Cvs Share Discussion Threads

[farmsted] 23/7/2015 16:00

Seems to be falling from grace, no news making shareholders bored, will wait and watch alittle longer as I hope its bottomed out

[mike740] 03/6/2015 18:21

Indeed indeed.

[gargleblaster] 03/6/2015 17:35

Seems to be making a habit of "the late charge"!

[mike740] 03/6/2015 17:21

CVSG

Lovely strong finish today. The next leg up truely well on its way.

[mike740] 03/6/2015 09:08

CVSG: interesting to note one brokers share price TARGET........

07 May Berenberg Buy 663.50 560.00 730.00 Reiterates

730p.

[mike740] 02/6/2015 21:35

CVSG looks rather dear until you take into account that EPS growth here is at a cracking rate. If investors bought while P/E was 50 plus why shouldnt they Buy whilst P/E is at forecasts of half of that. People spend a lot of money on there Pets.

CVS Group PLC

FORECASTS


2015 2016
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

N+1 Singer
01-06-15 CORP 17.60 22.80 3.00 19.73 25.50 4.00
Peel Hunt LLP
29-05-15 BUY 18.83 25.52 3.00 20.62 27.62 3.50
Investec Securities
09-04-15 BUY 17.90 23.63 2.88 20.20 26.50 3.16

2015 2016
Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Consensus 17.90 23.63 3.00 20.20 26.50 3.50
1 Month Change 0.15 0.00 0.00 0.00 0.00 0.00
3 Month Change 1.18 2.10 0.00 1.70 2.58 0.00

GROWTH
2014 (A) 2015 (E) 2016 (E)
Norm. EPS 18.69% 172.49% 12.16%
DPS 33.33% 50.00% 16.67%

INVESTMENT RATIOS
2014 (A) 2015 (E) 2016 (E)

EBITDA £18.30m £22.63m £25.48m
EBIT £8.20m £m £m
Dividend Yield 0.31% 0.46% 0.54%
Dividend Cover 4.34x 7.88x 7.57x
PER 75.42x 27.68x 24.68x
PEG 4.04f 0.16f 2.03f
Net Asset Value PS -47.38p 61.80p 75.10p

[mike740] 02/6/2015 16:25

CVSG veterinary services, on the verge of a breakout and next leg up. Looks dear but EPS Increase next year with bolt ons.

[pet lover] 23/5/2015 20:03

Lomax99

Big Thankyou for your post and well done here.CVS took on a huge debt to buy up these vets over the last 7 years and the market held the companies share price down as a result.As the debt has reduced and profits have gone up so has the share price.PVG looks to have had a cash shortage from day one and thus could not buy up other vets in any kind of numbers.You are also spot on with your view that the big two are going to keep on buying and expanding.CVS has seen its stock rise 200% over 7 years with rocket under the price over the last two.We will have to wait and see what PVG does but without the odd £100M plus being raised they don't have a chance in hell of buying up vets in the UK.A much safer and cheaper option would be to grow the pet plans and buying side of the group in quick order.PVG have just hired a director and talked about a global company. Have you any idea where UK vets sit in the world rankings.? In other words is the UK ahead or to the rear of other nations product / price and so on. Thanks from the hound and myself.

[lomax99] 23/5/2015 11:43

Pet lover. I will watch PVG with interest and may make an investment, interestingly I see from the prospectus that Gervais William's Miton group has a holding. I have been in CVS a long time, what attracted me was a large fragmented market ripe for consolidation, buying small practices on low PE multiples (with little alternative exit routes) and, efficiently, consolidating. CVS was originally VC funded, and aimed to employ more professional management once the industry was de-regulated, opening the prospect for non-vets to own & operate vets practices. CVS's regimented acquisitive growth has enabled it to reap economies of scale through efficiently managing the process, thereby transforming the underlying EBITDA performance of practices acquired, something they themselves could not hope to do. Pet Health plans, specialist laboratory services, online pharmacies, etc are all a logical extension to build brand loyalty and to seek/prevent leakage of extra margin.

I can see the network opportunity that PVG may have to target a generic pet health plan to the other 75% of the market, it will be interesting to see how it develops as I suspect the two lead consolidators will be looking to significantly increase their combined 25% share in the next few years - although there is probably plenty of scope for all to grow. I note reference in the PVG prospectus that their 15 practices had been an attempt by the previous management to act as a consolidator, it implies they had been largely unsuccessful at that - perhaps the new management will make a better fist of it, presumably however the main idea to focus on generic pet health plans for third party practices?

