TIDMPVG
RNS Number : 4149Y
Premier Veterinary Group PLC
03 March 2017
PREMIER VETERINARY GROUP PLC
("PVG", the "Company" or the "Group")
Update Ahead of AGM
London, UK, 3 March 2017 - Premier Veterinary Group plc (LSE:
PVG) provides the following update in advance of its Annual General
Meeting being held at the offices of Stephenson Harwood LLP, 1
Finsbury Circus, London EC2M 7SH on 3 March 2017 at 11.30 am.
Premier Pet Care Plan Customer Growth
The Group's recurring revenue streams are driven by the number
of pets that are signed up to Premier Pet Care Plan ("PPCP"), a
preventative healthcare programme for pets. On 31 January 2017, the
Company announced the number of revenue generating pets on active
plans for the first quarter of its 2017 financial year, and in the
preceding four quarters as follows:
000's As at As at As at As at As at
Dec-15 Mar-16 Jun-16 Sept-16 Dec-16
United Kingdom 99 107 115 121 132
Europe 5 10 14 18 21
US - - - - 1
Total no of
fee generating
pets on plan 104 117 129 139 154
Overall, the number of pets on plan had increased by 48% over
the corresponding quarter in the previous year and 11% on a quarter
by quarter basis.
The number of pets on PPCP has continued to grow in all
territories during the second quarter ending 31 March 2017.
PPCP United States
On 16 February 2017, the Company announced that its wholly-owned
subsidiary, Premier Vet Alliance (US) Limited ("PVA"), had signed
its third US co-operation agreement since it entered the US market
in May 2016. The Board of PVG is confident in the prospects for the
US business and has agreed to significantly increase PVG's
investment commitment in the current financial year in the US to
further build its sales, launch and business infrastructure to take
the opportunity to build market share in future periods.
PVA now has co-operation agreements with:
-- Midwest Veterinary Supply, Inc., a major veterinary distributor based out of Minnesota, US.
-- Merritt Veterinary Supplies Inc, a leading veterinary
supplies distributor founded in 1938 and headquartered in Columbia,
South Carolina; and
-- Veterinary Practices Inc, a significant veterinary
distributor co-op, headquartered in Atlanta, Georgia, US.
These agreements promote the roll out of PPCP to their
respective member and client hospitals providing PVG with the
opportunity to access a significant segment of the available US
market in over half of the US states. The total number of dogs and
cats across the US is estimated at 70 million and 74 million
respectively (U.S. Pet Ownership & Demographics Sourcebook
2012).
The current number of US based employees is planned to increase
from 11 to 30 over the next 12 months to service the increase in
activity in this market. 78 hospitals (39 as at 30 September 2016)
have contracted to introduce PPCP to their client bases, of which
39 (10 as at 30 September 2016) have already commenced the launch
of PPCP. Andy Taylor, Group Business Development Director, who has
been employed by PVG for 7 years and has been instrumental in the
success of PPCP in the UK and Europe, has agreed to relocate to the
US for a period of 3 months to ensure the controlled expansion of
PPCP into the US market.
PPCP Europe
In Europe, PVG is focusing its resources in a small number of
countries where the market opportunity justifies the critical mass
required to deliver a professional service to the veterinary
industry. The countries identified include the Netherlands, France,
Germany and Denmark.
PPCP was launched in the Netherlands during the financial year
ended September 2015. Following the initial success in the
Netherlands, where the business has entered into contracts with
over 10% of the available clinic market, PVG has, through its
wholly-owned subsidiary, Premier Vet Alliance Limited, entered into
3 separate co-operation agreements with industry players including
with Zoetis, one of the world's largest animal healthcare
companies.
PPCP is branded as "Huisdieren Zorg Plan" in the Netherlands,
where total pets on plan has continued to grow strongly in line
with the Board's expectations.
The businesses in Germany, Denmark and France have been more
recently established during the financial year ended September
2016. The resources allocated to these territories have, however,
been less than intended during the current financial year due to
PVG's focus on the US.
In February 2017, PVG, through its wholly-owned subsidiary
Premier Vet Alliance Limited, entered into a cooperation agreement
for PPCP in France which is branded as Premier VetoPlan ("PVP").
