Cvs Share Discussion Threads

[the dogsbody] 29/11/2018 13:43

The effects of both the new Lucy's Law and the Animal Welfare regulations kicking in is going to mean a massive decline of the amount of puppies allowed to be bred.

Consequently Clients of CVSG Vet Practices are going to have a lot of Clients who can no longer afford to buy or even find a puppy to purchase. Over time this must mean a lot less dogs to be treated by Vets.

[lomax99] 29/11/2018 13:21

Shares magazine today:

CVS warns on margins as staffing costs soar

Shares in veterinary services group CVS (CVSG:AIM) slump 13.2% to 630.5p on the disappointing news soaring rates for temporary veterinary staff and other rising costs are hurting its margins.

CVS says earnings before interest, tax, depreciation and amortisation (EBITDA) margins will be lower than last year as it is relying more on temporary staff despite lower vacancy rates.

Unfortunately for CVS, skilled and temporary veterinary surgeons come at a high price. Day veterinary locum rates are currently 14% above the same period last year.

STRONG GROWTH IN VETERINARY PRACTICES

The good news is all divisions are delivering growth in revenues with overall like-for-like sales climbing 4.7% in the four months to 31 October compared to the same period of 2017.

In the company’s biggest division representing nearly 90% of sales, Veterinary Practices, like-for-sales grew 3.8%.

The Healthy Pet Club continues to attract new members keen to take advantage of loyalty benefits, regular health checks and discounts on pharmaceutical products.

IS CVS A POTENTIAL TAKEOVER TARGET?

Acquisitions are a key part of CVS' growth strategy and several more are expected to complete over the next couple of months as the company consolidates a fragmented industry, although persisting share price weakness could stoke speculation that CVS itself may become a takeover target.

Here in August, we considered whether the long-term predator could become prey, noting that Whiskas pet food owner Mars Petcare had acquired UK services group Linnaeus and BC Partners had bought VetPartners.

[wilsonst1] 29/11/2018 11:09

So happy directors managed to sell at 910 only a few weeks ago.

[tsmith2] 29/11/2018 08:41

That's a profits warning

[rafieh] 29/11/2018 08:17

It does appear that the market reads it as a profit warning.

[lomax99] 29/11/2018 07:55

Priced in? - who knows, would have thought so. A bite sized chunk for someone?

[lomax99] 29/11/2018 07:53

Undoubtedly, as they only ever tend to focus on any negatives. No need to focus on any positives - lfl sales growth, improving performance of recent acquisitions, strong pace of acquisition, healthy pipeline, ongoing/recent initiatives to improve retention and recruitment, etc.

[p winky] 29/11/2018 07:52

Recent dropped priced in?

[smokybenchod] 29/11/2018 07:50

Can’t figure out if this is a profit warning or not

[rafieh] 29/11/2018 07:15

The market is likely to focus on this part of the statement:' These factors have resulted in increased employment costs which, together with certain other costs, are resulting in lower EBITDA(2) margins for the Group in the current financial year compared to the prior year.'

[lomax99] 28/11/2018 20:08

AGM statement in the morning, hoping it will be well received.

[rob762243] 20/11/2018 16:23

Most likely due to uncertainty around brexit is my best guess

[p winky] 20/11/2018 15:50

No news, why is this getting a beating?

[rob762243] 25/10/2018 14:14

Not looking good don't understand why this is underperforming

[lomax99] 24/10/2018 14:37

Adding a few here.

[lomax99] 24/10/2018 14:16

Not a surprise in any way, shape or form - this has been on the cards for quite some time. Come on, they should not be shy, give us some profit numbers, and sell us the growth opportunity to justify whatever eye watering PE you are hoping to offload this for......

[runthejoules] 24/10/2018 13:39

With it down this low, surely someone's got to stick a bid in for it. Holding.

[speedsgh] 24/10/2018 13:14

Peer news...

Owners groom European vets giant IVC‎ for £1.5bn sale -

EQT Partners has asked bankers at Jefferies to find a buyer for Independent Vetcare and its 300 UK practices, Sky News learns.

The owner of Britain's biggest chain of veterinary surgeons is preparing to ‎sell it for well over £1bn in a deal that would eclipse the biggest takeover to date in the sector.

Sky News has learnt that Bath-headquartered Independent Vetcare Group (IVC) is seeking offers in the coming weeks that would herald a change of ownership for more than 300 practices across the UK.

Jefferies, the investment bank, has been hired by EQT Partners, IVC's controlling shareholder, to run an auction of the business.

Insiders said that offers, which are being sought in the first week of November, could value the company at up to £1.5bn.

If successfully completed, a sale would come with a richer price tag than the roughly £700m paid by buyout firm BC Partners in August for VetPartners, another big operator.

IVC operates in a number of other countries including Sweden, where it merged last year with Evidensia Group, another significant player in the market.

The fragmented nature of the UK industry 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.

One of takeovers in the industry in recent months saw Mars, the confectionery-to-petfood conglomerate, acquiring control of Linnaeus.

[lomax99] 15/10/2018 08:22

Interesting to see a hedge fund stick their head above the parapet as a holder - Half Sky Master Fund have just confirmed a notifiable holding.

