Good afternoon, everyone, and welcome to CVS Group's investor presentation. I'm Richard Fairman, CEO, and presenting alongside me today are Robin Alfonso, CFO; Paul Higgs, our Chief Veterinary Officer; and Ben Avery, our Australia MD.

Whilst not presenting, Charlotte Page, our Head of Investor Relations, is also present. Following this presentation, we will answer questions from analysts and, if time permits, Charlotte will then pose any questions from investors.

I'm especially delighted to introduce Ben, who joined CVS in February this year. Ben lives in Sydney and has a wealth of operational healthcare experience through his previous roles in both human and veterinary healthcare, and Ben will provide a fuller introduction later.

We are holding this presentation today to provide additional clarity on our long-standing and unchanged capital allocation policy, which we first set out in our Capital Markets Day in November 2022, and to give additional colour on the returns we have generated from our investments. In this presentation, we will cover the following: I will kick off by discussing the favourable veterinary market dynamics and explain why CVS is well positioned within the sector.

I will then provide some detail on our financial year to the 30th of June just gone, following the publication of our full-year trading update earlier this morning. Robin will provide a recap of our capital allocation priorities, explain the strong cash dynamics of our company, and our healthy balance sheet.

Robin and Ben will then discuss our disciplined approach to acquisitions and will provide a recap on why we chose to enter the Australian veterinary services market back in July 2023. They will also provide additional colour on our Australian business and our success to date, including the returns we are generating, the size of the opportunity ahead, and also the synergies which we expect to increase further with additional scale.

Paul will then discuss our disciplined approach to capital expenditure and the benefits and returns that growth capex [delivers?] , and Robin will share further details on returns we've generated from capital we have deployed in the past few years.

Then I will wrap up with some closing remarks. This event is being live-streamed and a recording will be available on our investor website following this presentation.

We have analysts present here in London and there will be a chance for analyst questions at the end of this session. As I mentioned earlier, if time permits, Charlotte will pose any investor questions from the call.

Now, I'm conscious many of you are very familiar with CVS and the veterinary sector we operate in, but others may be new to the story. Hence, I will kick off with an overview of CVS and the sector, give an update on recent developments, and also share my own thoughts on why I believe you should invest in the sector and specifically invest in CVS, and also why I believe now is an opportune time to do so.

CVS was formed in 1999 when the sector was first deregulated, and we have grown significantly over the past 27 years, largely through acquisitions. The graphic on the left of this slide gives a potted history of our development.

We first became a public company in 2007, and we stepped up to the main market in January of this year, with FTSE 250 inclusion following in March. We operate three divisions.

Firstly, we have our Veterinary Practices, which currently generates circa 89% of group revenue. We operate over 475 practices in the UK and Australia.

Here in the UK, we have 387 first opinion companion animal practices, nine specialist-led referral hospitals, 23 equine practices, and 15 farm practices, including a specialist poultry practice, Slate Hall. In Australia, we now operate across 57 practice sites, all of which are first opinion companion animal practices.

Secondly, we have our Laboratories, which contribute 4.5% of group revenue. We have two reference laboratories: Finn Pathologists in East Anglia and Axiom in the southwest of the UK.

We have a desktop laboratory analyser business called MyLab. We provide our laboratory services to our own practices and also to independent practices in the UK.

Thirdly, we have an online retail business in the UK called Animed Direct, which currently accounts for circa 7% of group revenue. This supplies pet food and also drugs to individual customers throughout the UK.

Across the group, we employ circa 9,000 colleagues, including 2,500 vets and 3,300 nurses. We are focused on providing high-quality clinical care to clients and their animals, delivered by a skilled team of clinical colleagues.

We are positioned as an employer of choice in the sector and are focused on attracting, retaining, developing, and supporting our colleagues so that they are able to provide this great care. CVS operates in a market with strong fundamentals, which has delivered long-term structural growth through economic cycles.

There are a number of compelling market dynamics which make the veterinary sector attractive. Firstly, the continued humanisation of pets means that owners increasingly treat their pets as an integral part of their family and wish to look after them.

This is evidenced by pets increasingly sleeping in bedrooms and often on beds, but is also seen in many other walks of life. For instance, it's now common for pets to be welcomed into shops and restaurants, and we increasingly see pets travelling on trains and aeroplanes.

I also understand that some owners have created social media accounts for their pets and are gaining increasing numbers of followers. Ultimately, this benefits us, with clients willing to spend more to access high-quality veterinary care in order to keep their pets fit and healthy for as long as possible.

Secondly, we have seen an increase in the global pet population following the COVID-19 pandemic. This increase was more pronounced in the peak of COVID lockdowns, when I think the benefits of companion animal ownership were widely recognised by us all.

Most of the surge in demand then was satisfied through breeders increasing the supply of puppies and kittens, and hence there's a COVID cohort of pets that are now 5 to 6 years old, and these will gradually age from here and naturally require more clinical care. We recognise that the surge in ownership during peak COVID was partly an acceleration, given it was a great time to train a puppy for those owners thinking about getting a dog.

Hence, we have seen a reduction in pet ownership since peak COVID, but nonetheless, the pet population remains higher now than it was prior to the pandemic. As those COVID pets age, we will naturally see increased demand, and I will ask Paul to provide some additional colour on this shortly.

Thirdly, pets are living longer, and hence, not only is the current pet population larger, the pets under our care will require our veterinary services for a longer period of time. This increase in life expectancy is driven by improved diet, but also by the advances in clinical care.

Those very advances in clinical care are the fourth key driver. We are now able to provide better clinical care to animals than we could even 20 years ago.

For example, in the area of oncology, we are now able to offer much more advanced and effective cancer treatment. Finally, the veterinary sector is proven to have a high degree of resilience through economic cycles.

Given the humanisation of pets, when animals get ill or injured, clients invariably bring them in for treatment, and this makes the market resilient. Surveys of pet owners consistently reveal that they are willing to sacrifice other spend to look after their pets, and this is reflected by the fact that we have never experienced a full year of negative growth.

From the chart on the right, you can see that CVS was consistently delivering like-for-like revenue growth of between 5% and 6% prior to the COVID pandemic. This growth was against a backdrop then of a flat pet population, and hence was achieved through a combination of pricing and increased care.

Now, the past few years have seen far more volatility due to a number of factors, including the COVID-19 pandemic, the Competition and Markets Authority investigation, more modest price increases in the past 3 years, cost of living pressures, and reduced consumer confidence, which has had an impact on footfall across the UK veterinary sector. Notwithstanding the volatility in this period, we have still delivered average like-for-like revenue growth between 5% and 6%.

We have also seen some significant inflationary increases in areas such as employer's National Insurance, national minimum wage and national living wage increases, and, of course, higher utility costs. As a result of the CMA process, we have applied more modest price increases over the past 3 years, and hence we have had to work hard to maintain margins in this period whilst also investing to position CVS well for further growth.

This brings me neatly on to why I believe you should consider investing in the veterinary sector, why specifically you should consider investing in CVS, and why I believe now is a great time to do so. The veterinary sector has delivered secular growth through economic cycles and, outside of economic downturns, has consistently delivered 4% to 6% growth.

This is driven by the structurally favourable market dynamics and the advances in clinical care, which I discussed earlier. Demand for clinical care has proven resilient through economic cycles.

I believe that AI will be an enabler to improving operational efficiencies over time, and I do not see AI as a threat. There will always be a need for vets to physically examine and provide treatment to animals.

The sector has also proven to be relatively price inelastic. Now that we have the CMA final decision, I am confident we can pass through price increases to cover inflationary costs.

These attractive features are evident in the UK, Australia, and other markets such as the US and have been widely recognised. This is reflected in the significant number of corporate groups now operating in the veterinary sector and the extensive private equity investments we have seen.

Why invest in CVS? We have established scale in the UK and are rapidly expanding our operations in Australia, following our entry 3 years ago this very week.

The UK and Australia are both attractive markets, and we are well placed for further expansion through acquisition. CVS Australia is already a material contributor to the group, and we have a strong pipeline of Australian acquisition opportunities, which will bring further scale and improved synergies.

Ben will discuss this later. We see an opportunity to return to accretive UK acquisitions.

We have made a number of developments over the past few years which position CVS well for future growth. Through providing support and development opportunities to our colleagues, we have built a reputation as an employer of choice in both the UK and Australia.

This is naturally important in the recruitment, retention, and engagement of our colleagues, but it's also important in positioning CVS as an acquirer of choice. Our UK companion animal practices have been on a common practice management system for a number of years, but we migrated to an improved cloud-based practice management system in the UK over 2 years ago.

This modern platform allows us to further enhance our customer experience and also streamline our operations through technology. We have a strong balance sheet and comfortable levels of leverage, and our recent successful refinancing means we have committed facilities through to May 2030, with a further 1-year extension at our discretion.

Therefore, we are well placed to deliver further accretive growth through selective acquisitions. As I previously said, we have proven our ability to maintain margins despite the inflationary pressures we have faced into.

Why do I believe now is a good time to invest in CVS? I referenced the increased pet ownership earlier and the specific COVID cohort of puppies and kittens.

These pets are now typically 5 to 6 years old—and I have one at home—and, for the most part, still in their early healthy adult life stage. However, these pets will gradually age, and as they do, they will naturally require more clinical intervention.

Through the clinical care we can provide, CVS is best placed to capitalise on this growth. We now have CMA certainty, and we are advanced in the implementation of the CMA remedies, with prices displayed on all of our UK companion animal websites from late 2025 and now over 80% of our UK practices jointly branded.

This joint branding creates new opportunities for us to increase client registrations and to drive increased footfall through targeted marketing and CRM. Notwithstanding the strong market fundamentals, the strength of CVS, the opportunity for growth through further acquisitions, and the potential for margin enhancement in our existing operations, our valuation remains significantly below pre-CMA levels.

We have not seen the rerating we hoped for following our step-up from AIM to the main market and following the announcement of the CMA's final decision, with the remedies generally considered benign. In light of this, we recently announced a £50 million share buyback program, and Robin will talk more about capital allocation later.

I truly believe in the opportunity, and indeed a significant chunk of my own retirement savings are tied up in the success of CVS. Before we conclude this session, I mentioned earlier the benefit we will get over the next few years as the COVID cohort of puppies and kittens age, and I will now ask Paul to join me on stage to illustrate this.