[pet lover] 22/5/2015 22:13

The pet plans make large profits and open the door to cross sell other product.The hound and I are on the look out for any company that can grow these plans at the kind of rates that CVS is doing right now. Denplan is another in the field. CVS can only sell those plans through its own vets so the total numbers of plans to be sold has a ceiling.I am not saying the pet plan growth here will slow any time soon just that their is a limit.
CVS is also growing profits in various other areas as you rightly say. PVG has got a different model selling pet health plans on behalf of other independent vets C 75% of the total market.PVG also has a buying group doing the same.To sum up if PVG can get 1,000 Vets selling its health plans over time it could take the cream of profits and margin without the massive costs of buying and running vets.Long term investors here ran the risk of very high debt in the early years but at the end of the day that proved the very time to invest. PVG is unknown it's even listed on the big board not on Aim. The hound and I want to mimic the returns here over the last few years. I would also like Mr Slater to take a look if he reads this.From the hound and myself night night.

[pet lover] 22/5/2015 21:33

The real attraction of this business is the cash generation and the ability to sell a growing number of ancillary services to customers as the number of core practices grows. While operating profit increased to £5.8m (2013: £3.8m) cash generated from operations was £12.9m (2013: £10.5m) and free cash generation £8.4m.


At the half year, the Practice Division operated 276 veterinary surgeries across the UK under a number of well-established local brands, primarily focused on the small animal market. Management estimates that CVS has an 11% share of the UK small animal veterinary market. The Group employed almost 3,000 people at the half year end

The £4.1m paid for acquisitions historically reflected EBITDA of approximately £1.1m, an attractive multiple.

Their Healthy Pet Club schemes have grown significantly with membership at 31 December 2014 in excess of 192,000 pets, an increase of almost 39% since December 2013. Income from Healthy Pet Club schemes represented 12.5% of the income of the Practice Division for the six month period up from 10.5% in the comparable period. The schemes offer discounted products and services aiming to improve clinical compliance levels amongst members and to protect practice sales by bonding pet owners to their local CVS surgery. Clearly as more practices are acquired there is a big opportunity to plug more clients into this.

lomax99.

Thankyou for your views I can agree in part but CVS Only made £5.8M from all those vets in 6 months.Profits for the company on the other hand went up by a very large amount as did the quality of those earnings. Those pet health plans added a full 2% points to the practice division. Profits have been going up in line with the rapid sale and take up of these health plans over the last few years.It can be seen that it's the add on's that are where the real growth is comming from.

[lomax99] 22/5/2015 19:50

I don't see the health pet plans being key to CVS TBH, they will however help build brand loyalty/aid retention. The key element to the CVS story is acting as an efficient consolidator in a highly fragmented market, with comparatively modest exit opportunities for retiring practice owners. Witness the modest acquisition highlighted in CVS's interims - they paid only £4.1M to obtain c. £1.1M of Ebitda(!), and that is before they streamline anything achieving economies of scale for procurement, central admin, etc, etc. The exciting thing is that the two lead consolidators still only account for c 25% of the market, so there is a very healthy pipeline indeed for future acquisitive growth.

[pet lover] 22/5/2015 09:21

I was wrong in thinking this share was overvalued one just has to look at the chart. The hound and I have done our research on these and the other two listed vets. Again I thought PETS was overvalued at its float price but has since done very well. The hound and I have gone for PVG as yet an unknown stock that came to the market through an rto in the spring. CVS is now a very large company with good management and I can see the stock hitting ten pounds within 3 to 4 years.If the truth be known I think the driving force for the profits here is due in part to the rise in its health pet plans. It's those plans that I have an idea will be the key at PVG as well.The sector as a whole is well liked for its stable cashflow.

[alexoddjob] 29/4/2015 07:57

Nb CVS Health in Baltimore is a different company

[farmsted] 20/4/2015 11:14

Coud be over valued at this level

[lomax99] 09/4/2015 13:20

Funny, I was just thinking yesterday that another sale by our CEO was long overdue, and hey presto. Also negligible impact on the SP, which on reaching new highs appears to have been marked up on the news.

[gargleblaster] 30/3/2015 19:22

Looks like another good purchase to me, the market likes it, and IC were bang on the money in their "IC view" comment above!

