Cvs Share Discussion Threads

[melody9999] 02/11/2008 00:27

errrr yeah Jange - except DTY is throwing off cash and CVSG has a debt liability...... like chalk and cheese. not saying it won't come right in long term but its not attracting my money with the current financial markets

[jange] 28/10/2008 09:53

I like the share and hold them at a much higher price than now. Everything isbeing hammered at present but the company is sound and well run. The 'Dignity' of the vet world and a great long term hold.

[lomax99] 28/10/2008 08:30

Edison Research have posted a 'Meeting Note':

'CVS continues to build market share in small companion animal veterinary services and has extended its remit with the recent purchase of the Rossendale Pet Crematorium. Despite the level of corporate activity since flotation, there are a large number of acquisition targets, with immediate margin gains through buying efficiencies with each individual practice.

Plenty to go for - By allowing practices to retain their identities and community franchise, CVS is making itself the preferred purchaser for many vets looking to crystallise the goodwill in their business. With 30 surgeries and one large laboratory added last financial year, the group still only has a 7% market share. We anticipate a similar pace of expansion over the next year or two, as larger groupings of surgeries rarely become available. With competitive average prices as a multiple of EBITDA earnings enhancement occurs at purchase even before the economies of scale kick in. Unlike the human private medical sector, only a small proportion of treatment (estimated at 7% of cats and 15% of dogs) is insurance funded, so pricing schedules are not externally imposed.

Transition to self funding model - The market is obviously currently very nervous of debt. Last year's reported purchases were 72% debt funded, 28% from cash generation. As the levels of cash produced by the group increase, as they should from an inherently cash-generative service sector, then the business model becomes self-funding. Until that stage, the group has debt facilities of £46M, including a £32M six-year term loan and a £12M acquisition facility. The group is currently operating comfortably within its covenants.

Premium earnings growth despite economy - Truly recession proof businesses are apocryphal. CVS at least has a business model that should prove relatively resilient despite household budgets being under pressure, and earnings growing at a substantial premium to the market.'

[lomax99] 27/10/2008 17:52

Like everything else, going south at a rate of knots - I have been averaging down. Anyone else got a view on these?

[lomax99] 16/9/2008 09:00

All these exceptionals, along with the associated financing/debt issue/break costs and the increase in adminstration overheads have certainly had a marked impact - hopefully we will continue to see operating margins improve, as administration costs decrease as a % of increasing sales.

With nearly 75% (£8.9M) of their acquisition kitty invested in nine months, they need to see continued strong cashflow to provide the fuel for their acquisition led strategy, the agreed payment holiday on loan repayment gives them quite a bit of lee-way.

On the plus side, with the economy in it's present state, hopefully they are adding decent practices at the lower end of their 4 - 6 YP range.

[standish11] 16/9/2008 08:47

1.25 million pound hit from derivatives trade per annual results.In my ignorance I thought this was a vet. services company not a Lehman Bros type company!Can someone enlighten me please?

[lomax99] 05/9/2008 15:20

Looking forward to the results on the 16th, hopefully there should be some more news on the acquisitions front soon.

[jange] 14/5/2008 12:58

Well run company. But why such a rise today?

[standish11] 13/5/2008 14:59

I assumed director selling some yesterday would have unsettled these but pleasantly surprised at positive trend.Per Advfn "toplist" share price is nowq positive "breakout"

[beaufort1] 13/5/2008 13:44

Quite a healthy little bounce over the last few days

[contrarian2investor] 30/4/2008 19:02

serotine and other holders,

post 16 OF 22
"The only negative is they are paying LIBOR + 1.5% on an existing 32 million loan plus the same (I think) for their 12 million drawdown facility so this may impact on profits. However if interest rates do fall (and LIBOR in tandem) then this could be good news for CVS".

I too love the business model and the fact that it is essentially recession proof as pet lovers are left with no choice but to pay if they need to use a vet.

Even if CVSG just matches Dignity's performance since its IPO it will be a serious profit maker for shareholders. IMHO

However I remain on the sidelines for the moment until the LIBOR RATE decreases and their debt repayments do likewise.

Any thoughts??

C2I

[lomax99] 02/4/2008 22:51

Ah well, the latest RNS explains the 910k transaction then.

[lomax99] 01/4/2008 09:12

Nice little purchase of 910k shares this morning. IC's view is that this is fairly priced, with recent purchases this share clearly has a following and has held up remarkably well during the recent/ongoing market turmoil. I think it may take a while before we see any marked increases in the SP, hopefully we will see a steady appreciation as CVS continues to execute its strategy.

I understand that Panmure Gordon increased their target to £3.15, a 26% increase over the current SP, hopefully we should see this in the next 9/12 months.

[lomax99] 30/3/2008 18:46

Commentary from the FT:

Furry friend

It is no longer much cheaper to join Aim than to get a full listing. CVS, which is building a national chain of small animal veterinary practices through acquisition, last week reported that admission to the junior market in October cost £1.8m.

