TIDMPVG
RNS Number : 0090K
Premier Veterinary Group PLC
16 September 2016
PREMIER VETERINARY GROUP plc
("PVG" or "the Company")
US EXPANSION UPDATE AND ISSUE OF LOAN NOTES
London, UK, 16 September 2016 - Premier Veterinary Group plc
(LSE: PVG) provides an update on its expansion into the US and
announces the issue of Loan Notes to fund the acceleration of this
strategy.
In May this year, the Company announced the commencement of its
expansion into the US for its preventative healthcare program for
pets branded Premier Pet Care Plan ("PPCP") with the appointment of
two Regional Sales Directors, based out of Atlanta, Georgia and
Charlotte, North Carolina, and the recruitment of two
launching/training staff.
In early June, the Company announced that it had signed a major
agreement with Veterinary Products, Inc. ("VPI"), a significant
veterinary distributor co-op, headquartered in Atlanta, Georgia, US
to promote and rollout the Company's PPCP to VPI's member hospitals
numbering over 600 across 15 States, located primarily in the South
East of the US.
At the end of June, the Company issued a further announcement
confirming that it had signed another major agreement in the US for
PPCP. That agreement was entered into with Merritt Veterinary
Supplies Inc. ("MVS"), a leading veterinary supplies distributor
founded in 1938, which has 9,000 member hospitals in the south east
of the US. MVS is headquartered in Columbia, South Carolina.
Recruitment of the product launch and training team was quickly
commenced to service this substantial account, to be supported by
MVS' internal 42-strong sales team.
As previously indicated, the Company had planned for a
methodical build-up of its presence in the US with the appointment
of additional sales and training personnel to support the product
in due course. However, the rapid rate of expansion into the US has
greatly surpassed the Company's expectations and, in order to
capitalise on the high level of interest that has been shown to
date in the take-up of PPCP, further trainers will need to be
recruited in the US much sooner than had originally been predicted.
The Company's US subsidiary, Premier Vet Alliance LLC, already
employs eight staff in the US and it is envisaged that a further
resource will need to be recruited to handle the higher than
anticipated level of hospital launches.
As at 15 September 2016 agreements have been signed with 29
hospitals in the US, with 5 hospitals launched to date. The Company
has also commenced the collection of recurring payments in relation
to the first pets on plan. The available market for preventative
healthcare programs for pets across the US is estimated at 70
million dogs and 74 million cats (U.S. Pet Ownership &
Demographics Sourcebook 2012).
Over the past two years, the Company has invested heavily in the
development of its bespoke software system to facilitate the
worldwide operation of PPCP, and the Company is pleased to report
that this software is now fully functioning and operating to
specification in Europe and the United States.
The directors have looked at a number of strategies for
financing the Company's continued expansion in the US while
avoiding dilution for existing shareholders and have concluded that
debt funding provides the most appropriate solution for the
Company. On that basis, the Company has agreed terms for an
aggregate issue of GBP1.25m of unsecured Loan Notes to existing and
new investors in the Company split as follows:
External third parties: GBP600,000
Juliet Thompson, a Non-Executive Director and Chairman of the Company: GBP100,000
Timothy Thompson, Mrs Thompson's spouse: GBP200,000
Bybrook Finance Solutions Limited (of which Rajan Uppal,
an Executive Director of the Company, is sole director and shareholder): GBP350,000
The first tranche of Loan Notes totalling GBP900,000 will be
issued immediately, with a further tranche from Bybrook Finance
Solutions Limited with a value of GBP350,000 irrevocably committed
for draw down by the end of the year. The Loan Notes mature after
18 months, and with a maximum total associated cost of GBP225,000
(equating to 12% interest). The Company has the right to repay the
Loan Notes in full or in part before maturity. Early repayment
would result in a minimum of nine months' interest being paid to
the Loan Note holders, pro-rated in respect of investments made
subsequent to the date of receipt of the first tranche. The Loan
Notes are not capable of being converted into new ordinary shares
in the Company.
In addition, the Company is in discussions with HSBC to put in
place an overdraft facility to supplement further the working
capital as the Company seeks to maximise the benefits of the US
expansion opportunity.
Dominic Tonner, Chief Executive Officer of PVG, commented:
"Our detailed and lengthy research into the US market identified
a clear and very significant opportunity for growth, starting in
the south east of the country. Recently won contracts with industry
majors in the veterinary distribution channels have accelerated our
initial progress beyond our early expectations. We are now gearing
up for more rapid rollout and expansion led by our very experienced
local and central management teams."
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
For further information, please contact:
Premier Veterinary Group plc Tel: +44 (0)117 970 4130
Dominic Tonner, Chief Executive Officer
Daniel Smith, Chief Financial Officer
Zeus Capital Limited Tel: +44 (0)203 829 5000
Giles Balleny, Director, Corporate Finance
Hugh Kingsmill Moore, Director, Sales
Square1 Consulting Tel: +44 (0)207 929 5599
David Bick/Brian Alexander
Note to Editors:
PVG's services to third party veterinary practices, through its
wholly-owned subsidiary Premier Vet Alliance Limited ("PVA"),
include the administration and support of a preventative healthcare
program for pets branded "Premier Pet Care Plan" ("PPCP"); and the
operation of a buying group (the "PVA Buying Group") in the UK and
Ireland, which offers enhanced discounts to member practices on
pharmaceutical and consumable spending. PPCP is branded as
"Huisdieren Zorg Plan" ("HZP") in the Netherlands and, in the US,
PPCP is marketed through the Company's wholly-owned subsidiary,
Premier Vet Alliance (US) Limited.
PPCP is a structured, preventative healthcare program for cats,
dogs and rabbits and is available only through veterinary
practices. The program is seen as a way of providing gold standard
care for pets at an affordable price for the client, by way of
fixed monthly payments.
PPCP uses a clinical approach to prevention, as this is the most
effective method of ensuring illnesses are diagnosed more quickly
and not given a chance to advance. What truly sets PPCP apart is
its unique approach of offering an end-to-end solution and support
to the practice, which has been proven to work extremely well. PVA
works alongside practices to create a tailor-made, cost-effective
service for clients, one that delivers excellent care to their
patients and significantly improves practice performance.
The PVA Buying Group, is now the UK's largest veterinary buying
group without group interests in veterinary practices or veterinary
wholesalers offering its members some of the best discounts across
the industry on pharmaceutical and consumable spend.
For further details: http://www.premiervetalliance.co.uk/
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, and any statements preceded by,
followed by or that include forward-looking terminology such as the
words "targets", "believes", "estimates", "expects", "aims",
"intends", "will", "can", "may", "anticipates", "would", "should",
"could" or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statements are based. As a result
of these factors, readers are cautioned not to rely on any
forward-looking statement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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