemed material to the Group. The amounts disclosed are before intercompany eliminations.
|
1.
On 16 June 2026, the Group acquired the remaining 30% interest in VPP Group Pty Ltd, increasing its ownership interest from 70% to 100%.
VPP Group Pty Ltd balances are included within the tables below for the period up to 16 June 2026.
Summarised statement of financial position
2026 | 2025 1 | |
£m | £m | |
Current assets | 6.5 | 3.0 |
Current liabilities | (6.4) | (2.9) |
Current net assets | 0.1 | 0.1 |
Non‑current assets | 27.0 | 8.5 |
Non‑current liabilities | (8.2) | (2.7) |
Non-current net assets | 18.8 | 5.8 |
Net assets | 18.9 | 5.9 |
Accumulated NCI | 5.5 | 1.9 |
1. Restated to include patient data records and associated deferred tax liabilities.
Summarised statement of comprehensive income
2026 | 2025 | |
£m | £m | |
Revenue | 23.0 | 5.2 |
Profit for the period | 2.0 | 0.8 |
Total comprehensive income | 2.0 | 0.8 |
Profit allocated to NCI | 0.5 | 0.2 |
Dividends paid to NCI | 0.2 | 0.2 |
Summarised cash flows
|
On 16 June 2026, the Group acquired the remaining 30% interest in VPP Group Pty Ltd for consideration of £2.1m, increasing its
ownership interest from 70% to 100%. As control had previously been obtained, the transaction was accounted for as an equity
Five-year history – unaudited
for the year ended 30 June 2026
2026
£m
2025
£m
2024
1
£m
2023
2
£m
2022
£m
Revenue
712.8
673.2
638.7
588.9
554.2
Gross profit
315.6
285.7
268.7
258.1
239.1
Operating profit
47.6
49.8
47.8
68.4
42.8
Finance expense
(15.6)
(17.2)
(12.6)
(7.7)
(6.8)
Profit before tax
32.0
32.6
35.2
60.7
36.0
Tax expense
(14.2)
(13.5)
(10.5)
(12.6)
(10.3)
Profit from continuing operations
17.8
19.1
24.7
48.1
25.7
Profit/(loss) from discontinued operations
—
33.9
(18.3)
(6.2)
—
Profit for the year
17.8
53.0
6.4
41.9
25.7
Adjusted EBITDA
141.5
134.6
123.0
121.6
107.4
Adjusted profit before tax
84.9
78.9
79.0
87.9
75.5
Cash generated from operations
102.0
114.1
95.9
107.9
93.1
Taxation paid
(16.1)
(15.5)
(15.7)
(14.9)
(11.2)
Interest paid
(14.6)
(16.5)
(12.4)
(7.2)
(6.4)
Business combinations (net of cash acquired)
(43.7)
(30.9)
(97.0)
(54.6)
(8.4)
Purchase of additional interest in subsidiary from non-
controlling interest
(2.1)
—
—
—
—
Loans and borrowings acquired through business combinations
—
—
(0.3)
(0.8)
(0.1)
Purchase of property, plant and equipment and intangible assets
(36.4)
(34.2)
(43.1)
(45.7)
(24.5)
Proceeds from sale of property, plant and equipment and
intangible assets
0.3
—
0.2
0.3
0.2
Purchase of finance assets held at cost/other investments
—
0.1
(0.6)
—
(21.4)
Proceeds from sale of other investments
0.4
42.3
—
0.1
9.0
Dividends paid
(6.3)
(5.9)
(5.5)
(5.0)
(4.6)
Proceeds from issue of Ordinary shares
—
0.1
2.0
1.6
2.3
Proceeds from the sale of Treasury shares
—
—
0.4
0.5
—
Purchase of Treasury shares
—
—
(0.9)
(1.2)
—
Own shares purchased for cancellation
(31.7)
—
—
—
—
Repayment of obligations under right-of-use assets
(17.3)
(16.4)
(15.6)
(14.1)
(12.7)
Amortisation of debt issuance costs
(0.9)
(0.9)
(0.9)
(1.0)
(0.4)
Exceptional items
—
—
—
(1.3)
—
Foreign exchange gain
(0.2)
(0.6)
(0.6)
—
—
(Increase)/decrease in net debt
(66.6)
35.7
(94.1)
(35.4)
14.9
Year-end net debt
195.7
129.1
164.8
70.7
35.3
Pence
Pence
Pence
Pence
Pence
Basic earnings per share
24.4
73.7
8.6
58.8
36.2
Adjusted earnings per share
85.6
80.1
83.3
98.9
85.8
1.
2024 has been re-presented following the classification of the Crematoria operations as a discontinued operation in 2025. 2023 and prior years
have not been re-presented for this classification.
