RHP - Roman House Publishing

Anecdotal feedback from practices involved in the survey suggests that many continued to be busy during the summer and are feeling more confident about the future. This contrasts with much of the data in the survey which confirms a continuation of the recent downward trend in most key veterinary practice metrics.

The FDI analyses and benchmarks the performance of practices across the UK on a monthly basis. The latest data confirm that:

• Turnover growth was positive at 2.2% but still significantly lower than the 3.6% achieved during the same period in 2008 and the 5% recorded in 2007
• Veterinary (clinical) sales were up by 4.2% during the period compared to last year and veterinary turnover per vet has increased by 3.1% since December 2008. 'Leveraged' sales (non-veterinary) have reduced by 2.3%
• Transaction volume growth has decreased by 1.6%. Within this, total transactions per vet have decreased by -2.6% to 5,800 since December 2008 but nurse consults have increased by 2.4%
• Client visit frequency has remained quite stable at 6.0 times a year
• While the number of patients attending preventive healthcare programmes is steadily increasing, the percentage of pets involved remains very low (10.8% of dogs and 1.9% of kittens)
• Transaction value (average annual client spend) has increase by 3% to £245 since December 2008

Commenting on the latest findings, vet, practice management consultant and FDI analyst, Alan Robinson, said: "The ways in which practices have responded to the economic situation have varied. Some have run on lower staffing over the summer, for instance, and others have delayed investments. If a downturn can ever be said to have a good side, what it has done is force many practices to review their businesses from a financial and marketing perspective and to make changes to increase their efficiency and customer service.

 "This mood of optimism could still prove ill-placed though, as the FDI makes hard reading. While turnover is still growing, it's not increasing at a level to counteract inflationary costs and it's significant that actual transaction numbers are reducing. Unless practices have reduced their costs in line, their profits will be affected. Given average practice profitability is already less than 10% and declining, a further drop could be devastating.

"While professional fees and drug sales are up, the increase has been generated solely by prices rises. Sales of leveraged products, such as food, are actually reducing as fewer animals are being vaccinated, which affects clients buying habits in practice. While price rises have driven up average transaction values and mitigated the effects of decreased diagnostic and preventive health work, they can't be the only tool relied upon by practices to sustain profitability.

"The fall in transaction volume growth is a particular issue because it highlights a continuing downward drift in client and patient growth. It's perhaps a hopeful sign that the fall seems to have stabilised since earlier this year, following six quarters of consistent decline, so it may be that we are starting to see a levelling off effect in this area. It's also been fortunate that, given fewer animals are being vaccinated, those clients actually with vaccinated animals are coming in more and their spending levels are holding up."