Pet cover makes vets 'fat cats'

Pet owners want high standards of medical care for their furry friends

Barristers and chief executives are likely to come to mind when considering the UK's fat cats - but it turns out it's vets that are getting the cream.

Vets are the most profitable business category in Britain, with a 37% return on capital per year over the past two years, a new study suggests.

Information group CCH attributed their performance to a boom in pet insurance and demand for costlier procedures.

The next most profitable sectors were plasterers and greengrocers.

Return on capital measures how well a company generates cash flow relative to the capital it has invested in its business.

CCH said the increasing popularity of pet insurance policies helped to fund more expensive operations, including heart surgery, chemotherapy, and even alternative remedies, thus boosting vets' earnings.

According to Datamonitor, pet owners spent £380m on medical insurance for their beloved animals in 2006. This is forecast to reach almost £600m by 2011.

AVERAGE RETURN ON CAPITAL Vets: 37% Plasterers: 28.3% Specialist fruit and vegetable retailers: 27.5% Butchers: 23% Joiners: 20.3% Source: CCH

Chris Lowry, a partner at national accountancy group UHY Hacker Young suggested that the very long training period required to become a vet meant they made sure they were well rewarded for their work.

"Although veterinary businesses carrying out the more costly procedures clearly have to invest in any specialist equipment or extra training required, they appear to be getting the necessary economies of scale to make the return on that expenditure very worthwhile," he added.

However, although vets might run their businesses efficiently, their average annual earnings are £36,635; the average family GP earns more than £100,000.

CCH analysed the financial performance of more than 530 industry sectors using the latest accounts data from Companies House.