 fell by nearly a quarter on Tuesday, after the group announced the sale of its buying arm to Animal Healthcare Services.){kind=link}
Shares in Premier Veterinary Group (LON:PVG) fell by nearly a quarter on Tuesday, after the group announced the sale of its buying arm to Animal Healthcare Services.
In a trading update, the company announced on Tuesday that, further to an announcement made on 3 March, it had completed the sale of the business, trade and assets of its buying group to Animal Healthcare Services – a subsidiary of Henry Schein – for a cash consideration of £6.3 million.
The original announcement caused shares to sink around 20 percent, with today’s announcement leading to a further fall. This is despite the fact that the number of pets on its Premier Pet Care Plan – from which the group derives its recurring revenue streams – increased by 38 percent over the corresponding quarter in the previous year, and 5 percent on a quarter by quarter basis.
“The net cash proceeds after transaction costs and taxation of between £4.5 million and £5 million will, as previously announced, be used to repay all existing debt of £1.25 million and further fund PVG’s international growth plans for its Premier Pet Care Plan business in both the US and Europe,” the company’s board said in a statement.
The company added that it has recently identified a number of differences between the UK and US markets, necessitating a different approach to certain elements of the provision of preventative healthcare plans in the US.
“Changes to the business model have been identified and are being actioned and as a consequence it is estimated that a further period of six months may be required until critical mass is achieved in the US”, Premier Veterinary continued.
Shares in Premier Veterinary are currently trading down 24.4 percent at 181.67 (1558GMT).