CVS Group

Website: CVS Group
Index: AIM
EPIC: CVSG
Supersector: Retail
Sector: General Retailers
Subsector: Specialized Consumer Services
Market Cap: £873.55M
Payout Frequency: Annual

CVS Group Dividend Analysis and Summary

Dividend Details

Declared: Final dividend of 8.5p per share (FY24: 8.0p, +6.3%)
Policy: Board reiterates a progressive dividend policy
Ex-dividend date: 06/11/2025
Record date: 07/11/2025
Payment date: 05/12/2025
Approval: Subject to shareholder approval at the AGM on 18/11/2025
Indicative yield: c.0.7% on the year-end share price of 1,250p (final dividend only)

Payout Capacity and Coverage

Adjusted EPS: 80.1p; final dividend cover c.9.4x
Free cash flow (FY25): £72.2m; estimated cash cost of final dividend c.£6.1m (c.12x FCF cover)
Adjusted operating cash conversion: 76.9% (vs 70.1% FY24)
Leverage: 1.18x (bank test), well below the <2.0x target ceiling; facilities of £350m to Feb 2028 with ample headroom

Context and Notable Items

Revenue: £673.2m (+5.4%); Adjusted EBITDA: £134.6m (+9.4%), margin 20.0%
Statutory profit boosted by the sale of Crematoria; core PBT down on higher finance and depreciation costs
Like-for-like sales: Group +0.2% (Practices +1.0%) with stronger Q4 momentum
Capital allocation: Ongoing capex (£33.2m continuing ops) and Australia M&A (£29.2m in FY25; further £23.6m post year-end)

Structural Changes / Events Affecting Dividend Outlook

Divestment of UK Crematoria for £42.3m (10x adj. EBITDA), strengthening the balance sheet and funding expansion
Inorganic growth continues in Australia, including deals with non-controlling interests (70%/75% stakes), modestly reducing attributable cash inflows to the Group
CMA market investigation in the UK ongoing; provisional decision expected mid-October 2025 with potential remedies (e.g., joint branding, standardised price lists)

Assessment for Dividend-Focused Investors

Sustainability: Very strong based on low payout, robust FCF, improved cash conversion, and low leverage. Interest cover remains healthy and facilities extend to 2028.
Growth trajectory: Final DPS up 6.3%; management reiterates a progressive policy. With consensus FY26 adjusted EBITDA around £141m, capacity for continued DPS growth looks intact, assuming stable trading and ongoing cash generation.
Support from financials and capital allocation: Dividend is clearly a secondary but reliable use of cash after disciplined capex (c.£30–50m p.a.) and acquisitions (~£50m p.a. subject to timing), consistent with a growth-first strategy and leverage cap at <2.0x.

Risks and Flags to Dividend Stability

CMA outcome risk: Remedies could pressure UK pricing, disclosure and margins; heightened sector scrutiny may weigh on growth and sentiment.
Cost inflation: UK wage and Employers’ NI increases (annualised c.£11m) may compress margins if not offset by efficiencies and price/mix.
Operational soft spots: Laboratories lost a major customer; online retail declined; UK LFLs modest. Execution on efficiency and Australia expansion key.
RDEC dependence: Research & Development Expenditure Credit of £15.1m materially supports EBITDA; changes to RDEC could affect reported profitability and cash.
FX/structure: Expanded Australia footprint introduces FX translation volatility and NCI leakage, though balance sheet strength mitigates.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency

Total (Annual Dividends Per Share): 0.00p

Dividend Yield = Annual Dividends Per Share (0.00p) ÷ Share Price (1224p) = 0%

Ex Dividend Date	Payment Date	Type	Amount	Currency
06/11/2025	05/12/2025	Final	8.50p	GBX
31/10/2024	29/11/2024	Final	8.00p	GBX
02/11/2023	08/12/2023	Final	7.50p	GBX
17/11/2022	02/12/2022	Final	7.00p	GBX
18/11/2021	03/12/2021	Final	6.50p	GBX
21/11/2019	06/12/2019	Final	5.50p	GBX
22/11/2018	07/12/2018	Final	5.00p	GBX
23/11/2017	08/12/2017	Final	4.50p	GBX
24/11/2016	09/12/2016	Final	3.50p	GBX
26/11/2015	11/12/2015	Final	3.00p	GBX
04/12/2014	22/12/2014	Final	2.50p	GBX

Year	Final	Currency	Total	Change
2023	7.500	GBX	7.500	7.140
2022	7.000	GBX	7.000	7.690
2021	6.500	GBX	6.500	18.180
2019	5.500	GBX	5.500	10.000
2018	5.000	GBX	5.000	11.110
2017	4.500	GBX	4.500	28.570
2016	3.500	GBX	3.500	16.660
2015	3.000	GBX	3.000	20.000
2014	2.500	GBX	2.500

Number of Shares:

Payment	Paid	Amount
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