That left its maiden interim results well in the red. But earnings before interest, tax, depreciation and amortisation doubled to £4.4m; turnover rose from £16.3m to £28.5m.

CVS also announced its 19th acquisition since flotation. It paid £1.6m cash for Animed, which employs 13 vets in five branches in Hampshire. The purchase takes the number of practices to 51, operating 145 surgeries throughout the UK.

Simon Innes, chief executive, built Vision Express into a business with turnover of £220m before its takeover. He argues that the veterinary profession is changing. In the past a vet nearing retirement would sell his or her practice to a younger partner. Now most young vets would rather be employed.

The company can buy practices at about four and a half times earnings. It is building in what Mr Innes calls a non-predatory way in the hope that it will be seen as a friend to the profession.

About 30 acquisitions are expected each year for the next few years in what looks like a classic consolidation play.

An added attraction is that the animals ask no questions and pass no criticisms, while their owners pay on the nail.

[lomax99] 19/3/2008 13:16

serotine, well worth looking at their interim results presentation on their website:



Looking at page 7 they imply that central costs will continue to fall/margins improve as they grow turnover (either by acquisition, or organically). This implies they have already beefed up significantlty (and perhaps might be over-resourced, in the short-term).

[serotine] 19/3/2008 07:40

thanks Lomax - a bit clearer now. I did a quick check of DTY's (similar business model to CVSG) last report. Their admin costs are 21.8% of revenue generated compared with 33.9% for CVSG. Their sales costs are 46.7% of revenue - CVSG is 56.9%. However CVSG is just starting up so that may explain the difference.

If its 'beefing up' then the admin cost % should drop as revenues increase in future - they look good on the acquisition side. The nighmare would be if admin costs rose in proportion to revenue increase! However I think they should have at least discussed the increase in admin costs in the report (maybe I missed it).

I agree that the £642k looks a bit expensive (almost 80% of profits!). They seem to be paying c. £1 million in interest and I don't really understand the value of the £642k.

[lomax99] 18/3/2008 15:48

A lot of talking about Revenue and not enough focus on margins for my liking in terms of the reporting. Gross margins increased to 43.1% (from 41.5% at year end), and Net margins (Operating Profit) excluding exceptional administrative expenses improved to 9.1% (from 7.4% at year end).

Central admin costs have increased by 81%, £4.35M over the 1st 6 months of last year, and by 23%, £1,792 over the last 6 months of last year. In the same period Revenue has grown by 75% and 26% respectively. Clearly they are beefing up central resource to handle their increasing scale, and there may well be the excess capacity centrally to handle larger volumes. Presumably there may also be a bit of a time lag in integrating new acquisitions, and 'streamlining' existing support.

I will be glad to see the back of the associated float costs/exceptional items. I am not familiar with accounting for hedging, presumably the value adjustment of £642k reflects a dimunition in value, which does not look great.

Pleased to see a healthy rate of ongoing acquisitions, especially if they are being settled in the sort of value range indicated by today's announcement.

[lomax99] 17/3/2008 12:43

Hopefully strong results tomorrow will more than reverse today's decline, I must say that this stock has been remarkably recilient given the market turmoil over the last 2-4 months.

[serotine] 27/2/2008 08:02

they keep the purchase price close to their chest - you might be able to make a guestimate from the report on 18th March. The newly bought practice will be gettig better discounts on drugs and the CVSG laboratories will be getting more business from them so it should all help profits.

[lomax99] 26/2/2008 12:21

Good news, however it would have been nice to have had some indication on multiple paid or indeed a general indication of range.

[serotine] 26/2/2008 07:09

50th acquisition under their belt

For Immediate release 26 February 2008


CVS Group plc

("CVS" or the "Group")

Acquisition of 50th Practice


CVS, one of the UK's leading providers of veterinary services, is pleased to
announce the acquisition of Michael Gourley Veterinary Surgeons in Manchester.
This transaction marks the 50th acquisition by CVS, bringing the total number of
surgeries within the group to 140.

The practice acquired was formed in 1954 and employs nine vets across its
principal site in Ashton and five branches in the local area.

In the year ended 30 April 2007 the practice achieved EBITDA of approximately
£150,000 on turnover of £1.533m and had gross assets of £665,000.

Commenting on the acquisition, CVS Chief Executive Simon Innes said:

"We are delighted to welcome Michael Gourley and his team to CVS. Their
reputation for excellence in clinical care makes them an ideal partner for our
existing practitioners".

[serotine] 19/2/2008 03:04

RNS Number:2443O
CVS Group plc
18 February 2008


For Immediate Release 18 February 2008


CVS GROUP PLC

("CVS")

Notification of Results



CVS, one of the UK's leading providers of veterinary services, will announce
Interim results for the six months ended 31 December 2007, on Tuesday 18 March
2008.

An analyst briefing will be held at Buchanan Communications, 45 Moorfields,
London, EC2Y 9AE at 10.00 am on the day of the results.


Buchanan Communications Tel: [phone]
Suzanne Brocks

[serotine] 02/2/2008 10:23

lots more info on the company in AIM submisiion document - goto following link