Paul.

Thank you, Richard, and good afternoon, everybody. Look, there's no doubt that the years 2020 and 2021 will be imprinted on all of our memories due to COVID.

During those years, many people found comfort in pet ownership, and the sales of puppies and kittens soared. This larger than normal cohort of animals are now between the ages of 5 and 6, and on average are in their most healthy and well-behaved years.

This slide is to demonstrate the common patterns that we see in veterinary care involvement in the average pet. Look, it's fair to say that, like anything, there will always be a spectrum of needs and some pretty big outliers.

I personally have diagnosed a life-shortening cancerous bladder tumour in a 9-month-old Dobermann puppy. I've also seen a very healthy 18-year-old cat who stepped into a veterinary surgery for the first time since they were neutered.

The graph here in front of you is an illustration of Fido Smith, the average Joe of the dog world. Puppies and kittens should begin life with a few visits to the vet to set them up for a long and healthy life, with vaccinations, preventative flea and worming, and usually neutering.

After that, most dogs and cats spend the next few years benefiting from occasional minor interventions for things like an ear infection, just like my own springer spaniel, intestinal upsets because younger dogs are definitely more likely to eat things that they definitely really shouldn't, and then some minor injuries such as a torn claw or a cut. A few unlucky pets will experience something much more significant, such as a fracture or an intestinal blockage, but thankfully for our animals, these are on average not common occurrences.

During these early years, we focus on improving the overall wellbeing to help to try to delay the onset of age-based diseases through things like dental hygiene, good dietary management, and weight control. HPC Advanced, our new HPC offering which we launched on the 1st of July, is a great product to help our clients to engage with this more.

Now sadly, as much as we would all rather that this wouldn't be the case, age comes to our pets far too soon. We haven't put the ages on here specifically because this varies dependent upon breeds, with the biggest negative predictor for life expectancy being body size.

However, certain breed types have genetic predispositions to diseases that make it less likely that they're going to reach double figures. Sadly, such as flat-coated retrievers, who are rather prone to white blood cell cancers.

In fact, if you like to, you can challenge me in the Q&A to name a common breed-associated disease for any breed you mention, although the more random that breed gets, the more unlikely it is that it's actually a breed. As age increases, we see progressively more interventions needed to maintain a good quality of life.

Now sometimes this is just a bit of arthritis, or maybe some infected teeth need to come out, but for some, we see a development of common age-related diseases such as heart disease, diabetes, kidney failure, Cushing's disease, overactive thyroid in cats, and, of course, the dreaded cancer. Now thankfully, veterinary care has moved on over the years, meaning that where owners want to and where we believe it is ethically acceptable, there is much more that we can do.

In my career, the biggest step forward, as Richard has mentioned, has probably been in our capabilities to treat cancers, either with surgery, chemotherapy, or radiotherapy. Critically though, unlike ourselves, we only ever use these treatments to improve quality of life for as long as possible.

Curative treatment doses often come with side effects that we can't really tolerate ethically. Our case here, represented by the bars—the blue and the pink—a Cavapoo, Poppy, shows how she begins life with spend mostly related to preventative healthcare in the blue.

Then a period of relative health, in which—and this is the poo in her—she has some allergic skin disease, which results in ear infections, but comes under good control with hypoallergenic diets. Then she's doing pretty well until a health check at the age of 10, she's identified with a heart murmur.

That'd be a left-sided apical systolic grade 3 out of 6, if you all know what I mean by that. She has a heart scan.

This heart scan confirms the presence of something we would call stage B2 mitral valve disease. That means that she started on a medication called pimobendan, which she will stay on for the rest of her life.

Again, she does pretty well for a couple of years after that. She needs some dental extractions at the age of 12—this is the Cavi in her this time—and she has regular checkups for her heart.

About 6 months later, her owner feels that her exercise tolerance is lower, and following our instructions, she finds that she's breathing fast when she's asleep, which is a warning sign of heart failure that we have prepared her for. X-rays confirm that she has heart failure, with some pulmonary oedema or fluid on the lungs, and she's started on some diuretics.

Sadly, like many heart failure cases, she has a number of episodes of deterioration needing about 24 hours of hospitalisation and increased medication until, at the ripe old age of 13 years old, her owner and her veterinary team agree that euthanasia is the kindest final treatment for her. Her owner stays with her throughout as her veterinary team care as much for Poppy's family as they do for Poppy, ensuring that her last moments are as calm and quiet as possible.

Thank you, Paul. I will now turn to our financial year just gone, following the publication of our full-year trading update earlier this morning.

Revenue for the financial year was in excess of £710 million, an increase of 5.9% over the previous year, with this growth being generated across all three of our divisions. Within this, like-for-like growth for the full year was 2.1%.

Our like-for-like growth was impacted in the final quarter by continued weakness in UK consumer confidence and the exceptionally hot spells of weather in the UK at the end of May and at the end of June. We saw clients less willing to travel in their cars with their pets in these periods, and a number of routine appointments were deferred and some scheduled procedures were cancelled.

We expect to report full-year adjusted EBITDA in line with market consensus. Adjusted EBITDA margin is expected to be broadly flat at circa 20%, reflecting our ability to maintain margins in the face of inflationary pressures.

We completed a further six acquisitions in Australia in the financial year, comprising 14 sites for an initial consideration of £45 million sterling. We have signed two further acquisitions, which we expect to complete in the coming weeks.

We currently now operate across 57 sites. Net debt at the end of June was circa £200 million, and we have finished the financial year with leverage of 1.63 times.

Now, we have significant headroom in both debt facilities and financial covenants, and leverage remains below our two times stated maximum. We will announce our full-year results on the 24th of September, and I look forward to sharing further details then.

However, I'll now hand over to Robin, who will discuss our capital allocation priorities. Robin.

Thank you, Richard, and good afternoon, everyone. This slide is a reminder of our disciplined approach to capital allocation, which we've applied consistently as a management team over the past few years.

Whilst our approach hasn't changed, I think it's important to reiterate our capital allocation priorities and to update on our recently announced share buyback program. Our capital allocation framework is underpinned by a hierarchy of clear priorities, supported by a disciplined approach under which each investment opportunity is assessed based on what is most accretive over the long term against other capital deployment opportunities before making investment decisions.

Our first priority is to maintain a healthy balance sheet. We recently completed a successful refinancing of our bank debt, and we now have committed facilities through to May 2030, with a 1-year extension at our discretion.

We are pleased that these new facilities were secured with a syndicate of eight banks and a 20 basis point improvement in margins, with increased flexibility. We benefit from favourable cash flow dynamics, with operating cash conversion in excess of 70%.

This cash generation, alongside our committed bank facilities and leverage at 30th of June of 1.63 times, provides us with capital for organic and inorganic growth and also gives us resilience through economic cycles. We have significant headroom in both committed and undrawn bank facilities and bank covenants.

One use for this capital is dividends. We recognise that ordinary dividends are an important component of shareholder returns, which is more important for some investors than for others.

We have maintained a progressive dividend policy, under which we expect to recommend the payment of a final dividend in respect to the financial year just gone. We will announce details of this alongside our full-year results in September.

The remaining capital is then directed to whichever option generates the highest risk-adjusted returns over the longer term. We have three main options: Acquisitions.

We have an attractive pipeline of accretive, bolt-on acquisition opportunities, currently focused in Australia. We expect to deploy circa £50 million per annum in Australia, subject to timing and availability of opportunities that meet the group's criteria.

Ben will provide more colour on these Australian opportunities later. We'll also look to make accretive UK acquisitions and see an opportunity to further expand our presence in the UK.

We are confident that incremental, long-term shareholder value will be created from further acquisitions, and whilst we anticipate investing £50 million per annum, we will retain flexibility to make additional attractive acquisitions where the opportunity presents. We have capex.

We have capital investment opportunities to invest in organic growth. Please note essential maintenance capex is included within our 70% plus operating cash conversion.

We take a disciplined approach to capital investment, which is aimed at delivering accretive shareholder returns significantly in excess of the company's cost of capital. This investment is focused on driving increased revenue and enhanced margins through improved clinical facilities and equipment, enhanced client experience and loyalty through new technology, and improved employee engagement and retention.

This investment naturally also leads to increased operational resiliency. Total capital investment, including maintenance capex, is expected to amount to approximately £30 million per annum, with each investment assessed against our criteria and other uses of capital.

Paul will provide further detail on this investment later. Shareholder returns.

Any capital deemed surplus to our requirements may be returned to shareholders, and that will include situations where a return to shareholders is the most accretive of the three options. We recently announced a £50 million share buyback program, and as of last week, we have acquired 1.4 million shares at an average price of £12.28 and spent over £17 million in doing so.

We recognise differing shareholder appetites for leverage, but we continue to believe leverage should be maintained at no more than two times bank debt to EBITDA. However, if additional attractive acquisitions arise, we would consider temporarily increasing leverage above two times, provided that there's a clear runway to return to below two times leverage.

We will continue to keep capital allocation under close review and will provide additional colour on our approach and the returns we are generating in the remainder of this presentation, starting with acquisitions. I will now ask Ben to join me on stage to discuss our disciplined approach to acquisitions and the opportunity ahead.

Thank you, Robin. Good afternoon, everyone.

As Richard mentioned, I joined CVS in February, and I can honestly say it's a business that I've wanted to be a part of for quite some time. Before I tell you why, just a quick personal note.

I live in Sydney with my wife and daughter. For how I got here, I've spent 15 years in healthcare across Australia and New Zealand, all of it in multi-site clinical businesses, much of it growing through acquisition.

Most relevantly, I spent almost 5 years at VetPartners in Australia and New Zealand. I have to note that is different to VetPartners here in the UK.

My role there included leading the business operations and strategy across their 270 plus clinic network. That's where I worked first closely with Nathan McKelvey, now our Acquisitions Director, integrating newly acquired clinics and setting them up to thrive.

It's also where I came to genuinely respect the veterinary profession and the dedication of the people within it. Most recently, I was the Chief Operating Officer at MoleMap under private equity ownership, overseeing 110 skin cancer clinics across Australia and New Zealand and leading the strategy and execution behind the network's growth.

