Cvs Share Discussion Threads

[tristan1561] 20/9/2018 07:11

So how come the fee inflation isnt being refected in L4L sales? Benchmarking data from privately owned vet practices suggests L4L of 4 to 5 % is the average at the moment.

[lomax99] 20/9/2018 05:37

They flagged the shortage last year:Http://www.dissmercury.co.uk/news/prices-will-rise-because-of-vet-shortage-warns-cvs-group-1-5302399the problem is not unique to them, cost inflation will inevitably be passed on.

[tristan1561] 19/9/2018 18:18

Word in the vet employment market is that with the shortage of experienced vets CVS are having to significantly increase vet salaries to attract and retain vets. With low L4L sales growth hard to see anything other than a squeeze on profits. They are also being regularly outbid, by vetpartners particularly, for prime practice acquisitons so that growth from that route is restricted. Without a bid cant see the share price picking up and the PE backed groups would be a much easier acquisition for say Mars than CVS.

[lomax99] 19/9/2018 13:36

Good to see some movement of late, still some way short of where it should be IMO.

[lomax99] 18/9/2018 07:25

Didn’t notice it was last year!

[tristan1561] 17/9/2018 22:20

Why the repost of B&W acquisition from sept 2017? CVS have made a few more since then.

[lomax99] 17/9/2018 13:22

A decent acquisition:



CVS has announced the acquisition of B&W Equine Vets, the largest specialist equine veterinary group in the south west of the UK.

B&W operates an integrated practice based around a multi-disciplinary referral hospital in Breadstone, Gloucestershire, with additional clinics in Cardiff, Gloucestershire and Bristol. The group employs more than 30 veterinary surgeons, including seven diploma holders, and offers a full range of services, including what it says is the most comprehensive equine imaging service in the UK.

Ian Camm, Managing Director of B&W, will continue in the role of Equine Regional Director for the South West at CVS. He said: "We are excited about life within CVS and see many opportunities for our staff both within B&W and within the wider Equine Division at CVS. We look forward to working with the CVS team to realise the potential the partnership offers to members of our team and to further developing B&W as an equine veterinary centre of excellence."

Simon Innes, Chief Executive at CVS, said: "Our Equine Division has grown rapidly over the last 18 months because we offer an ambitious and exciting vision for the future of equine practice. B&W is one of the UK’s premier equine practices and we are delighted to welcome the team to CVS and look forward to working with them to help them build an even more successful future."

[lomax99] 25/8/2018 11:41

Another Irish acquisition:

[lomax99] 23/8/2018 06:21

Shares magazine today:

Act quick and snap up CVS as it looks a prime takeover candidate
The veterinary services group could switch from predator to prey

The veterinary sector is involved in some major M&A at the moment and we wonder if long-term predator CVS (CVSG:AIM)
could become prey.

Mars Petcare – the brand behind the Pedigree and Whiskas pet food – also has veterinary health interests and in June acquired UK services group Linnaeus which owns 87 veterinary practices.

Private equity group BC Partners earlier in August bought VetPartners, owner of 260 primarily small animal UK vet practices, for £700m.

These transactions highlight the industry’s structural attractions. Animal lovers prioritise spending on the wellbeing of their pets, making earnings fairly resilient among veterinary groups.

CVS operates 482 veterinary surgeries across the UK, Netherlands and Republic of Ireland, plus it has an online store selling medicines and pet food, four diagnostic laboratories and seven pet crematoria.

It has been consolidating a fragmented industry, snapping up small animal, equine and farm animal veterinary operations and boasting a strong pipeline of acquisitions in the UK, Netherlands and elsewhere.

So why would someone pounce on CVS now? The answer is simple. Its share price is currently weak, making it a sitting duck for someone interested in the sector and happy to take a long-term view of its prospects.

It trades on approximately 13 times EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortisation). Broker N+1 Singer believes BC Partners paid 15.2-times for VetPartners.