[gilessaint] 14/10/2018 03:24

I’m increasingly finding it hard to keep the faith with CVS Group, CVS (Veterinary Services Provider). The share price enjoyed some really positive gains but in the last 12 months has lost half its value. My major concern is that CVS senior management are made up of the same directors who run Dignity Funerals UK (Stock DTY) and CVS group directors at one time “held up” Dignity Funerals as a like business and benchmark for which they were going to strategically follow. Essentially, instead of funerals business growth acquisitions, CVS were buying up veterinary services businesses. Dignity stock similarly crashed a year ago, going down a staggering 70 percent. The UK funerals business is suffering from poor publicity and severe pricing challenges and competition challenges, also changes in the ways people select and choose their funeral/undertaking options for their loved ones. As an investor/stakeholder in CVSGroup Vets, I see many risks and challenges to their business model that will ultimately render them in the slow lane of profits growth and controlling costs from their inherited bricks and mortar estate, grappling with regulation from their regulatory body (RSVS). Also retaining talented skilled staff and keeping them motivated and preventing the competition from popular experienced vets setting up profitable dedicated surgeries in competition to the CVS behemoth!

[runthejoules] 04/10/2018 12:13

Shares mag still positive - I recommend susubscribing.

CVS (CVSG:AIM) 948.5p

Gain to date: 2.4%

Original entry point: Buy at 926.5p, 23 August 2018

Our ‘buy’ call on veterinary services provider CVS (CVSG:AIM) is modestly in the money and we’re staying positive on the stock.

Resilient full year results (27 Sep) and management’s positive overall outlook for the business are reassuring, although challenges with retaining and recruiting vets may continue to weigh on investor sentiment.

Solid results for the year ended 30 June revealed 20.4% top line growth to a record £327.3m and 7.1% growth in adjusted pre-tax profit to £36m, with the cash generative veterinary industry consolidator also declaring an 11.1% hike in the dividend to 5p.

Robust like-for-like growth of 4.9% was boosted by an exceptional performance from online drugs arm Animed Direct, while the jump in group sales reflected last year’s acquisition of 52 surgeries.

Vet staffing is proving a significant challenge for CVS, yet industry-wide salary pressures should necessitate price increases to pass on increased costs. We believe concerned pet owners should readily accept these price increases, potentially boosting CVS’ organic revenue growth through the year.

[lomax99] 28/9/2018 19:56

IC today:CVS still offers growthAnnual adjusted cash profits of £47.6m for veterinary practice operator CVS (CVSG) fell slightly short of broker Peel Hunt's estimates. The impact of heavy snow earlier this year, combined with higher wage costs, offset an otherwise strong top-line performance, with like-for-like sales rising nearly 5 per cent. The underperformance of recent acquisitions – largely the result of staffing issues – was also disappointing, although analysts remain confident the business can get this under control during the current financial year.Last year, CVS acquired 52 surgeries, and bought another 16 post-period-end, taking the estate total to 491. Together, the acquired businesses contributed £18.9m-worth of revenue. But adjusted cash profits as a percentage of sales fell from 18 per cent to 16.9 per cent, suggesting income struggled to find its way to the bottom line.For now, analysts at Peel Hunt still expect pre-tax profits of £47.2m for the year ending June 2019, giving EPS of 55.6p, moving up to £50.6m and 58.7p in FY2020.IC ViewHigher wages and staff shortages continue to be challenging, but cash flow rose to £46.7m thanks to improved profitability. That suggests CVS still has decent firepower with which to pursue more acquisitions at a decent price; Peel Hunt reckons recent deals have been struck in the region of 10 times cash profits, relative to much pricier takeovers in the sector. Even better, the shares' 17 times forward earnings price tag also signifies a potential value opportunity. Buy.

[lomax99] 28/9/2018 08:13

Shares magazine

Vet CVS remains in rude health

Veterinary services provider CVS (CVSG:AIM) scurries in with very resilient full year results and management sees a ‘very promising’ outlook for the business. Despite the squeeze on UK consumers’ disposable income, the Diss-headquartered concern says like-for-like sales growth has ‘remained robust since the year end’.

Yet the shares are off 2.8% at 994.5p as Brexit-induced European vet recruitment challenges continue to weigh on sentiment. Nevertheless, CVS believes its exposure to the potential impacts of Brexit ‘appears to be limited’ and says it has ‘not seen any significant impact on employment so far’.

DEMONSTRATING RESILIENCE

Results for the year ended 30 June from CVS, a recent addition to our running Great Ideas portfolio, reveal impressive 20.4% top line growth to a record £327.3m and solid 7.1% growth in adjusted profit before tax (PBT) to £36m.

The cash generative veterinary industry consolidator also declares an 11.1% hike in the dividend to 5p.

Last year, strong like-for-like growth of 4.9% was boosted by an exceptional performance from online drugs arm Animed Direct, with group sales enhanced by the acquisition of 52 surgeries.

In addition, CVS’ high quality Healthy Pet Club loyalty scheme operation continued to grow like topsy.

RISING TO THE CHALLENGE

However, CEO Simon Innes concedes that a number of acquisitions ‘have encountered the staffing challenges experienced in the wider business leading to a lower than anticipated level of sales. Conversely, some locations have taken on additional staff in anticipation of increased sales which have not materialised to the extent anticipated.’

Seeking to soothe sentiment, Innes also insists that ‘action has been taken to address the issues and the performance of the acquisitions is expected to recover to more normal levels in 2019.'

Addressing the Brexit threat, CVS says: ‘We have not seen any significant impact on employment so far but, together with other major employers in the industry and the Royal College of Veterinary Surgeons, we are lobbying the UK Government to mitigate against any such potential adverse impacts. Clearly, Brexit issues create some uncertainty for the pace of growth in the UK economy over the next couple of years, but the board believes that the characteristics of our business make it relatively resilient.’

[lomax99] 20/9/2018 08:15

Interesting, L4L increases will filter through over a period. Can you post up a link to the benchmarking data you refer to?

I note that you say you are involved in the business area - out of curiosity is that either for, or related to, any of the PE backed groups?