JANUARY 2023
SPVS – Hazlewoods’ Profitability Survey
SPVS – Hazlewoods’ Profitability Survey / January 2023 1 1. Background....................................................................................................2 2. Financial results 3 3. Optimism check-in.........................................................................................9 Contents
• The veterinary sector has seen significant change over the past few years. Increased demand, Covid, staffing shortages and more have brought their own challenges. Despite these, many practices have reported strong profits. It is against this backdrop that we launched this profitability survey.
• The challenges have led to slightly lower than hoped for numbers of survey participants at 35 in total, although we are still able to report meaningful results.
• Practices provided information from their most recent set of accounts and from their PMS.
• As well as questions relating to profitability, practices were also asked to consider their optimism for both the future of the veterinary sector and their own practice.
• What follows here is a headline summary of results.
• Keen for more insight?
o SPVS members will soon be receiving supporting commentary to this headline summary and further analysis on the differences in the results between Small Animal, Farm and Equine.
o Whether you are an existing SPVS member or not, Hazlewoods and SPVS would also be pleased to talk through any questions you may have.
o Of course, historic and current performance does not guarantee the future. SPVS and Hazlewoods remain committed to supporting the veterinary sector closely as we all navigate the current recession.
35, with all but 2 being vast majority first opinion
SPVS – Hazlewoods’ Profitability Survey / January 2023 2
Survey
Mix of work: Number of practices with Small Animal work, of which: Small Animal only Small Animal and other work 23 17 6 Number of practices with Farm work, of which: Farm only Farm and other work 6 1 5 Number of practices with Equine work, of which: Equine only Equine and other work 7 1 6
participants:
1. Background
2. Financial results
SPVS – Hazlewoods’ Profitability Survey / January 2023 3 Financial structure struct Turnover most recent financial year 17.0% 20.0% 31.0% 26.0% 3.0% 3.0% £0 - £499,999 £500,000 - £999,999 £1,000,000 - £1,999,999 £2,000,000 - £2,999,999 £3,000,000 - £4,999,999 £5,000,000 - £10,000,000 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Turnover % of practices
85.7% 2.9% 2.9% 8.6% Limited company LLP Partnership Sole trader 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Financial structure % of practices
Turnover growth on previous year
Gross profit % of turnover = gross profit margin
SPVS – Hazlewoods’ Profitability Survey / January 2023 4 11.4% 5.7% 14.3% 25.7% 22.9% 20.0% < 60% 60% to <65% 65% to < 70% 70% to < 75% 75% to < 80% 80% to < 85% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Gross profit % = gross profit (being turnover less drugs/consumables/lab/clinical waste costs (stock adjusted)) / turnover % of practices
8.6% 8.6% 14.3% 17.1% 11.4% 5.7% 14.3% 11.4% 8.6% Negative 1% to < 5% 5% to <10% 10% to <15% 15% to < 20% 20% to < 25% 25% to < 30% >= 30% Unknown 0.0% 5.0% 10.0% 15.0% 20.0% Turnover growth on prrevious year % of practices
Adjusted staffing costs as % of turnover
EBITDA as % of turnover
SPVS – Hazlewoods’ Profitability Survey / January 2023 5 8.6% 5.7% 11.4% 25.7% 5.7% 22.9% 8.6% 8.6% 2.9% < 30% 30% to < 35% 35% to < 40% 40% to < 45% 45% to < 50% 50% to < 55% 55% to < 60% > 60% Unknown 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Adjusted staffing costs as of turnover, where adjusted staffing costs includes market rate equivalent salaries for the working owners + NI + pensions autoenrolment % of practices
14.3% 5.7% 0.0% 14.3% 17.1% 20.0% 5.7% 5.7% 17.1% Negative 0% to < 5% 5% to <10% 10% to <15% 15% to < 20% 20% to < 25% 25% to < 30% >= 30% Unknown 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% EBITDA as % of turnover, where EBITDA = Earnings Before Interest Tax Depreciation Amortisation and including full market rent for the practice property/(ies) and market rate equivalent salaries for the working owners + NI + pensions autoenrolment % of practices
Average number of follow up consults to 100 initial consults, Small Animal
Average number of free consults to 100 initial consults, Small Animal
SPVS – Hazlewoods’ Profitability Survey / January 2023 6 10.5% 0.0% 5.3% 42.1% 26.3% 0.0% 5.3% 10.5% < 5 5 to < 10 10 to < 25 25 to < 50 50 to < 75 75 to < 100 100 to < 125 125 to < 150 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Average number follow up consults to 100 initial consults, Small Animal % of practices
89.5% 0.0% 0.0% 5.3% 5.3% 0.0% 0.0% < 10 10 to < 25 25 to < 50 50 to < 75 75 to < 100 100 to < 125 125 to < 150 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Average number free consults to 100 initial consults, Small Animal % of practices
Drugs/consumables (non-fee) Small Animal turnover for every £1 of Small Animal fee turnover
Drugs/consumables (non-fee) Farm turnover for every £1 of Farm fee turnover
SPVS – Hazlewoods’ Profitability Survey / January 2023 7 0.0% 21.9% 31.3% 6.3% 12.5% 28.1% < £0.25 drugs £0.25
£0.50
£0.50
£0.75
£0.75
£1.00
£1.00+ of drugs Unknown 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Drugs/consumables (nonfee) Small Animal turnover for every £1 of Small Animal fee turnover % of practices
to <
drugs
to <
drugs
to <
drugs
0.0% 16.7% 16.7% 33.3% 16.7% 16.7% < £1.00
£1.00
£1.50
£1.50
£2.00
£2.00
£2.50
£2.50 to < £3.00 drugs £3.00+ drugs 0.0% 10.0% 20.0% 30.0% 40.0% Drugs/consumables (nonfee) Farm turnover for every £1 of Farm fee turnover % of practices
drugs
to <
drugs
to <
drugs
to <
drugs
Drugs/consumables (non-fee) Equine turnover for every £1 of Equine fee turnover
SPVS – Hazlewoods’ Profitability Survey / January 2023 8
0.0% 42.9% 42.9% 0.0% 14.3% < £0.25 drugs £0.25 to < £0.50 drugs £0.50 to < £0.75 drugs £0.75 to < £1.00 drugs £1.00+ of drugs 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Drugs/consumables (nonfee) Equine turnover for every £1 of Equine fee turnover % of practices
3. Optimism check-in
"I am very optimistic that my practice will do very well in the next 5 years."
nb "Do very well" was deliberately not defined precisely.
"I am very optimistic that the veterinary sector will do very well in the next 5 years."
nb "Do very well" was deliberately not defined precisely.
SPVS – Hazlewoods’ Profitability Survey / January 2023 9
22.9% 48.6% 22.9% 2.9% 2.9% Strongly agree Somewhat agree In the middle of agree & disagree Somewhat disagree Strongly disagree 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% I am very optimistic that my practice will do very well in the next 5 years % of practices 5.7% 48.6% 37.1% 5.7% 2.9% Strongly agree Somewhat agree In the middle of agree & disagree Somewhat disagree Strongly disagree 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% I am very optimistic that the veterinary sector will do very well in the next 5 years % of practices
Hazlewoods LLP is a Limited Liability Partnership registered in England and Wales with number OC311817. Registered office: Staverton Court, Staverton, Cheltenham, Glos, GL51 0UX. A list of LLP partners is available for inspection at each office. Hazlewoods LLP is registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.
