Premier Veterinary Share Discussion Threads

[hydrus] 30/11/2016 11:05

I guess some are not prepared to wait until profitability, each to their own. Happy to sit on my hands here for the next few years. Patience needed.

[hydrus] 30/11/2016 07:35

Thanks for posting Petlover

[pet lover] 30/11/2016 07:08

Broker Forecasts:

2016 2017 -2.2M

2017 2018 0.3

2018 2019 4.1 (based on 4.5 PE )

So you were correct HYDRUS.👏

[hydrus] 29/11/2016 23:30

I also think a good chunk were share options granted in the previous financial year but vested in 2016/17 approx £300k. Pet lover may know more about this but definitely worth exploring.

[hydrus] 29/11/2016 23:23

I think you read right - it seems excessive of course. I believe a large chunk however was a one off bonus in relation to the turnaround and sale of the vet clinics, which he was responsible for. Perhaps a question for the AGM. I think they include a very clear analysis of what his potential package could be this year for 2016/17 and it will be between £300k and £400k depending on whether they achieve stretch targets for pet plan sales.

[mr dexy] 29/11/2016 23:07

Had a look at the Annual Report.. one question good people,

Did I read that right.. value of DT's remuneration package for the year, £805k?

Thanks in advance.

Regards to all


Mr D

[pet lover] 29/11/2016 22:36

Falling quickly to 4.5x and 4.6x respectively in FY19.

This is the strange bit if that's the case.

[hydrus] 29/11/2016 22:33

I think the 37.6 and 4.5 figures are the projected EV/EBITDA figures for 2017/18 and 2018/19. The 60.3 and 4.6 figures are the projected PE figures for 2017/18 and 2018/19.I don't think they comment on 2016/17 or 2019/20. Might have misunderstood though also....

[pet lover] 29/11/2016 22:26

Hydrus: your understanding of this if I am correct.

2016 - 17 loss

2017 - 18 PE 60.3

2018 -19 PE 4.5

2019 - 20 PE 4.6



Forecast assumptions: We forecast a 3-year revenue CAGR of 68% out to 2019E, driven by continued growth in the company’s existing territories, with expansion into new geographies generating further incremental growth as the company progresses the international rollout of the PPCP product. Through the forecast period revenue from the US grows faster than other territories. In the US, the company achieves a significantly higher gross profit per transaction which delivers a superior contribution to the bottom line.
Valuation potential: The Premier Veterinary Group Plc currently trade at an EV/EBITDA of 37.6x and a P/E of 60.3x to FY18, falling quickly to 4.5x and 4.6x respectively in FY19 based on our forecasts. We believe there is potential for the company to reach £10m of EBITDA over the medium term if the US rollout is successful, and we see an increased uptake in Europe. We see no reason why this should not be a £150m+ business if they deliver £8m – £10m EBITDA based on current peer group valuations.

My understanding : may well be incorrect.

2016 2017 PE 60

2017 2018 PE 4.5

2018 2019 PE 4…6

[hydrus] 29/11/2016 22:02

FY18 means 2017/18 So they haven't commented on this year (2016/17) as assume they think a loss like I do. Then a small profit in 2017/18, hence the PE of 60ish

[pet lover] 29/11/2016 21:59

Valuation potential: The Premier Veterinary Group Plc currently trade at an EV/EBITDA of 37.6x and a P/E of 60.3x to FY18, falling quickly to 4.5x and 4.6x respectively in FY19 based on our forecasts. We believe there is potential for the company to reach £10m of EBITDA over the medium term if the US rollout is successful, and we see an increased uptake in Europe. We see no reason why this should not be a £150m+ business if they deliver £8m – £10m EBITDA based on current peer group valuations.

Still a bit lost on this

2016 -2017 PE of 60.3 must mean a tiny profit ?

[hydrus] 29/11/2016 21:45

I haven't Petlover but.....I think Zeus mean PE of 4.6 at current Mcap in 2018/19 (FY19). That suggests EPS of 27.5p in FY19 so around £4.1m post tax profits.Obviously if they achieve that then in reality the PE would likely be order of 20/30/40 times earnings with the huge growth behind them. All hypothetical of course!

[pet lover] 29/11/2016 21:33

HYDRUS.

Have you seen the 3 year profit forecast anywhere.Todays note is not clear but I think it will show a loss this year then a PE of 4.5 in 2017-8. I may have got the wrong end of the stick though and it might be a year later.🌻

[hydrus] 29/11/2016 21:08

Annual report makes interesting reading. Some great quotes in their from Vets about how the pet plans have transformed their businesses.Also an update on pet plans - 153,000 by 25 November so 14,000 extra in just under 2 months, hence growing at circa 90,000 annualised.