For a lot of that time at MoleMap, I was watching CVS from a distance. I saw the clinics being acquired and thought, "This business is getting something right to attract the calibre of clinic and clinician they were acquiring."

When the opportunity came for me to join CVS, I couldn't be more excited. The thread running through my career is scaling multi-site businesses on clinical excellence and commercial discipline, and that's exactly what I found here at CVS, and it's why I'm so pleased to be a part of it.

I'll shortly provide some more colour on the Australian operations, but first, Robin will introduce this session with a brief recap.

As Richard mentioned, CVS was formed in 1999 and were one of the first corporate consolidators of veterinary practices in the UK. We've grown largely through acquisitions over the last 27 years, and most of that growth has been in the UK.

We entered the Australian veterinary market in July 2023, 3 years ago this week. Both these markets are large and attractive, with high levels of pet ownership and the same trend in humanisation of pets.

We maintain a very disciplined approach to acquisitions as a management team and have consciously focused on acquiring high-quality companion animal practices. The multiples we are willing to pay for acquisitions are linked to our own current share price and the implied CVS multiple.

Prior to the CMA investigation, we were acquiring practices in the UK at a multiple of circa 10 times EBITDA, and this made sense at the time given CVS's multiple exceeded this. Following the CMA process, together with a weaker economic backdrop in the UK and other macroeconomic factors, our implied CVS multiple has reduced to circa eight times, and hence it does not currently make sense for us to acquire above this.

Our recent focus has been on Australia, where we've been very selective in acquiring only the best practices at multiples of circa six times. The market is large at $3 billion, with around 3,600 practices.

Consolidation is low at around 20%, with CVS representing roughly 1.5%. We are applying a proven model in a market that is years behind the UK in consolidation terms, and there's both a significant and exciting runway ahead.

We've been selective about what we buy. Our focus has been on larger companion animal first opinion practices with good facilities in the major urban areas.

Buying the right clinics with the right teams operating to the right standard de-risks our investment. The UK market is larger at circa £6.7 billion, with around 5,600 practices.

Whilst consolidation is much higher at around 60%, CVS only has circa 8% to 9% market share. Post the CMA, we expect multiples to fall, and with plenty of whitespace, there is also an exciting opportunity to consolidate further.

On this slide is an illustration of what the acquisition funnel in Australia looks like and the process we follow. The majority of our leads are self-sourced, with a number filtered out at stage one if they don't meet our selection criteria around location, number of vets, required clinical standards.

For the roughly 60% that do meet our selection criteria, a business case is prepared to support a valuation and offer. 40% of the total will reach offer stage.

All offers are approved by executive board members before they are issued. A number of opportunities will fall out between meeting the acquisition criteria stage and the offer stage, often because there are gaps against our selection criteria.

Of the offers made, roughly half are accepted. Whilst we're not prepared to overpay for assets, we will take into consideration in our valuation strategic opportunities that unlock value.

The majority of offers accepted are completed. Now, there are often issues that arise during due diligence, but that needs to be dealt with, but it is rare that it leads to us pulling out, but it does happen.

In Australia, the CMA equivalent is the ACCC. Since the 1st of Jan 2026, legislation changed that moved ACCC mergers approval in some cases from a voluntary process to a mandatory one.

Now, we have proactively approached the ACCC on a voluntary basis for some of our acquisitions to date, and all of those have been approved. The process is therefore well known to us, which is helpful because we're now almost of a size that we will need to approach the ACCC more regularly.

As you see, this disciplined approach leads to us acquiring only 20% of all opportunities, with many dropping out because they don't currently meet our selection criteria or valuation.

We now operate across 57 practice sites. As you can see on the map, these are located in major urban areas, such as Brisbane, Sydney, Melbourne, Adelaide, and Perth.

These are established, high-quality practices, each with a strong reputation in its local community. That quality is what makes our growing presence in Australia create a genuine two-way exchange.

Our Australian teams benefit from the depth and experience of the wider group, and our UK colleagues gain fresh insights from high-quality practices we have acquired in Australia. We are actively facilitating that change across the group.

Standards of care are very similar across Australia and New Zealand, but I'm delighted to say Australia is ahead in some of the preventative medicine areas. Preventative dentistry is a really good example.

Australian owners routinely bring their pets in for the kind of dental care people expect for themselves, such as scale and polishes and dental X-rays, while in the UK dentistry until now has been more reactive, resulting in extractions that could have been prevented if earlier intervention had occurred. These are insights we are sharing across the group, and we are learning in return.

The UK, for example, is more advanced in antimicrobial stewardship, which helps slow antibiotic resistance, an issue that matters for animals and people alike. That exchange of clinical knowledge points to something fundamental about this business.

We are a people business, and to sustain this financial performance and grow revenues and earnings over time, we need to attract and develop and retain high-quality colleagues. Clinical development is a major driver of where vets and nurses choose to work, and our portfolio is built to deliver it.

Our disciplined approach to acquisition and the clinical depth that follows creates a natural environment for colleagues to grow and develop. That depth is real and tangible across our Australian portfolio.

We have sites offering CT imaging, advanced surgical capability, internal medicine, and laparoscopic procedures—clinical offerings that aren't offered in everyday GP practices routinely. The practices we have acquired invested in those capabilities for a good reason: they deliver better outcomes for the pets in our care, and they attract and develop top talented colleagues, and they support strong revenues and healthy margins.

Beyond local clinical development, we are using the breadth of our team to deliver hands-on learning across the portfolio. We are building meaningful clinical careers and pathways so that that depth of opportunity is visible, structured, and retained.

Together, that is something central to building CVS's reputation as a veterinary employer of choice in Australia. CVS Australia is also reaching a scale where we're becoming known beyond just the veterinary sector into the broader healthcare market.

This is changing the calibre of talent we can attract. Leaders who have built and scaled businesses in complex regulated healthcare environments are now actively reaching out to join us.

Our Head of People & Culture is a good example. She brings deep M&A experience from a highly regulated aged care business that doubled in size in just 3 years.

We also balance that commercial capability with clinical leadership from within the veterinary profession. Our Veterinary Medical Director brings more than 23 years in practice, and that clinical credibility sits at the heart of everything that we do.

We take the same deliberate approach to how we build our in-country support office. We size appropriately so that the business always has what it needs for the next phase of growth.

We leverage the strength of our established UK functions in areas such as finance, IT, and procurement, which keeps our cost base efficient and creates real synergies. Where we add roles locally, we add proven leaders with the depth to scale with us.

The result is that our foundations, our people, and our systems are enablers of growth, never constraints on it. Let me bring this to life with the clinical depth, the investment in people, and the returns that generates with two examples from our portfolio.

This is a single-site practice in Adelaide employing five vets. It's a great modern facility with modern clinical equipment, and it's a good example of a pattern we see right across our portfolio, where we invest in clinical depth and in developing our colleagues, patients get better standards of care, and a strong-performing business follows.

You can see that in three ways within this clinic. First, client acquisition is built on clinical education.

The practice has published hundreds of clinical articles on its website, so that way, when pet owners search online for their pet's diagnosis, the practice's content ranks highly and bring those clients through the door. Footfall stays consistently strong because the marketing is genuinely useful to pet owners.

This is something that we've actively learned from at this practice, and we're now building it into a scalable approach across the network rather than leaving it as one clinic's advantage. Second, we invest in developing our people.

At this practice, we invested in in-clinic dental radiography training, lifting the vets' confidence in identifying and recommending the right treatment. Dental procedures now account for strong patient volumes through this practice.

When we build our team's clinical skills, patients get better care and the business benefits follow. Third, the clinic retains high-value surgical work in-house, including a substantial volume of orthopaedic surgery, rather than referring those cases out.

Patients get continuity of care in a practice they know. Our colleagues get hands-on exposure to more complex cases, which builds their skills and their careers.

It makes the practice a referral centre inside our own network because other clinics know their patients will get a great standard of care here. That clinical focus shows up in the numbers.

The practice has performed well since acquisition, with revenues, margin, and EBITDA all increasing. Gross margin has improved by 590 basis points and EBITDA margin around a 1,000 basis point improvement.

As you can see from the slide, we are generating good returns from our investment, with an IRR pre-synergies of 17%, an expected payback period of 8 years based upon our current projections, and an expected 3- to 5-year return on capital employed of between 26% and 31%. Another example is this practice in New South Wales.

This is a larger practice, operating across three sites and employing eight vets. Again, with a great modern facility and the right clinical equipment.

Like the Adelaide example, this practice shows the same pattern: clinical depth and colleague development translates into better care for the patients and a strong-performing business. It's an accredited hospital of excellence with an excellent reputation in its community.

This is an industry accreditation awarded by the Australian Small Animal Veterinarians group to practices that meet the highest standards of clinical care, facilities, and practice management. It's held by only 50 hospitals nationally.

Around 10% of those hospitals already sit within our own network, proof that practices holding the highest standards in the country are choosing CVS. The clinical offering is advanced, including soft tissue surgery and orthopaedic.

The practice is Fear Free certified. It's a recognised veterinary standard for reducing stress and anxiety in patients.

That certification reflects real investment in training the whole team, and it matters twice over: it supports better clinical outcomes and builds a level of trust with clients that keep them coming back and referring to others. Alongside the clinical investment sits the commercial benefit every practice gains on joining us: group buying power on drugs and consumables that delivers significant leverage in gross margin.

This practice shows what that combination produces, with clinical excellence driving revenues and group scale protecting the margin on every dollar of it. The results follow: revenue has grown by around 18% since acquisition, EBITDA margin has improved by around 990 basis points, reflecting a healthy, sustainable business built on that clinical foundation.

This investment has an IRR pre-synergies of 14%, an expected payback period of 10 years based upon our current projections, and an expected 3- to 5-year return on capital employed of between 19% and 23%.

Thanks, Ben. There's a lot of information on this slide.

The vertical axes on the chart is ROCE, return on capital employed, and the horizontal axes is time in years. The line on the chart represents what ROCE would have been over time based on a conservative IRR of 12%, which is above our weighted average cost of capital.

You can see ROCE starts off low and increases over time. The bars represent the ROCE performance for acquisitions in that cohort.

