Continued growth in pet ownership led to a surge of activity in the UK veterinary market says new Christie & Co report

The report highlights the sector’s notable surge in growth post-pandemic, fuelled by an increase in small animal or pet ownership in the UK, which has driven demand for veterinary services. The UK’s veterinary market, which comprises 5,331 practices, has risen from £5.04 billion in 2021, to £6.3 billion in 2023, according to the Office for National Statistics, and therefore financial institutions have shown a strong increase in backing smaller veterinary enterprises.

Christie & Co also notes that, over the past five years, there has been a significant increase in the number of independent practices acquired by corporate operators, with the top six corporate groups now owning circa 3,000 practices (56 per cent) of veterinary practices in the UK according to the RCVS.

Valuation Activity and Operational Review

Between 2021 and 2024, Christie & Co’s specialist VS team valued over 150 veterinary practices across the UK with a combined total value of £222 million.

Christie & Co reports a circa 71 per cent increase in the value of practices it has valued since 2021, which can be attributed to the sharp increase in animal ownership figures and a consequential uptick in demand for veterinary services. The report also shows there has been a 6.13 per cent rise in the average gross profit margins of practices between 2021 and 2023, demonstrating the increased strength of the sector.

Much like in the wider economic market, factors such as Brexit and the increased National Living Wage have resulted in year-on-year increases in average wage costs, which has impacted the veterinary sector. Looking at both owner-operated and managed practices, the average EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), Christie & Co highlights an average fall of circa 3.15 per cent between 2021/2022, which almost directly correlates with the considerable increase in wage costs between these periods. However, these levels increased between 2022/2023 as practices successfully increased their topline turnover levels.

​Market Predictions

For 2024/25, Christie & Co expects to see:

• Continued growth within UK pet ownership will lead to further demand for veterinary services, although the cost-of-living crisis may impact the amount pet owners are willing to pay and how much practices charge for traditional services​
• An anticipated hangover from Brexit with regards to the national shortage of veterinary surgeons and nurses, which may result in increased costs for staff retention which could be passed on to the consumer
• The CMA will publish its review of veterinary services in the UK which will lead to reduced corporate M&A within the short to medium-term. This may result in the divestment of existing corporate portfolios and, as a result, growth of the independent sector
• Financial institutions will closely monitor the CMA process and funding is likely to remain readily available across traditional high street banks and private equity sources​
• Many veterinary practices will seek to diversify and offer more specialist services to capture a larger patient base and increase turnover levels​
• Advances in technology and Artificial Intelligence (AI) may impact the veterinary market, but to what extent is yet to be seen
• With a large proportion of high street banks invested in the market, Christie & Co expects a continued need for professional advice and services within the sector​
• With interest rate increases in 2023, Christie & Co saw a rise in refinancing, and anticipates further bank activity in 2024

The report also includes a view on the finance landscape from commercial finance broker, Christie Finance, which notes lender’s positive sentiment towards the veterinary sector.

Chris Vowles, Head of Valuation – Medical at Christie & Co, comments, “The UK veterinary operational market is poised for continued growth and evolution. Key drivers such as demographic shifts, evolving pet owner expectations, and technological advancements will shape the industry landscape. Veterinary practices will have to continue to navigate the evolving landscape. Strategic investment in technology, talent, and client engagement will be essential for sustaining competitive advantage and meeting the evolving needs of pets and their owners.”

To read the full Veterinary Market Insight 2024 report, click here: https://www.christie.com/news-resources/publications/veterinary-market-insight-2024/ 

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For further information on this press release, contact
Niamh Toman,  Junior Corporate Communications Executive 
P: 07768 646 984 or E: niamh.toman@christie.com  

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