2. 2023 was re-presented last year following the classification of the Netherlands and Republic of Ireland operations as a discontinued operation in 2024.
2022 and prior years have not been re-presented for this classification.
CVS Group plc
Annual Report and Financial Statements 2026
175
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Alternative performance measures glossary
Alternative performance measures
Guidelines on alternative performance measures (APMs) issued by the European Securities and Markets Authority came into effect
for all communications released on or after 3 July 2016 for issuers of securities on a regulated market.
The Directors believe that alternative performance measures provide additional useful information for shareholders. These measures
are used by the Board and management for planning, internal reporting and setting Director and management remuneration. In addition,
they are used by the investor analyst community and are aligned to our strategy and KPls. These measures are not defined by
International Financial Reporting Standards (IFRS) and therefore may not be directly comparable with other companies’ adjusted
measures. They are not intended to be a substitute for, or superior to, IFRS measurements of profit or earnings per share.
The key APMs used by the Group are:
APM
Definition
Reconciliation
Like-for-like sales
Closest equivalent
statutory measure:
Revenue growth
Like-for-like sales show revenue
generated from like-for-like
continuing operations compared
to the prior year, adjusted for the
number of working days and on
a constant currency basis. For
example, for a practice acquired
in September 2024, revenue is
included from September 2025
in the like-for-like calculations.
It is defined as a percentage; no reconciliation is applicable.
Gross margin before
clinical staff costs
Closest equivalent
statutory measure:
Gross profit margin
Gross margin before clinical staff
costs is calculated as gross
profit add employee benefit
expense included within cost of
sales, divided by revenue.
Note
2026
£m
2025
£m
Gross profit
315.6
285.7
Employee benefit expense included within
cost of sales
7
244.5
241.9
Gross profit before clinical staff costs
560.1
527.6
Revenue
4
712.8
673.2
Gross margin before clinical staff costs
78.6%
78.4%
Adjusted EBITDA
Closest equivalent
statutory measure:
Operating profit
Adjusted EBITDA is calculated by
reference to profit before tax for
continuing operations, adjusted
for net finance expense,
depreciation, profit or loss on
disposal of property, plant and
equipment, amortisation, costs
relating to business combinations
and exceptional items.
Business combination costs
include costs in relation to
acquisitions made and contingent
consideration (IAS 19) expensed
to the income statement.
An exceptional item contains
certain costs or incomes that
derive from events or
transactions that fall outside the
normal activities of the Group
and/or are excluded by virtue of
their size or nature in order to
reflect management’s view of the
performance of the Group.
Judgement is applied in
determining whether items are
classified as exceptional, and the
policy is applied consistently
between reporting periods.
Note
2026
£m
2025
£m
Profit before tax from continuing operations
32.0
32.6
Adjustments for:
Finance expense
5
15.6
17.2
Gain on bargain purchase
(0.5)
—
Amortisation of intangible assets
12
26.0
26.0
Impairment of intangible assets
12
2.0
—
Depreciation of property, plant and
equipment
13
21.0
20.4
Depreciation of right-of-use assets
14
17.7
18.1
Loss on disposal of property, plant and
equipment and disposal and impairment
of right-of-use assets
4
2.3
1.1
Depreciation and amortisation attributable
to discontinued operations
4
—
(1.7)
Costs relating to business combinations
15
14.8
14.9
Exceptional items
6
10.6
6.0
Adjusted EBITDA
4
141.5
134.6
CVS Group plc
Annual Report and Financial Statements 2026
176
APM
Definition
Reconciliation
Adjusted EBITDA
continued
In determining whether an item
should be presented as an
allowable adjustment to IFRS
measures, the Group considers
items which are significant
because of either their size
or their nature, and which are
non-recurring. For an item to
be considered as an allowable
adjustment to IFRS measures,
it must initially meet at least one
of the following criteria:
• It is a significant item, which
may cross more than one
accounting period.
• It has been directly incurred as
a result of either an acquisition
or a divestment or arises from
termination benefits without
condition of continuing
employment related to a
business change or
restructuring programme.
• It is unusual in nature, e.g.
outside the normal course
of business.
If an item meets at least one
of the criteria, management and
the Audit and Risk Committee
then exercises judgement as to
whether the item should be
classified as an allowable
adjustment to IFRS performance
measures and as such included
within business combination
costs or exceptional item
definition.
Alternative performance measures
continued
CVS Group plc
Annual Report and Financial Statements 2026
177
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
Alternative performance measures glossary
continued
APM
Definition
Reconciliation
Adjusted EBITDA
margin
Closest equivalent
statutory measure:
None
Adjusted EBITDA margin is
calculated as adjusted EBITDA
divided by revenue.