The first bar is the ROCE performance for acquisitions we've held for 1 year, acquisitions we made in 2025. The bar is above the IRR line, we're overperforming.

The final bar represents the ROCE performance for acquisitions we've held for 7 years, acquisitions that we made in 2019. Again, the bar is significantly this time above the IRR line, we're overperforming.

Over the past 7 years, acquisitions in total are performing significantly above conservative IRR of 12%. For our Australian acquisitions, we do not currently include synergies in the business case, but we do expect synergies to add up to 3 percentage points on IRR.

Were we to include exit assumptions, as might be considered by, say, private equity, IRRs would potentially be significantly higher. I said earlier that Australia represents both a significant and exciting runway, and I've tried to illustrate the size of the potential opportunity on this slide.

In Australia, there are circa 3,600 practice sites. Albeit, given the size of Australia, many of these are in more rural areas.

Our focus is in metro areas, where there are significant populations of people and hence a significant number of both pets and vets. Circa 1,440 practices will fall into metro areas.

Of these, about 80% are in private ownership, which represents 1,152 independent practice sites. Our experience is that roughly 40% will end up in an offer, which represents 461 practice sites.

At a win rate of 50%, would represent 230 sites, and at an average EBITDA per site of $0.4 million, would represent a potential EBITDA opportunity of circa $90 million. Importantly, as we grow, our criteria can also evolve.

We have turned away more deals than we've gone ahead with, some because we felt they were slightly too small and some where the practice facilities needed improvement. The majority of these remain in private ownership, and we have continued our dialogue with the vendors.

Some of these will become attractive to us once they've reached a scale or once their facilities have been improved. If we include practices we already own and potential market growth, the Australia business can conservatively deliver between $105 and $135 million EBITDA in time.

Hence, our target addressable market in Australia is significant, and I can easily see CVS Australia being as big as our UK business. We will continue to take a disciplined approach to acquisitions, both in Australia and in the UK, and have a strong pipeline of Australian acquisition opportunities, and I look forward to completing further deals in due course.

I will now ask Paul to join me on stage to discuss our disciplined approach to capital expenditure.

Thanks, Robin. Alongside our focus on acquisitions to drive inorganic growth, we also recognise the opportunity to drive organic growth through capital investment.

This growth capital investment, whether in facilities, clinical equipment, or technology, is focused on delivering increased revenue and enhanced margins. Where it makes financial sense and we are confident in the returns we are likely to generate, this growth capital investment brings an added advantage of increasing the engagement and productivity of our clinical teams.

Over the past few years, we've consciously invested in three key areas: Firstly, we've improved our practice property and facilities through refurbishments and, in some cases, relocations. Back in November 2022, we held a Capital Markets Day in which we shared the bell curve distribution of our practice margins, and we said that this was closely correlated with the quality of the practices.

We've invested over the past 4 years to improve the average quality of our practices, and this brings increased capacity and the ability to provide better clinical care. Secondly, we've invested in our clinical equipment to drive revenues and margins.

As Chief Veterinary Officer, I can clearly see the clinical benefits from investing in new kit. However, I must stress that we only invest where we believe that financial returns merit it.

We don't invest in shiny new clinical equipment simply to help engage our clinicians, and I'd expect all of my clinical colleagues to fully understand that the investment is only possible where expected financial returns support it. Thirdly, we've consciously invested in our IT and technology.

This includes our new cloud-based practice management system, but we've also invested in our websites and our client experience. I'll expand on each of these three areas shortly.

Before I do, I also need to explain that there is a certain level of maintenance capital expenditure which we have to incur. This is the minimum investment that we're committed to in order to maintain our existing facilities, and we expect this to be circa £12 million per annum.

Any capital investment in excess of this is a conscious investment decision, although I recognise that some growth capital expenditure may also bring a maintenance benefit. At the November '22 Capital Markets Day, we set out guidance that our annual capital expenditure, including this essential maintenance capex, was likely to be between £30 to £50 million per annum.

This was due to the portfolio of practices that we'd inherited, and we have made really good progress in improving our facilities over the past few years. We now expect that capital investment to be no greater than £30 million over the coming years, with each individual investment needing to generate sufficient returns.

I'll now discuss each of these investment areas in turn, starting with investment in facilities. This investment in our practice sites has been targeted, with priority given to those sites that we believe have growth opportunities and where improving the client front-of-house experience and expanding our clinical capability will lead to good financial returns.

We've consciously invested in a limited number of property refurbishments and relocations as a result of this. More recently, we focused on improving a larger number of sites through modest investment at each.

As shown in the chart on the top right of this slide, I'm pleased to report that we've seen an improvement in the RAG rating of our practices from this investment. Importantly, the chart below shows that we've also seen an improvement in our client Net Promoter Score.

Now, whether for property investment or other growth capex, our approach to assessing capital expenditure is similar to that for acquisitions, which Robin explained earlier. Our operational teams will consider opportunities for investment, and where considered appropriate and where the expected financial returns are considered attractive by finance business partners, these opportunities are worked up into capital expenditure business cases.

These business cases would include an overview of the proposed investment, the upfront capital expenditure and any ongoing operational costs or savings as a result, the revenue and margin upside expected, the implementation plan and timing, detailed financials showing the upfront and any ongoing investment, the revenue and margin upside, projected cash flows net of taxation, the overall payback period, IRR, ROCE, and return on invested capital. Business cases for capital investment above £100,000 are presented to the capital expenditure committee, which comprises myself, Richard, and Robin, as CEO and CFO respectively, and the relevant operational, property, IT, and finance team members.

Any approved capital projects are then allocated a capex number so that investment and returns can be appropriately tracked. We also then undertake post-investment appraisal, which Robin will discuss later.

This is an example of one of our property relocations: Maison Dieu, a practice in Dover, in the southeast of the UK. We previously operated this from a former residential property.

We saw a really good growth opportunity in the area and invested circa £1 million in relocating it to a new facility, with two additional consulting rooms and an additional operating theatre, which we opened 2 years ago. We've seen a steady growth in revenue and gross margin in that period, and notwithstanding increased employment costs, EBITDA has increased.

This investment is expected to have a 10-year payback period and to generate an internal rate of return of 14% and a 3- to 5-year return on capital employed of between 13% and 17%. Another example of a practice relocation is Ruddington, a practice in Nottingham in the centre of the UK, which again was housed in a former residential property with limited parking.

We invested just under £1 million in relocating this practice to a new facility which opened in the winter of 2022. Again, we expanded the capacity of the practice through adding two consulting rooms and an additional operating theatre.

As for Maison Dieu, we saw an increase in both revenue and EBITDA post the investment, and we expect a 7-year payback for this investment, with an internal rate of return of 21% and a 3- to 5-year return on capital employed of up to 39%. Both of these relocations have delivered enhanced revenue and EBITDA, and given the challenges that we faced in the past 3 years through the CMA process, weaker consumer confidence, and significant inflationary pressures and the global macroeconomic and political uncertainty, these returns may not be as strong today as we forecast, but they are still expected to be accretive.

Robin.

Thanks, Paul. This chart is similar to the one I shared earlier on acquisitions.

The vertical axes on the chart again is return on capital employed, and the horizontal axes again is time in years, and the line on the chart represents what return on capital employed would be over time based on a conservative IRR of 15% for capex, which again is above our weighted average cost of capital. Again, you can see ROCE starts off low and increases over time.

Again, the bars represent the return on capital performance for capex investments in that cohort, and we've picked out renovations and relocations. The first bar is the return on capital employed performance for capital investments we have benefited from for 1 year, capital investments made in 2025.

The final bar represents the return on capital employed performance for capital investments we've benefited from for 5 years, capital investments made in 2021. When we expand facilities, it can take time for us to grow our customer list and realise the full value.

However, we do see a gradual improvement in revenue and EBITDA over time, and we typically expect an IRR of greater than 15%.

The second focus of our investment capex is clinical equipment to drive improved client service and patient outcomes, which in turn drives enhanced revenue and EBITDA. Two examples are dental X-ray machines and CT scanners.

Back in 2021, we had 82 practices with dental X-ray machines, and these are really important in enabling vets to provide a full range of dental services, which are increasingly demanded by clients. Through investing in more dental X-ray machines, we have more than doubled our revenues from dental procedures, and as Ben flagged earlier, we still have some way to go before we achieve the preventative dental revenues which are being generated by our Australia practices.

We've almost doubled the number of CT machines across our practice estate. As a specialist myself in internal medicine, I recognise the importance of highly detailed, cross-sectional, three-dimensional images and clearer images than can be obtained from X-ray alone.

I personally could not provide my specialist services without one of these. However, these are more expensive pieces of equipment, and it would never be appropriate for each first opinion practice to have their own CT.

However, we have installed CT machines in selective practices where they're performing more advanced clinical work and where their use can be shared by other practices in the region. This has led to an almost 50% increase in imaging revenue to date.

Across all of our investments in clinical equipment, we've generated good returns, with payback averaging 5 years, an internal rate of return of over 20%, and a return on capital employed of over 30% by year three. The third area of our capital investment is in technology.

As a vet, I am proud of the profession and the clinical care that my fellow clinicians consistently provide to the animals under our care. We've always put animals first, and we see ourselves as a service for them.

However, I recognise that we may not always have focused on the service that accompanies that for the client. As Chief Veterinary Officer, I'm encouraging all of our clinical teams to focus on providing contextualised care to our clients and their animals, so that the needs of all parties are properly reflected in the choices presented to our clients and the care that we ultimately provide to their animals.

As part of this enhanced client focus, we are consciously investing in our technology to improve the ease with which our customers can engage with us. This is expected to drive both enhanced customer experience as well as efficiency savings for CVS.

Our cloud-based practice management system is the foundation for this, and all our UK vets working in our companion animal practices and referral hospitals have access to all clinical records of every pet under our care. This brings a significant benefit.

For example, again, as a specialist vet, for any CVS client whose animal is referred to me, I can see the full clinical history. I no longer have to rely on the first opinion practice emailing records or, in the case of an emergency, the client having to provide their own version.

This undoubtedly leads to improved patient outcomes. The cloud-based nature of this system and the open API interfaces mean that we're now able to add additional features to drive a better client experience.