[pet lover] 29/11/2016 18:25

Compound annual growth rate (CAGR)68%.
Most of the growth to come from the USA at far higher margins.
One new sign up stateside sold 20 plans in the first ten days.
Recurring revenue model with low churn rates.
Directors have large holdings.

[tallprawn] 29/11/2016 13:55

I've taken a few more today... Trade should show up later. I like the look of the US opportunity also. Decent margins and also the benefit of the favourable USD rate at present. I'd like the BOD to PR the share/company a bit more - That would be my main wish right now. It would be really helpful to see a few more transactions each day and a higher ratio of new investors buying into the story here - We're too far under the radar for my liking at present.GLA... A return to the highs of the summer can't be far away imo.

[hydrus] 29/11/2016 13:25

Thank you Pet Lover - "In the US, the company achieves a significantly higher gross profit per transaction which delivers a superior contribution to the bottom line."Well that's a real bonus then!The forecasts of a £150m business over next five years don't seem absurd to me.

[hydrus] 29/11/2016 12:32

Sorry to blather on but just my view....taking a conservative view if they add 70,000 plans this year and then same again next year I think they will make a small loss this year of less than £500k, (assuming investment levels continue at same level and estimating a pet plan fee of £20, which I believe is the middle ground on this forum) and then make a profit of £1m plus next year. After that the gross margins should propel profits way higher for the next few years with high double digit growth IMO.

[hydrus] 29/11/2016 10:14

Just a couple of observations whilst I have a minute. Firstly the fact that results have been released quickly, best part of two months ahead of last year tells me that governance here is strong.Secondly, gross margins are running at 98%. These pet plans are absolute cash cows. I have said on here before I think this company could be profitable already if it chose to be. Note that costs last year (which included some international expansion investments) were £3m, ignoring the financing costs which are now negligible. Well revenue for the full year just gone was.......£3m. Think this shows the only reason it isn't profitable is their strategic decision to invest.They have invested heavily in pushing these plans internationally and in new software etc and rightly so. I am very excited still by PVG. I will have a think about how quickly I think their plans will grow based on latest information but I think they will likely add somewhere between 70,000 - 100,000 plans this year. Perhaps more the following year.

[hydrus] 29/11/2016 07:58

Quick look - Results as expected I think this sentence sums things up very well, an excellent opportunity if investors can be patient and watch things develop over next five years. "The significant progress made over the last 12 months in Europe and the US has helped develop a clear path for investing in sustainable aggressive growth over the next 5 years. The Company's research across many countries indicates an opportunity to build a major global enterprise to deliver substantial returns to shareholders."

[hydrus] 24/11/2016 08:57

Thanks Petlover, a 5 fold increase in the last 18 months or so has been very helpful.I will take a look at 7dig in the next few weeks. Agreed that PVG could be making a profit either now or very shortly but they are of course investing for growth. Last year the full year results took quite a bit of time to produce. I'm anticipating we may get them a bit sooner this year. The results will show good revenue growth but more importantly we should get an update on clinics and plans in USA and other territories.

[pet lover] 24/11/2016 08:36

HYDRUS: Congratulations with your FEVR.

If each signed up vet in America can get 20 plans away in the first ten days next Christmas will be the best ever. My other share 7Dig is in exactly the same position growing rapidly and about to roll into profits. The attraction to both stocks is this constant stream on monthly recurring revenues. 7Dig quote exit monthly recurring revenues to give a better guide to the companies position going forward. PVG might do well to do the same but in the long run it makes no difference. As a shareholder recurring revenues gives a degree of safety if the markets take a kicking.I believe each of these enterprises would be in profit now if it was not future growth they were chasing. I also firmly agree that at some point the wider market will take an interest when it does buying in volume may not be easy.The next PVG update is due just before Christmas or just after so not long to wait.🌞

[hydrus] 23/11/2016 12:14

Petlover thanks, useful updates whilst we patiently wait for clinics to be signed up and pet plans sold.I am very interested in how they get along converting their contracts in USA into signed up and launched clinics. It will take some time but I'd hope it moves forward at some pace once we are into the next calendar year. The share price this year has done nothing, in fact it peaked at end of December last year. Still clearly off radar and no institutional buying. That's not to be unexpected as revenue is low and without research doesn't look exciting. We may have to be patient and wait for the inflexion point of profitability for real interest. I suspect that will happen at some point in 2017/18 financial year.

[pet lover] 23/11/2016 08:46

Cheek to Cheek Hospital for Animals
21 November at 14:04 ·
We have reached 20 patients on our Premier Pet Care Plans! 20 clients are reaping the savings of this simple, effective, and affordable plan. What are you waiting for? Call for more information and get signed up today!


👌🌞

That's 20 plans in ten days.The hound likes me being at home 😺