2026
£m
2025
£m
Revenue
712.8
673.2
Adjusted EBITDA
141.5
134.6
Adjusted EBITDA margin (%)
19.9%
20.0%
Adjusted profit
before tax
Closest equivalent
statutory measure:
Profit before tax
Adjusted PBT is profit before
tax for continuing operations,
amortisation, costs relating to
business combinations and
exceptional items.
Note
2026
£m
2025
£m
Profit before tax for continuing operations
32.0
32.6
Adjustments for:
Gain on bargain purchase
(0.5)
—
Amortisation of intangible assets
12
26.0
26.0
Amortisation of intangible assets
attributable to discontinued operations
4
—
(0.6)
Impairment of intangible assets
12
2.0
—
Costs relating to business combinations
15
14.8
14.9
Exceptional items
6
10.6
6.0
Adjusted profit before tax
84.9
78.9
Adjusted EPS
Closest equivalent
statutory measure:
Basic EPS
Adjusted EPS is calculated as
adjusted PBT attributable to the
owners of CVS Group plc, less
applicable tax, divided by the
weighted average number of
Ordinary shares in issue in
the period.
2026
£m
2025
£m
Adjusted profit before tax
84.9
78.9
Tax expense amended for the
above adjustments
(23.3)
(21.2)
Adjusted profit after tax
61.6
57.7
Less: adjusted profit after tax attributable
to non-controlling interest
(1.0)
(0.2)
Adjusted profit after tax attributable
to the parent
60.6
57.5
Weighted average number of Ordinary
shares in issue
70,821,844
71,739,444
Weighted average number of Ordinary
shares for diluted earnings per share
70,958,699
71,748,631
Adjusted earnings per share (pence)
85.6
80.1
Diluted earnings per share (pence)
85.4
80.1
Alternative performance measures
continued
CVS Group plc
Annual Report and Financial Statements 2026
178
APM
Definition
Reconciliation
Adjusted Net debt
Closest equivalent
statutory measure:
None
Adjusted Net debt is calculated
as bank borrowings less cash
and cash equivalents and
unamortised borrowing costs.
Note
2026
£m
2025
£m
Borrowings repayable after more
than one year:
Term loan and revolving credit facility
218.0
147.5
Unamortised borrowing costs
(3.9)
(2.3)
Total borrowings
24
214.1
145.2
Cash and cash equivalents
21
(18.4)
(16.1)
Adjusted Net debt
195.7
129.1
Bank test net debt/
net bank borrowings
Closest equivalent
statutory measure:
Net debt
Bank test net debt/net bank
borrowings less cash and
cash equivalents.
2026
£m
2025
£m
Bank borrowings
218.0
147.5
Cash and cash equivalents
(18.4)
(16.1)
Bank test net debt/net bank borrowings
199.6
131.4
Leverage
Closest equivalent
statutory measure:
None
Leverage on a bank test basis
is bank test net debt divided
by bank test EBITDA. It is
a covenant under our loan
facility agreement.
2026
2025
Bank test net debt (£m)
199.6
131.4
Bank test EBITDA (£m)
122.1
111.4
Bank test leverage
1.63
1.18
Adjusted operating
cash conversion
Closest equivalent
statutory measure:
Cash generated from
operations
Adjusted operating cash
conversion is defined as cash
generated from operating
activities adjusted for
discontinued operations,
acquisition fees and contingent
consideration paid, lease liability
repayment and maintenance
capital expenditure; divided by
adjusted EBITDA. Adjusted
operating cash conversion is
used to understand underlying
cash flows that arise compared
to adjusted EBITDA.
Maintenance capital expenditure
is capital expenditure used to
maintain the business in its
current state. Whereas
investment capital expenditure
supports operational resiliency
and/or long-term growth.
2026
£m
2025
£m
Cash generated from operations
102.0
114.1
Add: acquisition fees paid
4.3
4.3
Add: contingent consideration paid
11.8
8.3
Add: exceptional items
10.6
6.0
Less: lease liability repayment
(17.3)
(16.4)
Less: capital expenditure – maintenance
(11.5)
(10.8)
Less: operating cash flow from
discontinued operations
—
(2.0)
Adjusted operating cash flow
99.9
103.5
Adjusted EBITDA
141.5
134.6
Adjusted operating cash conversion (%)
70.6%
76.9%
Alternative performance measures
continued
CVS Group plc
Annual Report and Financial Statements 2026
179
Corporate Governance
Financial Statements
Strategic Report
The Directors’ Report
APM
Definition
Reconciliation
Free cash flow
Closest equivalent
statutory measure:
Net cash from
operating activities
Free cash flow is defined as
adjusted operating cash flow
less interest and taxation paid in
respect of continuing operations.