We launched online booking across all our UK companion animal practices over a year ago, and we've been trialling an AI scribing tool to enhance the client experience and also to improve efficiency for our vets. We've got additional features in development or trial, including the ability for two-way client conversations via an app, and our aim is for all clients to be able to access our services and to receive reminders via their phones, including the ability to pay for services.

On the subject of phones, as a CVS vet, I already have access to, if I can find it, a range of clinical services, resources, and information at the tap of a button. Maybe I'll show you this later on.

We provide our colleagues with an app called My Guide, which provides them access to all of the clinical guidelines at the flick of a button. I genuinely believe that our vets have the best training, development, and clinical support of any in the profession.

I'm confident that the investment that we've made over the past few years positions CVS incredibly well for future growth. I look forward to sharing further details in future updates, but for now, I'll hand back to Robin.

Thanks, Paul. One key area of focus has been improving the look and feel of our online retail business, Animed Direct.

Whilst our previous website was functional, we recognise that the user experience fell short of expectations, and hence we have consciously invested in a new website and functionality. This chart depicts my own recent buying journey on Animed Direct.

At the start of the journey, I landed on our new refreshed website. It's quicker, it's more secure than our old one, and we know that a quicker website drives higher conversion rates.

We've also improved our taxonomy and search, I was able to find the product I wanted quickly. When trying to place the product in the basket, I was clearly offered a Subscribe & Go option.

What we do know is that if someone is coming to buy pet food, they will need another bag of pet food in the future. Subscribe & Go makes up a relatively small part of our revenue, and there is potential for significant growth in repeat orders.

I decided I only wanted one bag of pet food, and when I placed my product in the basket, I was offered relevant cross-sell options, which was not always the case, so that was good. I then went to checkout, and I was offered a guest checkout option.

This option has only recently launched, where previously you would have had to either register or remember your login details, both of which are potential barriers to completion. Guest checkout clearly will not be available for prescription medicines because we need to have details of the pet and sight of the prescription in order to dispense.

In the checkout, for an additional fee, I was offered next-day delivery, which was only introduced in the last month. Our distribution centre in Diss now operating 7 days a week at minimal incremental cost.

Then when I went to pay, I was offered Apple Pay and Google Pay, which are new payment options, which made it incredibly easy for me to transact. Hey presto, the next day I had a bag of pet food delivered to my door for very little effort.

These enhancements have helped significantly improve the performance of Animed Direct in the second half of the financial year just gone, and I look forward to sharing further details of this in our annual report, and there is still more to come. To summarise, this slide highlights group return on capital employed over the past 8 years.

There have clearly been some factors that have put pressure on ROCE over this period. In the latter years, we've seen weaker like-for-like, high inflation, but also the initial dilutive impact of capex and acquisitions.

That said, given the characteristics of the market we operate in and the characteristic of the growth opportunities we have, I'd expect ROCE to gradually improve over time. I will now hand back to Richard for some closing remarks.

Thank you, Robin. The investments which Robin, Ben, and Paul have discussed position CVS well for future growth.

CVS has consistently delivered like-for-like growth of 6% through economic cycles, and margins have been maintained despite the inflationary pressures we have seen in recent years. We have an opportunity to enhance margins further through acquisitions and the scale advantages which flow from them.

We have a healthy balance sheet, and we benefit from high operating cash conversion from our predictable and recurring revenue streams. Our ability to deliver compound returns through acquisitions is evident through our recent growth in Australia, and selective investment in facilities, equipment, and technology can enhance those returns through supporting inorganic growth.

The returns from this investment are enhanced over time, and we are targeting high teens returns on all capital employed. Our balance sheet strength and cash generation mean that we have options under our clear capital allocation priorities.

The attractiveness of each option is clearly somewhat dependent on our prevailing share price, and I hope we see a rerating of our valuation over time. I would like to close this presentation with a brief recap.

We operate in a large and attractive veterinary market which has strong fundamentals and where I expect AI to be an enabler to improved operational margins over time. There will ultimately always be a need for vets to physically examine and treat animals, and hence I do not see a significant threat from AI.

We have delivered consistent growth across a number of periods. EBITDA margins have been maintained despite inflationary headwinds.

We have a disciplined approach to capital allocation, a healthy balance sheet, and capital to deploy, and we have a history of delivering accretive returns. Our target addressable markets in the UK and Australia are large, and we are confident in our ability to generate accretive returns from further acquisitions.

We have strengthened our operations and have built a platform for growth. We have all the characteristics of a growth compounder.

Our valuation remains significantly below pre-CMA levels, and I firmly believe now is a great time to invest in this sector and in CVS. Thank you.

I'd now like to open this session to analyst questions. Feel free to take Paul up on his offer earlier and challenge him to think of an obscure breed and test his clinical knowledge.

If I can ask my colleagues to come back on stage, and we'll open the session for analyst questions. Charles.

Thanks, Richard. Lots to get through there.

Thanks for all that info. I think the standout for me was the scale of opportunity in Australia, which looks a lot bigger than we've discussed in the past.

Do you want to just talk through why the scope of increase has been so great? Is that because you expect to make more acquisitions, or you think that the like-for-like growth will be higher, or the synergies will be higher, or a combination of all of those?

Good, I think it's a combination of all. We are very pleased with our entry.

Delighted to have Ben on board as well and leading our operations in Australia. We've seen good performance from the practices we've acquired, but we have been selective, as we talked through earlier.

We, as Robin said, have turned away more deals than we've gone ahead with, and a number of those smaller deals or those practices with practice facilities that just need some improvement, we are in dialogue still with those potential vendors, and we expect some of those will return to us as opportunities. I also think as we build more scale in the regions we are already operating in, that allows us to kind of add bolt-on acquisitions that make more sense once we've got scale in operating regions.

The market is significant and we are at an early stage of consolidation. I think, Ben, you'd describe it as probably a bit like the UK market maybe 10 years ago, there's plenty of opportunity for growth.

Maybe you can touch on the opportunity for synergies and what we're seeing already, and also the like-for-like growth we're achieving.

From a like-for-like position, we're actually really pleased of what we're seeing. A lot of that like-for-like growth is actually coming from the disciplined acquisitional approach that we are taking.

Now, I spoke around clinical depth really drives growth and revenues growth, and because we've been disciplined in that acquisition and the types of clinics that we have been acquiring, it's been a really, really positive trend from a like-for-like position. I think not only that, the Australian economy is reasonably resilient, and I think that that's for two bases: the first is we have one of the largest pension funds in the world, and that is used as a vehicle to stimulate the economy.

Second to that is that our mining and minerals aspect is also quite supportive. We're not immune to, obviously, the global macroeconomic conditions, but we do find that we are somewhat more resilient.

I think from a synergies perspective that Richard spoke about, that's only going to get greater as we continue to add acquisitional growth in. I touched on the gross margin aspect earlier, where we see that more and more acquisitional growth that we are having with local suppliers, the heavier or the larger the leverage capability that we have to gain more synergies and better buying power within those aspects.

Equally, just from a employment position and a support office position, we have the likes of our IT functions as well as areas such as accounts payable, if you will, where it does not make sense to have local delivery when we can leverage a lot of our UK colleagues and the functions that are already built.

I will add to that as well. The opportunity has always been there.

I think we have increasing confidence given our experience of both the acquisitions, the process, and the post-investment analysis that we've carried out, it makes it a bit easier for us to then quantify the size of the opportunity. It was one of the reasons why we entered that market, because there was a large opportunity for us to potentially benefit from.

That like-for-like growth that you're still targeting of 4% to 8%, where would Australia fit into that target, then?

Australia is performing well. We haven't actually given a like-for-like number for Australia, but it's performing well.

Yep.

Robin, you talked about buying the practices at roughly six times EBITDA. I think we've previously talked about six to eight times.

Can you just be clear: is that including the contingency consideration?

The multiple ranges probably just under six times up to close to seven times over 3 years, and on average is a six times EBITDA multiple. It starts off slightly lower.

As you have the deferred contingent consideration that you refer to, that we pay typically over 2 years. Just as a reminder for everyone, we have a valuation for the enterprise value.

We then pay 80% often is 80 70% to 80% upfront, and then we defer a proportion over a period of time. For us, that's important because it's a good retention tool for the vendor.

It allows us to establish ourselves within the practice. Also, we hope that the vendors will stay, but if they don't, allows us to manage succession.

That's an important part of how we acquire practices. So 20% is deferred, and if they hit certain profitability gateways, then that deferred gets paid out.

If they don't, doesn't get paid out. The six is an average over the 3 years, including the deferred.

Has that come down, or you just got a larger number of contributors to that?

I think it will depend on the type of practice that we acquire. I think when we initially entered the Australian market, we purposely focused on the really premium assets, and we probably, given that we were new to the market, had to pay slightly higher multiples.

I think as we establish our reputation in Australia, we have seen some improvement in terms of what we need to pay from a valuation perspective. Having said that, for strategically important assets, the multiple may be slightly higher, but it has slowly improved over time.

One last question. Could you just comment about competition for acquisitions in Australia?

Ben, please expand. We knew when we entered the market there were two established large consolidators: a company called VetPartners, Ben knows very well, having worked there, currently owned by EQT, previously owned by JAB Holdings.

They're the largest consolidator in Australia, with about 270 practices, I believe. They, under new ownership, I think EQT acquired them in the last 18 months, they are acquisitive, more focused on New Zealand at the moment than Australia, but we expect them to provide some competition for assets.

The other large established consolidator is Greencross, currently owned by TPG. You may have seen there were rumours that TPG were going to sell to Kohl's.

That sale, I understand, fell through at the weekend. They have about 170, 180 sites.

Then, Ben, there's one or two smaller consolidators in Australia, such as VetCare.

That's correct. VetCentral is supported by Pemba Capital.

It is a smaller fund and have been focused on assets that are really more regional-based as opposed to metro-based. From a competitive tension positioning, I think our reputation from being in the UK and having such a large footprint in the UK, we actually have vendors seeking us out.

When it comes to competitive tension positioning, there is cultural elements that our vendors actually choose us over our competitors because of the way in which we go about how we operate and the clinical offering that we do support.

Thank you, Charles. Charles, you have your hand up.