[gargleblaster] 23/3/2015 15:11

IC write-up

Analysts have again raised profit forecasts for CVS Group (CVSG), following a bullish set of half-year results. Charles Hall of Peel Hunt said the upgrade marked his fourth for the veterinary services group in the past year alone. He now expects full-year pre-tax profit to come in at £18.8m, giving EPS of 26p - a 6 per cent upgrade on the previous estimates and a big improvement on last year's £15.6m pre-tax profit figure.

CVS reported that adjusted pre-tax profit in the first half jumped by more than a third to £9.5m. That was driven by a 10 per cent increase in like-for-like sales as well as acquisitions: the group bought one crematorium and 10 veterinary surgeries in the period, and a further five clinics after the period-end.

All divisions performed well. Membership numbers in the Healthy Pet Club scheme swelled 39 per cent to 192,000, and the veterinary referrals and out-of-hours businesses were also star performers. Overall, sales in the core veterinary practice division grew 18 per cent to £72m, while cash profits climbed by a quarter to £13.2m. Meanwhile, the laboratory business enjoyed a 29 per cent jump in sales to £6.3m, and crematorium revenues doubled to £1.2m.

CVS GROUP (CVSG)
ORD PRICE: 504p MARKET VALUE: £298m
TOUCH: 503-506p 12-MONTH HIGH: 509p LOW: 285p
DIVIDEND YIELD: 0.5% PE RATIO: 47
NET ASSET VALUE: 58p* NET DEBT: 83%

Half-year to 31 Dec Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2013 68.8 3.2 4.6 0
2014 81.9 5.2 7.0 0
% change +19 +63 +52 -

Ex-div: na

Payment: na

*Includes intangible assets of £58.9m, or 99p a share

IC VIEW:

CVS is a big player in the veterinary services market, which is currently benefiting from an upswing in consumer confidence. We expect more growth - both through acquisitions and existing business - and so upgrade our view to buy despite the punchy forward PE ratio of 19.

Last IC view: Hold, 356p, 22 September 2014

[campbed] 20/3/2015 18:23

It's taken a while for the operating leverage and build-and-buy synergies to come through in the results. For someone who first bought these in 2008 at 250p and has added each year thereafter it is nice to see my patience rewarded and record adj EPS growth reported of 35% and the share price close at record high of over 500p.

I also like the share option charge to be included as a cost -- it's fanciful to exclude it in reporting earnings to shareholders. I agree with adjusting for amortisation of acquired knowhow and customer lists and one-off costs of acquisition but employee share options are just remuneration.

[lomax99] 20/3/2015 07:50

Excellent interim results, will add more should there be any meaningful dip.

[gargleblaster] 20/3/2015 07:38

Figures look good to me - like for like sales up 10% - debt falling considerably despite acquisitions, growth plan on track. As is highly rated never to sure how market will react - but however it does, I will be sitting tight! Good luck to all!

[gargleblaster] 12/3/2015 18:37

pet lover - not sure if I understand why having Jim Slater on board could possibly be described as a bad thing. True the price is on the high side (circa 20X forward earnings), but in my view it is a price worth paying for a good business model with the steady growth that adding "mom and pop" veterinary practices brings with it - also not much in the way of direct competition and over time economies of scale working to CVS's advantage. Bear in mind that Slater has recognized that the PEG is attractive - the high growth in his view outweighs the high rating, from a value perspective.

Can't comment on PVG, but I am in Pets at Home and I believe this will be a steady grower over time as well. Don't forget both co's feed into the quaint British "love of pets dynamic"!

[pet lover] 12/3/2015 18:09

This share has had a great run but for me it's just getting to big and with Slater in its now all in the price.
Have no doubt it will still produce year on great results but at a slower rate.
I never liked Pets At Home as not a pure vets as such so one never knows if one part of the company is holding back another. Also dislike the group that sold out in the IPO asking and getting top wack.

I noticed another vet came to the market last week through the back door Reverse take over.
It's traded under the epic code of PVG.
From what one can read it's had all the growing pains of a small outfit trying to grow very fast.
What caught my eye was that it's not just got 15 vets but also built up a vet buying group plus it sells on behalf of other vets a pet health plan. The gross margins in that part of PVG are very high way higher than the vets themselves.

PVG comes in at £8M and has made a loss to date. It also has some loans that charge 12% linked into the big shareholder.thats one thing I do not think much of I have to say. They have just landed a very high flying non ex director and on the same day the shares shot up.PVG put out the RNS and talked of being a global company.

If any of you have time would you be kind enough to run the slide rule over it TA.