A major veterinary group has claimed it is likely to face millions of pounds in additional costs because of planned increases in national insurance contributions.

The warning was delivered in an update to shareholders issued by the CVS Group ahead of its annual meeting today (20 November).

But the company also predicted that continuing expansion into the Australian market would help to mitigate the impact of the measures.

The update, issued earlier this morning, reported a 7.6% increase in group sales during the four months to the end of October compared with the previous year.

However, like-for-like sales were said to be flat as a result of “soft demand” within the UK.

‘Good progress’

The group said it was also making “good progress” with its expansion plans in Australia, having completed its latest acquisition earlier this week, and now runs 25 practices there.

It added: “While the board remains mindful of headwinds in the UK, the fundamental need for high-quality veterinary care remains strong, the expansion into Australia is progressing well and CVS remains well positioned to deliver attractive growth in shareholder value over the medium term.

“The recently announced UK Government budget changes will result in a significant increase in employment costs with effect from April 2025.

“While these increases will only apply in the final quarter of this financial year, the annualised impact to the year ending 30 June 2026 is estimated to be £8 million from the national insurance scheme changes.

“The group expects to substantially mitigate these through growth, efficiencies and purchasing synergies in Australia.”

Market expectations

The statement added that the board remained confident in the group’s ability to deliver full-year 2025 results in line with market expectations.

The group’s caution around increased costs follows calls from both the VMG and SPVS for veterinary business leaders to plan now before the changes are implemented.

Although the Government insists the measures are necessary, both groups warned they were likely to force bosses to make difficult decisions around areas including pay and recruitment.