Thank you. Charles Weston from RBC.

A couple of questions from me, please. Appreciate this has been quite high level and strategic, but if I can have one question on the trading statement: the net debt number of £199 million, I think it was, seemed a little bit higher than I could figure out from the acquisitions and the buybacks, and obviously the EBITDA and the cash conversion.

I was just wondering if there've been any one-offs or working capital changes, perhaps in the second half?

When I think about net debt for the year, we would deliver operating cash conversion of around just over 70%. We have seen an uptick in interest.

We have carried a higher net debt through the year, our interest payments are slightly higher. We have seen an uptick in our tax payments as well.

Outside of that will be the capex investment, acquisition investment. We do have some exceptional costs that have gone through the P&L, largely in relation to the CMA and largely in relation to some of the CMA remedies.

There'll be an element within our cash flow relating to the deferred consideration that the other Charles just mentioned earlier. That will come out.

Then obviously we've had our share buyback, of which we completed a £20 million share buyback at step-up, and then we announced a further £50 million. During the year, we've had a share buyback of over £30 million.

Thank you. Second question: it'd be great to get an understanding of your expectation of kind of self-help contribution to like-for-likes versus consumer.

You painted a picture where I think from whether it's in 2027 or from 2027, there would be this sort of aim to get back to the 4% to 8% level. Clearly, you can't call consumer confidence return.

How much can you generate yourself, self-help, investments, etc., organically, like-for-like, versus relying on the consumer to step back up?

Charles, that's exactly how we're looking at things because, as you say, we can't control the consumer confidence, we can't control the economic outlook, but we can influence things within our business. We are very focused on providing great clinical care, but also recognise the need to be offering an improved client service and helping clients engage with us in a much more digital and frictionless way.

We launched online booking just over a year ago across all our UK companion animal practices. We have a common practice management system now, which is cloud-based, and that gives us a richness of data, and maybe Paul can talk about some of the data analysis we can do and segmentation we can now do.

We are improving our marketing. We now have a joint brand across all of our UK practices.

I guess that was somewhat forced upon us by the CMA process, but actually it does bring benefits to us because we now have CVS plastered outside the majority now of all of our UK animal practices, and every one of our practices will be jointly branded within a few weeks now. That brings benefits because we now have a national brand, we can now do central marketing, we can do central CRM, and drive kind of footfall back into practice ourselves.

Pricing is also another factor, clearly, and as we've said previously, we have been more cautious on price changes over the past 3 years. Now we have CMA certainty.

We have put price changes through this summer. We're not going to give you the number, but we have put higher prices through than we have done in the previous 3 years.

Maybe Paul, you can talk about some of the data capability we now have and the richness of data.

Maybe before I do that, I think probably just to come back to your question around the self-help, it's an oversimplification to consider preventative healthcare to be discretionary and healthcare provided in illness and injury to be fully non-discretionary. Certainly, preventative healthcare would be considered to be discretionary, and there is an element of that work that we need to do to improve footfall around those discretionary spends.

When a pet is ill or injured, much of the decisions that pet owners make, those discretionary decisions about whether to fix a fracture or to amputate, examples I think I've given to lots of you in the past, are based upon the confidence that we can give our clients about the outcomes, the quality of the work that we can do, and the value that brings. Much of that is around communication rather than necessarily just price.

There's a lot of work that we're currently doing about building our colleagues' confidence in how to communicate that. That's the contextualised care element.

Just to sort of remind that actually when a pet is ill or injured, there is discretionary spend within that, and there's a lot we can do around improving that average transaction value, for example, through how our colleagues communicate and the services that we can provide. Then in the background, now that we have Provet and we have all of that wealth of data, we can see, for example, the types of diseases that appear at certain ages in certain breeds, and we can start doing targeted marketing to clients who own a 10-year-old Labrador, we talk about those breeds we were talking about earlier on, at what point would I want to definitely see a Cavalier King Charles Spaniel to do a cardiac check?

Should be ideally reminding them that this would be maybe the most common time for mitral valve disease to appear, and therefore we'd want to see, do a physical examination, listen to the heart, and for a certain percentage of those, we're going to identify evidence of heart disease. That drug I mentioned earlier on, pimobendan, is a life-extending drug, actually it's a great opportunity to provide our clients with that.

I think the Provet data provides for much better access and ability to do targeted marketing, but also to provide clients with the opportunity to extend the health and welfare of their pet and live longer and healthier lives, and our clients love that and our colleagues love that opportunity as well.

Ben mentioned earlier the extent of preventative dentistry that happens in Australia, and that's definitely something we are trying to learn from here in the UK and encouraging our colleagues to develop the skills to be able to provide that, but also hopefully then driving further footfall for more preventative dentistry for animals.

I can just add one additional comment because I think Richard mentioned the fact we want to be more visible digitally, there's increased marketing. I think some of the data is, how do we use our data to also engage with clients that we do have, to remind them of the value of visiting a vet practice, and how do we encourage footfall?

I think Paul also mentioned earlier that we launched our Healthy Pet Club Advanced product. We've talked in the past about Healthy Pet Club, preventative healthcare scheme.

It's annual, pay monthly, you have your half-yearly checkups, vaccinations, flea and worming. We've also recently launched Healthy Pet Club Advanced, which has been quite popular, in that also includes unlimited consultations for those clients.

What we've seen is that if clients come in and they want to come in, they want cover for their animals, and vets have hands on pets, then invariably they'll be able to diagnose issues and address them earlier. I think that is another area where we will drive further footfall and revenue growth.

Thank you.

James.

Hi all. James Bayliss from Berenberg.

Two questions, I think. You made comments about temporarily exceeding the two times net debt to EBITDA leverage ceiling for attractive acquisitions.

Not necessarily looking for numbers here, but given the nature of your presentation, everything looks relatively attractive in the first place. Is that a comment that you would be looking to see even more attractive attributes, or is it more about where there's a certain kind of scale or geography, or how do we think about that?

I guess what we recognise is we can't control the decision point when a vendor decides to sell, and therefore acquisitions are sometimes like buses: three come along at once, etc. We are very confident in the ability to grow through acquisitions in Australia.

We're also confident we will return to UK acquisitions at sensible multiples, and Robin did talk about the multiples we might be willing to pay in the UK, clearly linked to our own share price. Also we know that we delever quickly when we stop investing because we generate cash and we have good levels of operating cash conversion.

If in a short term we had a number of deals coming along at once, we can see ourselves taking leverage slightly above two times, but knowing we will delever quite quickly. That's what that point was about.

I think given our strong operating cash conversion, our expectations around capital investment, acquisition investment, and given our current share buyback program, we may see leverage increase up to two times. We're not currently expecting it to exceed two times.

I think really this is just a nod to flexibility if something then happens that was super accretive that we were keen to do, then we just wanted to mention we are flexible in our approach.

Fine, thanks, very clear. Then second question: if you look at everything you've shown on returns, client Net Promoter Score, everything looks like it's validating the investments you're making in the facilities, the patient care at the practices.

If we think about the rest of the market, perhaps in the UK in terms of the capital constraints on the independent practices or even some of the larger guys with more full balance sheets, does that lead us to believe that all this should come together to suggest you take share because you're able to deliver a better experience and modernise and drive growth, I guess, through your growth capex more so than others? Or is that potentially quite unfair given we have seen market disruption in the short term?

It's a good question. It's a very competitive market in the UK.

We see strong competition in Australia as well, we have to be delivering a great service to our clients and their animals, and we do pride ourselves on that. We have been competing hard for colleagues as well, and obviously the need to recruit and retain and develop and train strong clinicians is at the heart of what we do.

With competition obviously brings opportunities as well, and we are competing hard for clients, for vets and nurses, and we are competing for acquisition opportunities as well. Probably less competition just now than we've seen in the past, and we do need to reset seller expectations as to what multiples they can achieve.

We are having conversations. We are hoping to complete some acquisitions this financial year.

Nothing concrete at the moment, which is clearly why we haven't disclosed anything, but we will compete hard and continue to do so. Thank you, James.

Seb's been very patient, do you want to come to Seb first? Thanks, Kane.

Thanks, Richard. I knew if I waved my hand enough, I'd get somewhere.

Seb Jantet from Panmure Liberum. Just first question, if I can take you back to slide 14, where you set out the relative sizes of the market, and it've always kind of struck me that if you look at the pet population, the UK 37 million and Australia it's 32 million, about a 15% difference.

Yet you're saying the veterinary market size in the UK is 6.7 billion and the veterinary market in Australia is 3.3. Why is it half the size for only 15% pet population difference?

Ben Robin, kick off.

I was just going to say that they are survey data points, and we've included the survey dates that we've included on there. I think one of those populations may also include a volume of birds, for example, that we may not count in the other.

I think whilst Australia have a higher pet propensity, and I'm sure Ben will talk about that, it's not quite correlative, I would say, to market size. Not fully, anyway.

I think my only other comments to that is Australia has one of the most highest pet populations per capita in the world. We were speaking the other day, I myself have three animals.

My next-door neighbour has two. We are very humanised.

We bring our pets into our families as humanisation sort of continues. In terms of that specific question from a density, I would echo Robin's comments that you do have quite a variety of pets within Australia, and you have things from exotics, snakes, birds, etc., but there is a higher proportion of companion animal in there as well.

Maybe if I ask the same question slightly different way round, then: so if I was to go and get my dog castrated in Australia, would it cost me the same, more, or less than it would in the UK?

From a price point perspective, I can't comment, and maybe Paul is more better placed from a comparative perspective. I think pricing across Australia, because of the low consolidation, there isn't consistency across the entire market.

We are a vast country, and you don't see quite probably the levels of consistency from a pricing position, but I'll let Paul comment from a comparative.

It's hard from a like-for-like perspective in terms of the different charges. If you look at things like consultation fees and neutering fees, then I would say, yes, potentially, on average, very mildly above in Australia than compared to the UK.

It's pretty evenly spread, I would say.

Okay. I guess, it's interesting to hear you're saying the ACCC is kind of getting more involved in the market in Australia.

I'm wondering to what extent you're taking some of the learnings from the CMA report and preemptively applying them in Australia to make sure to see off at the pass the ACCC out there?

