This may have passed you by – it certainly passed me by – but the period from April 7th to May 7th was National Pet Month.

This is, I gather, an annual event the purpose of which is to promote responsible pet ownership, make people aware of the benefits of pets for people and people for pets, and increase public awareness of the services available from professionals who work with animals.

This year the theme was ‘Love Is…’ and we were all encouraged to ‘look at how pets are a part of family life, the love they bring to all family members, and how we can repay that love.’

Not being a pet-owner myself, I find the sound of this rather creepy. But at least so far as promoting pet ownership, responsible or otherwise, is concerned it seems to be working.

Apparently there are now nearly ten million cats in this country. I find this hard to believe. Every now and then two of them choose to have a fight outside my front door, but I have no idea where the rest of them are. Inside, I suppose, sitting on the sofa with their loving owners and watching Neighbours.

Anyway, aside from this enormous cat population there are also 6.7m dogs, 5.7m ‘small mammals’ and 2.3m reptiles. So that makes a total of 24.6m pets, a number that has risen steadily since 2002 when the total was a mere 19.8m.

How many legs!

Not only is this pet population growing, so is its variety. A recent change in the law means you no longer need a license to own such things as a woolly lemur, a squirrel monkey, a sloth, a crested porcupine, a mangrove snake or a Brazilian wolf spider.

Exactly why anyone would want to own such a creature is beyond me, but 25m pets mean 25m pets that must be looked after. This is the background to the recent stock market flotation of CVS Group, a company that is busy buying up veterinary practices.

It is valued at £120m, a little lower than the £200m accorded to a second company in this field, Dechra Pharmaceuticals. But while Dechra devises drugs and other forms of treatment for animals, CVS is more concerned with their application, and it believes that there is a good opportunity to consolidate the vet business.

22,162 qualified surgeons are registered with the Royal College of Veterinary Surgeons. After excluding those that work abroad, are non-practising, or work for various charities, research institutes or in the public sector, there are 13,380 in UK General Practice. The majority of these are women and with 74% of veterinary graduates of the fairer sex, this is increasingly becoming a job for the ladies.

This is seen as one of the reasons why the owners of veterinary practices are willing to sell out. Women are inclined to work part-time, and anyway do not want to deal with the administrative burden of the traditional partnership structure.

Nor for that matter, do other young professionals, so upon retirement vets find that they cannot easily pass on the practice. But they can sell out to a corporate buyer, and this has led to the growth of various chains, such as Goddards, Companion Care, and Medivet. But CVS Group, which already has 128 surgeries is more than twice the size of its closest competitor.

Great opportunity for growth

In total there are 3,932 veterinary practices in the UK. Some of these cater for large animals, some for small animals; a few are equine specialists, while the rest do a bit of everything. So CVS still has a small share of the available market and the opportunity to grow substantially larger. And not only can it achieve growth through acquisition, but the market itself is also expanding.

The increase in the number of pets is attributed to various factors. One is the growing number of people living alone. Another is the phenomenon of ‘empty nesters’ filling the gap vacated by their children with companions of the four-legged variety.

According to the American Pets for the Elderly Foundation people over the age of 60 who own pets live healthier, more fulfilled lives than older people without animal companionship. The evidence, it says, is ‘paws-itively irrefutable’. Yuk! Anyway, I guess that taking your dog for a walk can only be good for you.

So the number of furry or scaly friends is growing, and so is the range of available services. Aside from medical treatment, CVS is looking to sell Petplan insurance, catteries, kennels, grooming, behavioural classes and crematorium services.

The company has only been quoted on the stock market since 10 October, and now investors are waiting to hear news of acquisitions. In its admission document it said that it was evaluating more than fifteen of these, and is regularly approached by potential sellers.

For a company that made a profit of £5m on turnover of £39m in its latest financial year, the £120m valuation looks pretty generous. Even so, the business model is attractive, pet ownership is recession proof, and – well – we would do anything in return for love, wouldn’t we? P.S. If you want to follow the tales of a small company investor, and uncover the hidden gems of the stock market, then sign up for the Penny Sleuth e-letter. It won’t cost you a penny…

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