CVS Group (AIM:CVSG) has launched a £50 million share buyback after refinancing its banking facilities as the veterinary chain stepped up expansion plans in Australia following the end of a lengthy UK competition probe.
The FTSE 250-listed group said it had refinanced its £350 million debt facilities on improved terms, extending maturities to May 2030 and lowering borrowing margins by 20 basis points. The new facilities include a £125 million term loan and a £225 million revolving credit facility.
The refinancing was said to provide greater “flexibility and firepower” to pursue acquisitions, invest in clinics and return surplus cash to shareholders.
The company also announced the acquisition of a small animal practice in Sydney for A$8.2 million (£4.4 million) and said contracts had been signed for another Australian acquisition worth A$3.2 million. #
CVS said it expects to spend about £50 million a year on acquisitions in Australia.
The buyback comes after CVS moved from AIM to London's main market, but also follows pressure on the share price from wider market volatility and political uncertainty in the UK.
Chief executive Richard Fairman, who in March gave notice of his retirement, said the refinancing "provides additional flexibility and firepower to launch a meaningful share buyback programme.
"We look forward to updating investors at the time of our Full Year trading update on how this approach underpins the delivery of shareholder returns."
The group said it remained committed to keeping leverage below two times net debt to EBITDA, although it could temporarily exceed that level for “attractive acquisitions”.
The board is "making progress, although at early stages," on identifying Fairman's successor.