We absolutely don't want to create a competition issue downstream in Australia. Clearly, with 57 practice sites at the moment, it would be slightly odd if we did have a competition problem.

We absolutely don't. We've, as Robin said, engaged with the ACCC on the odd occasion where we're buying a practice in Sydney, for instance, that's close to another practice we already own.

We know that the regulators tend to talk to each other globally, and the ACCC kind of will probably have been watching what the CMA are doing in the UK. There is a new regime where once you reach a certain turnover threshold, which we are close to reaching, then more deals would have to be routinely referred to the ACCC.

We have had every deal we've spoken to them about approved. We are applying the kind of 30% threshold in the UK and applying that as a loose framework to Australia.

We know that deals have been approved in Australia because it is a public process at above that level of concentration. I'd hope the framework in Australia is more generous than the UK, and maybe the UK framework, the criteria, does kind of loosen in due course.

As part of our discipline, I guess, we're also being disciplined in terms of that approach as well. It's probably

Oh, sorry, can I just very quickly add: just to be clear, the ACCC aren't taking a greater interest in veterinary. It's the regulation for the ACCC in terms of any mergers and acquisition across any industry has changed from the 1st of January.

The reason why I mentioned that we will need to engage the ACCC more regularly is because of our size. Once you reach a certain threshold, it then just becomes mandatory, whether it's veterinary, whether it's dentistry, whether it's any other industry.

When you have revenues over a certain size, and you're acquisitive, you'll have to approach the ACCC. As Richard said, we've been through the process, we've had every single offer or every single engagement signed off by the ACCC.

We know it, we're comfortable with it. It's just another hurdle.

Last question then, just on the UK. You mentioned you've increased your prices.

I guess the benefit of the CMA ruling is now you can see what others are doing to their prices as well. Have you seen similar price increases going through from the other kind of LGVs?

What about the independents? There's definitely been some evidence that they are closing the gap versus kind of the LGVs.

Is your data showing that as well?

As you say, now that more companies are having to publish their data, and this is gradual, not everyone has published their pricing yet, and that volume of price information will kind of increase further from here as everyone has to meet the CMA deadline. Not everyone is publishing at the moment, and I know you've done your own price scraping and looked at how independent practices have increased prices, and the CMA have effectively given the information to do so.

The CMA process clearly may lead to higher costs for consumers. We have certainly put some price changes through this summer, and other veterinary groups, we know, are also doing that, and other independent practices are also increasing prices.

Paul, I don't know if there's anything you'd add in terms of information you see at a kind of local level.

No, I think that's correct, and I think the key is that there is no obligation at the moment to put those prices on. Some have, some haven't, particularly across the independent practices.

Many are waiting until such time as it is enforced for them, and that's based on the CMA remedies, that they have a 3-month longer window in which to publish their prices, and I'm sure they'll be keeping a close eye on things.

Thank you, Seb. Kane, I know you had your hand up, we'll go to you next and then Andrew.

Thank you. Kane Slutzkin, Deutsche.

Just coming back to the two times question on leverage. I noticed in the pres you mentioned New Zealand.

Is that just a sort of natural extension of Australia, or is it a sort of greater ambition to kind of keep going geographically?

You might want to explain how Australians think of that market.

I'll say it tongue-in-cheek. It's just another state of Australia, right?

No, in all seriousness, it's a natural extension of Australia in terms of market. There is a lot of synergies that can be seen by entering that market when the time permits and when it makes sense.

If you look at from a regulatory and legislation basis, there is a significant amount of employment legislation and other regulatory legislation that is modelled off the Australian base for New Zealand. A lot of healthcare businesses, a lot of businesses within Australia and New Zealand actually cross the Tasman to be able to continue to operate because it does make sense.

I will also add, from an eastern state basis, it's quicker to get to New Zealand than it is to get to the other side of Australia. From a operational execution and ability to manage those practices, it does make sense if and when.

Thanks. Just slide six, looking at the 4% to 8% chart you've got here.

I'm just sort of confirming: is that now a reset, we're coming back to that target as official? Because you've kind of had it out there.

Is this from '27, or is that how we should think about it?

We held our Capital Markets Day back in November '22. We've referenced some of that and some of the material today.

Our ambition is absolutely to get back to that level of growth. We're not there yet, and the current economic backdrop is clearly quite challenging, and therefore we can't say we'll be back at that 6% level in this current financial year.

We have seen higher price changes this summer. There is an element of self-help.

We've seen Australia improve its performance. We've seen Animed Direct grow in the second half of the past financial year, and we're confident with some of the changes that Robin mentioned that we can see further growth this coming year.

We have a consensus for this current year which we are comfortable with, which also implies higher like-for-like growth than we achieved last year. None of that is easy, and we're not giving a forecast, but we are confident in our ability to return to that level.

Great. I'm sorry to nitpick, but on that same slide, you say 19% to 23% margins.

Is that slightly different to "we will be 19% to 23%"? Is that the plan?

We said in the Capital Markets Day in 2022 that we expected margins to gradually improve from 19% to 23%. We delivered 20% in the previous year, 20% roughly this past year, and that's against inflationary pressures that we weren't really expecting back in November '22.

We've obviously seen the National Insurance increases, we've seen utilities costs increase because of various conflicts, and we've seen significant salary inflation from national minimum wage and national living wage increases. If it wasn't for those inflationary pressures, we would already be delivering margins in excess of the 20% level.

Australia is margin accretive given the acquisitions we're acquiring. Our laboratory business is margin accretive.

We have sold the crematoria business since that Capital Markets Day, and the crematoria business did deliver 30% plus EBITDA margins. We are growing online retail, which is obviously less than 10% margin.

There's a mixed element as well. We are working hard to maintain margins in the current pressures, and clearly with increased like-for-like growth, we would hope margins will also improve.

Thanks. Sorry, just one last one.

Sorry, Andrew. Just on the labs in the UK, could you just talk to us how pivotal they are in sort of the framework of the practices?

I know obviously last year I wrote about this, if you recall. I just want to double-check again, see if anything's changed there.

Is it something you would be looking to potentially kind of offload at some point in terms of raising some significant firepower to perhaps hit to Oz?

Our laboratory business are integrated to our practices, and I'll get Paul to expand on that in a second. We also provide our services to other practices in the UK.

We've seen growth in our laboratory business this past year, both in the volumes and ATVs they're receiving from our own practices, but also growth in the number of third-party practices we serve, and also the revenues and volumes that we're driving through. I think that comes back to partly the resilience of the sector.

Clearly, we have been impacted by the economic backdrop and we saw weaker like-for-like growth in the final quarter. When animals get ill or injured, clients invariably want to treat them and invariably want to spend money to get them better.

Most of our lab work and tests and analysis, I guess, is done for those ill or injured animals. That correlates with strong demand in that sense.

We recognise there's weaker demand in some of the more preventative, more discretionary areas. Paul, maybe you can just touch on the integration and how, I guess, you benefit as a clinician from our own.

I think it's probably worth looking at two different parts: one is our in-house laboratory analysers, and then the other is the reference laboratory. One being tests that are run in-house in the practice by analysers that we provide.

The importance of that is that provided internally, it gives confidence they've been through the right governance process, they can rely upon the results, and they know they're going to get the adequate support. We do provide really, really high-quality analysers for them on biochemistry, haematology, for example.

That really improves our ability to deal with particularly emergency cases. Then the other part is the reference laboratory, which is where samples would be sent externally.

Unlike the crems, there is a clinical provision element within the laboratory, we have a number of clinicians working in the laboratories which provide advice to our colleagues around outcomes of those results. It's a much more integrated part of the business, and certainly provides lots of support around our R&D, antimicrobial stewardship, for example.

It's certainly beneficial from our colleagues' perspective.

Thank you, Kane. Andrew.

Hi, it's Andrew from Peel Hunt. Two questions, please.

Just one on market and one on yourselves. If I could take Paul back to Poppy the Cavapoo.

The graph that you showed, is the scale on the y-axis, is that to scale? Because if you look at it, sort of the cost associated with the neutering versus some of those treatments you mentioned at the end of life, I would guess it's much more expensive at the end of life.

Is that the right way to think, or bearing in mind we've got a pandemic bolus coming through, how should we think about spending on the dogs that are coming or the animals that are coming through?

Robin's itching to jump in.

I'm hoping it's illustrative on that slide, given that I pulled it together, it's meant to be illustrative, Andrew, you're right.

It's illustrative because even if you take that cardiac case, right, it depends upon what happens. You might get a lucky Cavi who gets a heart murmur and dies from a condition at 14 years old completely unrelated to its cardiac disease and never goes into heart failure.

I think the key is to say that the curve, rather than the bar chart, will be your average. You take the average, it will look approximately like that.

Some dogs will get away with any additional spend in their senior years at all if they're super healthy, and some will be spending a very significant portion in their first 2 or 3 years, particularly if they have a fracture or have an immune-mediated disease, which commonly affects younger dogs. Very much illustrative, but it gives you a bit of a perspective around, for example, that dog might have had, as I say, X-rays, lifelong medication on certain occasions, and a number of hospitalisation events.

It could have been more unlucky than that and needed to have a heart valve replacement, which by the way we also do at Bristol Vet Specialists these days.

It's actually sort of a mixed thing, because most animals will go through a neutering thing, but at the end of life, so that scale, it looked like it was double, that might not be wildly out of kilter. Is that one way to think?

It'll be because it'll be probability adjusted, but yeah, not wildly.

Thank you. Then the other one is just on the IRR associated with the capex options that you've got.

It's clearly different IRRs available, but I'm assuming you can't neglect one bucket, right, in order to make the business work for the longer term. How much flex have you got in deciding where to put your cash, right?

Is it entirely discretionary and you can sort of completely step back from investing in practices and go and do more acquisitions, or you've always got to invest some in the practices? Is that a consideration that you think about?

I think, as we've said, we have a level of maintenance capex that frankly we have to do, and we think that's been growing yeah, slightly, but around about £12 million per annum. The rest is in essence discretionary, and that could be across those kind of three areas.

Technology investment tends to be lower than property investment by its very nature, but there will, I think, still be a need for some tech investment. Even though we've got a strong platform, we recognise to provide a better client service, we need to invest a bit more to improve that proposition.

