Analysis from market researchers Plimsoll Publishing finds 74 of the top 500 UK veterinary practices are now at a high financial risk. However, 45 are operating debt free.
A “widening gap” is developing between veterinary practices making outstanding profits and those losing money, it has been claimed.
According to market researchers Plimsoll Publishing in its newest report on the profession, average profit margins at the UK’s top 500 practices have fallen to 6.4% of sales, while 151 of them are running at a loss. However, it was also found that 61 businesses were making record profits.
In the 61 “rich” companies, which means they have scored the highest in Plimsoll’s analysis, findings included:
- average profit margin at 16.31% – way above the industry average;
- 45 of the firms operating completely debt free; and
- average sales per employee at £73,700.
Meanwhile, in the 151 “poor” companies, which have scored the lowest rating, it was found that:
- 74 companies were now considered to be a high financial risk;
- for 70 of them, this is the second year in a row of making a loss; and
- firms are losing 2% on sales on average, meaning for every £1 of sales, it is costing £1.02 to deliver.
Senior analyst at Plimsoll David Pattison said: “The analysis highlights that the industry is being split into two types of company and the gap between the rich and the poor is getting bigger and bigger. For the companies that are falling behind, they need to re-evaluate their strategy and retain profit to improve their financial strength.”
On the rich companies, he said: “[The] successful companies should be proud of their achievements. In an industry not known for its successes, these businesses should act as benchmarks to the rest of the industry showing what can be achieved.”
Plimsoll’s analysis provides an individual profile of each of the UK’s top 500 veterinary surgeons and practitioners. It also contains an overall financial rating, a valuation and an acquisition attractiveness assessment for each company.
Telephone 01642 626419 if you wish to order a copy of the report. Vetsonline readers can get a £50 discount off the report by quoting reference PR/AA54.