CVS Group (LSE:CVSG) shares were on the front paw, rising 5.2% to 1,262p, after the veterinary group refinanced £350m of bank facilities and authorised a £50m share buyback.
The facilities are provided by a syndicate of eight banks including Westpac, carry unchanged financial covenants based on bank test net debt to bank test EBITDA and bank test EBITDA to interest, and include an option to extend for a further year.
The Board set a capital allocation hierarchy that prioritises accretive acquisitions (targeting c.£50m per annum in Australia), approximately £30m per annum of capital investment, maintaining leverage at no more than 2.0x bank test net debt / bank test EBITDA except temporarily for attractive deals, and ordinary dividends, and it has authorised a Share Buyback Programme of up to £50m to repurchase shares in the open market for cancellation.
The Group has agreed an initial consideration of A$8.2m (c.£4m) for a single-site first opinion companion animal practice in Sydney and has signed contracts for a further Australian practice for A$3.2m (c.£1.7m) with completion expected in the coming weeks.
"We are pleased to have refinanced our bank facilities through to May 2030 on improved terms; this provides additional flexibility and firepower to launch a meaningful share buyback programme and invest in accretive acquisitions," said Richard Fairman, Chief Executive Officer.