CVS has been marked down because of some trading problems caused by bad weather earlier this year and recruitment challenges. The Brexit vote led to a shortage of clinicians coming to the UK, meaning CVS had to pay more money to secure available workers. Furthermore, some of its acquisitions haven’t performed to expectations.

All of these issues aren’t a reason to suddenly turn your back on what has historically been a superb investment. For example, CVS’ shares increased by 460% in value between November 2013 and 2017.

The best times to buy a share are often when the market has lost interest, and we certainly think that applies to CVS at the moment.

Results on 27 September may cause a slight wobble in the share price as CVS has already warned that earnings would only be ‘broadly in line’ with expectations. That word ‘broadly’; normally implies a slight miss.

For the year to June 2018, stockbroker N+1 Singer forecasts adjusted £36.1m pre-tax profit (2017: £33.5m) and a dividend hike from 4.5p to 5.5p, ahead of £42.9m pre-tax profit and a 6.5p dividend in the current financial year. (JC)

CVS Buy

[lomax99] 22/8/2018 13:44

From 20/8/18:

RBC upgrades CVS as it turns positive on underlying prospects despite acquisition issues

In a note to clients, the bank said the recent underperformance of some recent acquisitions for the AIM 100 veterinary services provider was “something of a surprise"

Analysts at RBC have upgraded CVS Group PLC (LON:CVSG) to ‘Outperform217; from ‘Sector Perform’ as the bank was positive on the company’s underlying prospects despite recent issues with acquisitions.

In a note to clients, the bank said the recent underperformance of some recent acquisitions for the AIM 100 veterinary services provider was “something of a surprise, given the company has an extensive track record in making acquisitions since IPO (over 450)”, but added that these would remain “short-term in nature”.

RBC also added that despite investors’ concerns on slowing underlying growth, the company had still had “room to grow in the UK and more again across the continental EU”, while also maintaining exposure to the “fundamentally attractive and defensive pet healthcare end-markets”.

However, the bank also cut its target price for the firm to 1,190p from 1,230p to reflect reduced earnings per share (EPS) multiples for the 2020 financial year, on the assumption that acquisitions would continue and the deployed capital expenditure to complete them.

“With the underlying picture largely in-line with our views expressed at initiation (only recently) we again see the pullback [in the share price] as an opportunity for investors given CVS is still a leader in an attractive market,” the broker said.

In a trading update on 2 August, CVS said heavy snowfall earlier this year and a lower-than-expected performance from some acquisitions hit its full-year earnings, causing its shares on the day to drop around 16%.

[lomax99] 09/8/2018 15:14

Had a few more.

[lomax99] 09/8/2018 13:21

Missed this one, another PE vulture swoops:


BC to buy £700m VetPartners in sector's biggest UK takeover

BC is buying the veterinary services group VetPartners, which trades from 260 UK sites, in a £700m deal

The private equity firm BC Partners is close to sealing a £700m takeover of VetPartners in a deal that will mark the fast-growing sector's biggest UK deal.


Sky News has learnt that BC, which owns British companies such as the Cote restaurant chain, is putting the finishing touches to an agreement to buy a controlling stake in the 260-site business.


If completed, the deal, which insiders said could be announced later this week, would mark a bet on Britons' continued propensity to spend ever-increasing sums on the welfare‎ of their pets.

York-based VetPartners employs roughly 3000 people, making it a substantial British employer‎.

Its sale is expected to generate a handsome return for August Equity, the private equity group‎ which backed the company in 2015.

The deal will come just months after Ares, another investment firm, ploughed about £500m into VetPartners through a combination of debt and equity instruments, giving it a substantial minority stake.

Both Ares and VetPartners' management team are expected to reinvest in the business as part of the sale to BC.

Speaking at the time of the Ares deal, David Lonsdale, a partner at August Equity, said:

"We see significant further growth potential in the business and a market with a very long runway.


"With high-quality earnings, high levels of fragmentation and private pay dynamics, veterinary services is a highly attractive sector for private equity."