2026
£m
2025
£m
Adjusted operating cash flow
99.9
103.5
Less: taxation paid
(16.1)
(14.7)
Less: interest paid net of interest received
(14.6)
(16.6)
Free cash flow
69.2
72.2
Free cash flow per
share
Closest equivalent
statutory measure:
None
Free cash flow per share is free
cash flow divided by the
weighted average number of
Ordinary shares in issue.
Note
2026
2025
Free cash flow (£m)
69.2
72.2
Weighted average number of Ordinary
shares in issue
10
70,821,844
71,739,444
Free cash flow per share (p)
97.7
100.6
Total shareholder
return
Closest equivalent
statutory measure:
None
Total shareholder return
is a performance measure
which indicates the total amount
that an investor gains from an
investment. It is expressed as
a percentage and reflects both
dividends that have been paid
and share price growth (or
decrease) compared to the
total shareholder return of
the FTSE 250, excluding
investment trusts.
It is defined as a percentage; no reconciliation is applicable.
Return on capital
employed (ROCE)
Closest equivalent
statutory measure:
None
Return on capital employed is a
profitability ratio and measures
how efficiently a company is
using its capital to generate
profits. It is calculated as
adjusted EBITA divided by
capital employed.
Adjusted EBITA is profit before
tax for continuing operations,
adjusted for net finance expense,
amortisation, costs relating to
business combinations and
exceptional items.
Capital employed is equity, plus
lease liability, plus borrowings
net of cash, plus deferred tax.
2026
£m
Restated
2025
£m
Adjusted EBITA (£m)
100.5
96.1
Capital employed (£m)
622.5
556.4
Ratio (%)
16.1%
17.3%
Note
2026
£m
Restated
2025
£m
Profit before tax from continuing operations
32.0
32.6
Adjusted for:
Finance expense
15.6
17.2
Gain on bargain purchase
(0.5)
—
Amortisation of intangible assets
12
26.0
26.0
Amortisation of intangible assets
attributable to discontinued operations
4
—
(0.6)
Impairment of intangible assets
12
2.0
—
Costs relating to business combinations
15
14.8
14.9
Exceptional items
6
10.6
6.0
Adjusted EBITA
100.5
96.1
Note
2026
£m
Restated
2025
£m
Equity
295.6
301.7
Non-current lease liability
14
89.7
88.4
Borrowings net of cash
195.7
129.1
Deferred tax liability
25
41.5
37.2
Capital employed
622.5
556.4
Alternative performance measures
continued
Alternative performance measures glossary
continued
CVS Group plc
Annual Report and Financial Statements 2026
180
CVS Group plc’s commitment to environmental issues is reflected
in this Annual Report, which has been printed on Magno Satin,
an FSC
®
certified material. This document was printed by Pureprint
Group using its environmental print technology, with 99% of dry
waste diverted from landfill, minimising the impact of printing
on the environment. The printer is a CarbonNeutral
®
company.
Both the printer and the paper mill are registered to ISO 14001.
CBP037515
Contact details and advisors
Registered office
CVS House
Owen Road
Diss
Norfolk
IP22 4ER
Joint broker
Berenberg
60 Threadneedle Street
London
EC2R 8HP
Peel Hunt LLP
7th Floor
100 Liverpool Street
London
EC2M 2AT
Financial public relations
FGS Global
The Adelphi
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London
WC2N 6HT
Company Secretary
S Morrison
Bankers
NatWest Bank plc
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Norwich
NR2 1NA
HSBC Bank plc
8 Canada Square
London
E14 5HQ
AIB Group (UK) plc
St Helen’s
1 Undershaft
London
EC3A 8AB
Virgin Money
15th Floor
The Leadenhall Building
122 Leadenhall Street
London
EC3V 4AB
JPMorgan Chase Bank
25 Bank Street
Canary Wharf
London
E14 5JP
Lloyds Bank plc
25 Gresham Street
London
EC2V 7HN
Danske Bank UK
75 King William Street
London
EC4N 7DT
Commonwealth Bank of Australia
Commonwealth Bank Place – South
Level 1
11 Harbours Street
Sydney
2000
Australia
Westpac
2 Gresham Street
London
EC2V 7AD
Independent auditor
Deloitte LLP
1 Station Square
Cambridge
CB1 2GA
Legal advisors
Leathes Prior
74 The Close
Norwich
NR1 4DR
DLA Piper UK LLP
Victoria Square House
Victoria Square
Birmingham
B2 4DL
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115 Colmore Row
Birmingham
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Linklaters LLP
One Silk Street
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Collins Arch
Level 20
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Melbourne
3000
Australia
CVS Group plc
Owen Road
Diss
Norfolk
IP22 4ER
01379 644288
Company No. 06312831
CVS Group plc
Annual Report and Financial Statements 2026