The agreement is with MSD Animal Health (a wholly owned subsidiary
of Merck & Co., Inc.), who are the second largest global
manufacturer serving this market. This will result in their
representatives identifying and supporting practices which are
interested in launching PVP. Working on an exclusive basis with
this key partner, initially across 20 of its key accounts, PVG will
be able to more fully appraise the market for PVP.
Financing and Premier Buying Group
To finance the expansion of the PPCP business, in particular in
the US, and to progress the Group through to a position of
sustained profitability and cash generation, the Group is expected
to require additional funding of GBP2.0m, a significant proportion
of which would be incurred in the second half of 2017. In order
that the additional funding required for the PPCP expansion is
available, and to allow the management of PVG to focus the entirety
of their efforts on the PPCP business, the Board of PVG has agreed
to dispose of the Premier Buying Group and, to this end, PVG has
entered into a non-binding letter of intent to dispose of the
business, trade and assets of the Premier Buying Group for cash
consideration.
If the transaction completes, the net cash proceeds after
transaction costs and taxation will be used to repay existing debt
of GBP1.25m (GBP0.9m of which is due by February 2018), and the
balance of the net proceeds is expected to be sufficient to meet
the Group's expansionary funding needs as set out above.
There is, however, no guarantee that the transaction will
conclude. In the event the transaction does not complete, PVG will
continue to run the Premier Buying Group as a profitable and cash
generative part of the Group and the Board of PVG is confident that
the additional funding requirement and refinancing of existing debt
(net of the operating cash inflow from the Premier Buying Group) of
the Group can be met by other means, including additional
borrowings.
For the year ended 30 September 2016, the Premier Buying Group
contributed revenues and operating profit of GBP1,120k and GBP766k
respectively. As at 30 September 2016, the book value of gross
assets that are subject to the disposal were GBP100k. The disposal
of the Premier Buying Group, were it to complete, is expected to be
earnings dilutive.
For further information, please contact:
Premier Veterinary Group plc Tel: +44 (0)117 970 4130
Dominic Tonner, Chief Executive Officer
Will Evans, Chief Financial Officer
Square1 Consulting Tel: +44 (0)207 929 5599
David Bick/Brian Alexander
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Note to Editors:
PVG's services to third party veterinary practices, through its
wholly-owned subsidiary, Premier Vet Alliance Limited ("PVA"),
include the administration and support of a preventative healthcare
programme for pets branded "Premier Pet Care Plan" ("PPCP"); and
the operation of a buying group (the "Premier Buying Group") which
offers enhanced discounts to member practices on pharmaceutical and
consumable spending. In the US, where veterinary practices are
known as veterinary hospitals, PPCP is marketed through the
Company's wholly-owned subsidiary, Premier Vet Alliance (US)
Limited.
PPCP is a structured, preventative healthcare programme for
cats, dogs and rabbits and is available only through veterinary
practices/hospitals. The programme is seen as a way of providing
gold standard care for pets at an affordable price for the client,
by way of fixed monthly payments.
PPCP uses a clinical approach to prevention, as this is the most
effective method of ensuring illnesses are diagnosed more quickly
and not given a chance to advance. What truly sets PPCP apart is
its unique approach of offering an end-to-end solution and support
to the practice/hospital, which has been proven to work extremely
well. PVA works alongside practices/hospitals to create a
tailor-made, cost-effective service for clients, one that delivers
excellent care to their patients and significantly improves
practice/hospital performance.
The Premier Buying Group, is now the UK's largest veterinary
buying group without group interests in veterinary practices or
veterinary wholesalers offering its members the best discounts
across the industry on pharmaceutical and consumable spend.
For further details: http://www.premiervetalliance.co.uk/:
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, and any statements preceded by,
followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims",
"intends", "will", "can", "may", "anticipates", "would", "should",
"could" or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward- looking statements contained in this
announcement to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statements are based. As a result
of these factors readers are cautioned not to rely on any
forward-looking statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
March 03, 2017 02:00 ET (07:00 GMT)
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