First Day of Dealings

CVS Group plc
10 October 2007


For Immediate Release                                           10 October 2007



   NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES, CANADA,

                               JAPAN OR AUSTRALIA



                                 CVS Group plc

                    ('CVS' or 'the Company' or 'the Group')





      First Day of Dealings on the AIM market of the London Stock Exchange



CVS (AIM: CVSG), one of the UK's leading providers of veterinary services,
announces that its  ordinary shares have been admitted to trading on AIM
following its successful Placing to raise £92.7million led by Panmure Gordon &
Co.  CVS' ticker symbol is CVSG.



Highlights



  • The Placing, associated with CVS' admission to AIM, of 45,205,800 shares
    (representing 87.7% of the Company's issued share capital) at 205 pence per
    share, raises £92.7 million for Selling Shareholders, valuing the whole of
    CVS at £105.7 million.



  • The Placing was comfortably over-subscribed, with high quality demand at
    the Placing Price.



  • The purpose of the flotation is to raise the public profile of the Group,
    to help drive new business and to increase awareness of the Group within the
    veterinary profession. It has also provided an opportunity for Nash Sells
    Limited Partnership II, a fund managed by Sovereign Capital Partners LLP, to
    realise its investment after eight years of support.



  • The Company's three recently appointed non-executive directors have agreed
    to buy a total of £100,000 worth of shares at the Placing price.



  • The current management team of Simon Innes, Chief Executive since 2004,
    and Paul Coxon, Finance Director since 2003,  has increased sales from
    £12.8m in 2005 to £39.0m in 2007 (year end 30 June), a compound annual
    growth rate ('CAGR') of 75%. EBITDA has increased from £1.3m to £5.1m over
    the same period, a CAGR of 98%.



  • CVS was established in August 1999, with financial backing from funds
    managed by Sovereign Capital Partners LLP, to acquire and operate veterinary
    practices which were well established within their local community and had a
    reputation for high quality service.



  • Based in Diss, Norfolk, the Group operates two divisions: the practice
    division composed of 45 small animal practices and one equine specialist
    practice (128 individual surgeries throughout the UK) and the diagnostic
    division made up of three veterinary diagnostic laboratories which provide
    services to CVS and to third parties.



  • CVS currently employs 1,214 staff, including 271 vets, as well as using
    additional locums, and is the largest national consolidator of veterinary
    practices.











Commenting on the start of trading of CVS' shares on AIM, Simon Innes, Chief
Executive of CVS, said:



'The company's admission to the London AIM market and commencement of dealings
is a significant step for CVS. Our business has been built by a strong team of
dedicated professionals who ensure both quality and reputation result in CVS
being highly regarded within the sector.



Becoming a public company is a natural progression for us raising our corporate
profile and securing our continued success in both acquisitive and organic
growth.



I am delighted with the response from investors and look forward to engaging
with the investment community as a quoted company.'



For further information contact:


CVS Group plc

Simon Innes, Chief Executive                                   01379 644 288
Paul Coxon, Finance Director

Panmure Gordon (Nominated Adviser and Broker)                  020 7459 3600
Richard Gray
Andrew Godber
Chris Bucknall

Buchanan Communications                                        020 7466 5000
Richard Oldworth
Suzanne Brocks

Sovereign Capital                                              020 7828 6944
Kevin Whittle



The information required by Rule 26 of the AIM Rules for Companies (February
2007) is available under the heading AIM Rule 26 within the Investors/Financials
section of the Company's website at www.cvsgroupplc.com.





PLACING STATISTICS


Placing Price                                     205 pence per share

Number of Ordinary Shares placed on 
behalf of Selling Shareholders                    45,205,800

Number of Ordinary Shares in issue 
immediately following Admission                   51,563,475

Market capitalisation of the Company 
at the Placing Price                              £105.7 million

Net proceeds of the Placing to be 
received by Selling Shareholders                  £89.5 million

ISIN                                              GB00B2863827

AIM symbol                                        CSVG





Notes to Editors





Introduction

CVS is one of the leading veterinary service providers in the UK, operating 45
veterinary practices (consisting of 128 individual surgeries) nationwide and
three veterinary diagnostic laboratories. It is the UK's largest employer of
vets with 271 employed, representing 2.2 per cent. of all vets estimated to be
registered and practising in the UK. CVS was founded in 1999 with financial
backing from funds managed by Sovereign Capital Partners LLP with the objective
of consolidating the fragmented UK veterinary services market, and has completed
acquisitions for consideration of approximately £32.1 million to date.


Business Description

The CVS business model is to offer to owner-vets operating under a partnership
structure the chance to realise the value of their asset in a market where
demographic and other changes are creating a situation whereby new younger vets
are now no longer able or inclined to buy into partnerships themselves. The CVS
structure offers to remove the administrative burden from the veterinary
practices it acquires through the provision of central services such as finance,
human resources, marketing, health and safety, information technology and
purchasing, allowing the practice to concentrate on the provision of clinical
care.

CVS now operates 128 surgeries which were acquired in the following periods.


                     July 99 -    July 04 -   July 05 -    July 06 -   July 07 -
                     June 04      June 05     June 06      June 07     present
Surgeries Acquired        17           12          30           62           7



CVS has also acquired three veterinary diagnostic laboratories, which provide
laboratory services to CVS practices and to third parties. The laboratory
services represent a key saving and growth opportunity to the Group as
additional acquired practices drive incremental diagnostic revenues through the
CVS laboratories. Further scale benefits are accessed through the ability to
obtain favourable terms from suppliers and wholesalers of veterinary supplies,
intra-Group referrals and the operational leverage that the centralised
administration structure brings to the Group as it continues to grow.



Investment Highlights



1. Leading market position

CVS operates 128 individual surgeries across the UK, which is more than twice
the number operated by the nearest competitor. The Directors believe that the
Group has built a reputation in the veterinary profession as the leading
national consolidator, without sacrificing its reputation for working alongside
the profession as a consolidator and not as a predatory competitor.


2. Nationwide Infrastructure

CVS's nationwide network of 128 veterinary surgeries is capable of significant
operational leverage. Efficiency is improved as more administrative services can
be delivered by the head office. Scale also brings benefits in the buying of
drugs and equipment.


3. Organic profit growth

CVS (UK) Limited has demonstrated the ability to extract organic profit growth
from the practices it acquires in the post-acquisition period, over and above
the profit growth attributable to the immediate contribution of those
acquisitions. This is driven by scale efficiencies, operational leverage,
pricing management, collective buying power, and growth in the underlying market
for veterinary care.


4. Growth through acquisition

Consolidation in the UK veterinary market is being driven by demographic changes
in the profession which are creating an opportunity to acquire more practices as
the industry moves from a fragmented partnership structure towards a more
corporate-owned structure. CVS has made 40 separate acquisitions and is
therefore well proven in its ability to assess the attractiveness of potential
new acquisitions and successfully integrate and operate them thereafter.



5. Financially robust

The CVS business model is highly cash generative, with the last three financial
years of trading each benefiting from cash generation through working capital as
a result of strong cash receipts at the point of sale, favourable credit terms
with suppliers and low levels of stock. In addition, property rental costs are
low at under 5 per cent. of revenues, and capital expenditure is also relatively
low. No new money has been raised on Admission through the sale of shares. The
Directors anticipate that the acquisition pipeline will be adequately funded
through a combination of debt finance and internally generated cash flows.









                      This information is provided by RNS
            The company news service from the London Stock Exchange