The fragmented nature of the British vets market has created scope for private equity groups to develop 'buy-and-build' tactics aimed at achieving scale for companies which benefit from synergies in areas such as marketing and equipment procurement.

CVS, which is one of few London-listed providers of veterinary services, has a market value of just under £700m.

It operates about 360 practices across the UK and the Netherlands.

Assuming the VetPartners deal goes through‎, it will be the latest in a string of deals involving British companies in the sector.

Mars, the confectionery-to-petfood conglomerate, recently took control of Linnaeus, while EQT, the Swedish investor, is reportedly examining options for Independent Vetcare, which it bought in 2016.

[lomax99] 09/8/2018 13:15

Perhaps the new FD might like to dip his toe in the water, for an initial purchase?

[saucepan] 09/8/2018 08:28

Thanks, lomax99

[lomax99] 09/8/2018 05:08

IC comment:CVS disappoints shareholders, againVeterinary group CVS (CVSG) has admitted that trading in some of its newly acquired practices has been disappointing. The group – which bought 52 new surgeries for £51m in the year to June 2018 – blamed poor weather for the performance and said that normal like-for-like growth would resume in the current financial year. Still, unimpressed shareholders wiped a fifth off the company's market capitalisation in response.CVS can't afford any slip ups. The group's aggressive acquisitions strategy has made it the largest owner of veterinary practices in the UK and investors have come to expect seamless integration and solid underlying growth. But competition is on the rise, forcing CVS to enter into expensive deals in order to keep rivals at bay. What's more, as many of these practices are being bought from private owners, retaining the vets and nurses has caused a big hike in staff costs. The extent of the spending will be revealed when the group announces its annual results at the end of September.IC ViewFollowing its spectacular growth until the end of 2017 and despite the positive trends of the market, CVS has struggled to regain favour with investors since its profit warning last December. But we think investors have over reacted to the recent update. A forward price to earnings valuation of 19 times looks good value considering the long-term potential. Buy at 939p.

[tristan1561] 04/8/2018 17:54

First post but I am involved in this buisness area so have a reasonable understanding of how things operate in this market. Like for like in the practice division is what you need to see to drive increased profit. After the short term gain of improved GM post acquisition of practices the hard yards are all about keeping that turnover going forward. CVS claims that owners often stay post acquistion. My experience is not for long and some even leave to then open a new venture competing against their old practice. Keeping and motivating professional staff to drive turnover is hard but without good staff in surgeries clients walk out of the door.

[lomax99] 02/8/2018 23:44

Welcome to Advfn tristan1561, I see that you have just joined today and that this is your first post.

I suspect that they know what they are doing - they have been acquiring, and successfully integrating, practices for quite some time......

[tristan1561] 02/8/2018 23:19

Take out the 2% contribution to L4L by animed which is an internet pharmacy buying turnover with rock bottom pricing and you get left with just 2.9% from the practice division. Current prof staff cost pressures in this sector means you need significantly more growth than this for profits to even stand still. Buying practices is easy you just throw money at owners. Running them to achieve turnover growth is hard and I am not sure CVS Group has a real strategy to achieve this. Recent share price has been supported by Mars buying Linnaeus but there are other PE backed non listed groups that would easier for Mars to acquire so dont bank on that as a future way out. They have missed out on the majority of recent large practice acquisitons to PE backed vet partners. Hard to see where the growth will come from going forward

[staverly] 02/8/2018 09:40

Would imagine because paragraph 3 clearly suggests a profit warning, albeit a mild one.

[shooting_star] 02/8/2018 09:11

why is the stock down so much? deterioration in underlying organic growth vs. the last update?

[nimrod22] 02/8/2018 09:08

good buying in point at share price drop.

[lomax99] 02/8/2018 08:48

Adding here.

[hkre3] 02/8/2018 08:44

Ouch. One for the purists to wait this out I guess but similar prices seen in Jan I guess,..