Practice facilities, we're through the worse of that investment. We've improved, as Paul said and showed that chart, the average quality of our estate is much improved now than where it was.

Still some outliers, and we'd like to improve some of those further sites, but we don't need to rush to do that now. There is quite a lot of discretion and choice.

We're in a good position, I guess. We've got, yeah, a business that's got a strong balance sheet, capital to deploy, and there are options.

I think, as Robin said, those options, including returning cash to shareholders, need to be evaluated at any point in time, and we will choose the most accretive ones.

Super.

Thank you. Sahil.

Thanks, Richard. Most of my questions have been asked.

Just two from me. Coming back to Australia, it'd be interesting to get a bit more colour around the buying synergies that you referenced in the RNS today and the opportunity going forward.

Is my first question, and probably deal with that first. Yeah.

I guess the obvious synergies that come with increased scale are buying synergies. In the UK, we've obviously accessed those for a number of years.

The way we've gone about that is we tend to buy drugs from a chosen wholesaler, we concentrate our spend with one wholesaler. Then we also have clinically led, Paul's team decide from a clinical sense which are the drugs we should be using, because there's choice in many procedures.

We have what we call a dedicated and preferred drugs list, which means we concentrate our buying power with a reduced number of drugs that we recommend our practices use from a clinical sense, and then we go into bat commercially. We work to what we call net-net prices, and they are net of the wholesaler discount, and obviously volume helps negotiate those discounts, and net of the rebate we then negotiate from the manufacturer.

When we entered Australia, the practices we started acquiring were using probably one of two major wholesalers: a company called Lyppard and a company called Provet that was owned by Covetrus. We got our clinicians together, this is before Ben arrived, but we got our clinicians together at the time, and Paul took them on a journey with our procurement team in them deciding collectively which wholesaler they would prefer us to consolidate with, because we've said to them all, they've all got financial skin in the game, it makes sense for us to have one preferred nationwide wholesaler, and they chose Lyppard.

We are now buying our drugs in Australia from Lyppard, and that means we are negotiating improved discounts based on the volume, and as those volumes grow, our ability to negotiate obviously improves. From a manufacturer sense, we're buying drugs in Australia from the same manufacturers we are in the UK.

There are other global manufacturers like MSD and Elanco and all the others. Initially we had resistance from local Australia MDs not wanting to give us volume rebates because they didn't really care what we're buying in the UK.

We're trying to, and have with some success, broken down some of those objections, and we've said to the likes of MSD, "We don't care where you give us discount, whether it's more in the UK or discount in Australia. We want a better group return and discount for the scale that we're buying from you."

We've slowly seen some success there. Then we've also clinically thought about, well, okay, we don't have crematoria, we don't have laboratories in Australia, but we can use our scale to bring our purchasing power together and have preferred suppliers.

Maybe, Paul, you can take up the baton, and Ben, feel free to add anything further.

I was going to pass to Ben in a minute because he now sits with the CAC. One of the early things we needed to do was to establish our Clinical Advisory Committee.

The reason for that is that our colleagues are very willing to use dedicated suppliers, dedicated products, if they have the confidence that they have been assessed from a clinical perspective and the evidence has been used to ensure that they're not going to be breaching their professional ethical responsibilities in using those. It's not about breaking autonomy.

They have the choice, but they want the confidence that actually what we're advising them to use doesn't bring them any challenges. By having a Clinical Advisory Committee that they rely on, that they value and respect, it actually means that they have real confidence.

When we say, "Look, this drug can be on the dedicated and preferred list," they can now go and see how that process has taken place. They can see who's had the conversation, where the advice has been got from.

That does mean that then we see better compliance on our dedicated and preferred. From a laboratory perspective, again, it's down to in-house analysers: are they going to be able to run the tests that they want to be able to run?

Actually, we have different diseases in the UK and Australia. It's really important we get the Australian clinical perspective on that to ensure that actually we're not making choices from the UK that don't apply.

There are definitely certain things that like to bite and kill you in Australia that don't do so in the UK, that are really important, and that affects even things like anti-parasitics. We don't get tick paralysis in the UK, but we do very commonly in parts of Australia.

Ben, your feedback on the CAC?

There's probably two comments I'll make. From a CAC perspective, it is made up of clinic colleagues, and the longer that group continues to mature, the more effective they become in terms of their own ability to operate and also influence the wider profession and the wider group as we continue to grow.

The second component I'd add in is, in a lot of cases when we're acquiring, there are still some contractual obligations from a supplier position, and I'll give you pathology would be one. As soon as that contractual obligation is finished, we're moving into a much better preferred supplier arrangement based upon what the CAC has agreed to, and therefore we actually see our gross margin improvements continue to grow.

Just one final one from me. Don't know if this is for you, Richard, or Robin, but slide 19, the ROCE on the UK acquisitions for acquisitions made 3 years or 4 years old are comfortably below your hurdle rate.

Is that just a function of the prices you've based, or the macro, or what's going wrong with those two cohorts?

We paid around a 10 times EBITDA multiple for those practices, which clearly we wouldn't pay in the current scenario given where our share price is. They are still relatively early in their journey, and they will improve returns over time, we're very confident they'll be accretive.

Also, though, we have obviously suffered from a CMA process, from cost of living pressures, and we've seen like-for-like growth in the UK weaker, and we've had less pricing power than we've probably assumed in the business cases. We are very confident we will improve those returns, and they will be accretive over time.

Also, made fewer acquisitions in those cohorts as well, yeah. I would expect them to improve over time.

As a cohort of acquisition opportunities, they're performing well, and we see good opportunities to enter back into the UK market. I think, as we said earlier, we expect multiples to come down.

We know the UK market very well, and, despite even the macroeconomic environment, we do see potential value in acquisitions in the UK.

Thanks, Sahill. Andrew.

Thank you. Andrew from Peel Hunt.

Just a couple for me if I can. Care mix has been a pretty important factor in both like-for-likes and margins over the last few years, and you mentioned age being important going forward.

I wondered if there's any other factors that are important as well as that going forward. I'm thinking whether it be breed preference or UK clinical capabilities, etc., that you're factoring into your numbers.

I don't think we've got any evidence of a significant shift in breed preference that would be impactful on that. I think we do recognise that COVID cohort, there was a lot of -oodles in there of some sort, and that hybrid vigour does tend to extend life.

It doesn't necessarily reduce the incidence of disease, but it might stray it out into a later age range. I think time will tell for that, but I don't think we see a big shift in that.

Some of the shifts that we might see coming up in the future is the change in renters' rights, which means that now it's much harder, it's not impossible, but it's much harder for a landlord to say no to somebody owning a pet. We may well see a shift there, and of course if that influences the size of the animal that you wish to have, if you live in a flat, a rented flat versus a house, we might see some shifts with that.

Overall, no, I don't think so.

Thank you. Secondly, just on preventative care, you've mentioned that's a bit of a focus in the UK going forwards given what you've seen in Australia and how good they are at that.

Have you been able to quantify the sort of the uplift on lifetime, I guess the lifetime revenue opportunity within an animal? Quite crudely, but have you been able to quantify what that uplift could be for yourselves if you're able to?

When we've spoken about preventative care in Australia, we were specifically talking about the dental aspects of that. Obviously, much of what we do is preventative, and the Healthy Pet Club offering, the regular flea and worming and vaccinations is all preventative by its nature.

In Australia, we've certainly learned that practices do a higher proportion of preventative dentistry. More complex than human dentistry, because clearly we will sit still and be compliant.

For an animal, you have to sedate or, in some times, anaesthetise the animal for that procedure to happen, there's more cost naturally involved. I think the Australian vets have become much more confident and clients are much more expecting to be kind of bringing their pets in for preventative dentistry.

We haven't shared the kind of the revenue upside or the margin upside, but it is clearly accretive. Ben, the delivery of that care is also different potentially, and probably allows our nurses in Australia to play a much more active role.

Exactly right. I spoke earlier around the importance of clinical development, and that doesn't only just relate to vets, that equally relates to nurses.

Nurses being able to get actively involved in dentistry work is actually a really fulfilling part of their role, and actually provides a lot more scope of practice for them, which then has a compound effect of being able to retain better talent, and so on and so forth.

It's worth probably just adding also in regards to that healthcare, the preventative healthcare, you can focus on individual parts of that, and you could give some estimates. What's really important, if you look at HPCA, the Healthy Pet Club Advanced, one of the real benefits of that is ensuring that clients feel like they can come to us whenever they need us for advice, and it doesn't incur an additional cost for them.

The Association of Animal Hospitals in America published it was a few years ago the frequency with which owners presenting what appears to them to be a healthy senior pet, what percentage of those animals actually have a disease process that requires discussion. Just physical examination and history will pick that up in about 60% of senior pets that are presented otherwise assumed to be healthy.

Now that might be arthritis, it might be dental disease. There's a real clear reason that we want to be seeing those otherwise healthy pets to be presented for preventative healthcare, because we will have an opportunity to identify underdiagnosed disease.

From our colleagues' perspective, that's excellent for animal welfare. From our clients' perspective, they get to intervene in the early stages and hopefully delay the onset of disease, but it also does mean that we are the port of call for those owners when they need help.

I think that's critical, and that's why the HPCA, I think, is a real benefit for us looking forwards.

That's really interesting. Thank you.

Thanks, Andrew. Conscious of time.

I know we have some investors' questions from the call, but we will respond to all of those via email, thank you for those who have submitted questions. I'd like to finish by thanking you all, first of all, for attending here today, and for everyone who's dialled in.

As a recap, I guess, as we've discussed, the sector is very strong, there are some really strong fundamentals. We are in a good position within the sector.

We've got a strong platform, we've got capital to deploy, and we have an excellent team of people. We have a disciplined approach to capital allocation.

We have options. We are getting good returns, and we are confident in improving those returns going forward.

We're confident in our ability to grow, and we look forward to sharing further success in due course. I'd like to finish, though: we are a people business, and I'd like to take this opportunity to thank all of our colleagues, some of whom are here today, but thank all our colleagues for everything they do for our clients and their animals, and the outstanding care they provide.

Appreciate your support. Thank you.

Hopefully this has been a helpful update. Thank you.