Cvs Share Discussion Threads

[compoundinge] 01/3/2019 10:24

Why up? Acquisition continues in this hot space, JAB’s Acquire USA Compassion-First Pet Hospitals, which operates 41 veterinary hospitals and emergency clinics in the US, values the company at $1.2bn. And recently seems Goldman Sach increasing stakes in the company. The market cap of around 350million pounds seems undervalued if benchmarking to other recent deals.. Just look at MARS...

[arcticblast01] 28/2/2019 21:10

Dont try and catch a falling scalpel blade.

[mccookie] 25/2/2019 12:43

Looking at Glassdoor reviews of how CVS management are running things at the moment gives a good indicator of employee engagement. Have to say does not make good reading... clearly retaining staff in particular vets is key to growth against competitors. Many negative comments about senior management. I think other PE ran vets are more attractive at the moment. I don’t see Amazon entering the Vet marketplace- more likely to take CVS is Mars/pedigree who are already significant having taken a number of vet companies and have the scale and background already to do so having ran multiple vets in the US.. that said the business needs to be well run and an attractive proposition which I cannot see at the moment or any noise from CVS to attract investors to believe otherwise.

[j0sekl] 17/2/2019 10:27

Dignity is a different situation at the moment because there's disruption from online competitors. I think Amazon went in. This is not the case with the vetinary industry but CVS need to have their portal set-up and strong on advertising. They do need some data gathering for market intelligence to be strategic about where they buy. I am looking for them to become so well run that if Amazon did want to enter they buy up CVS instead of compete.

[j0sekl] 17/2/2019 04:53

This is a moment to see CVS's management quality as they face increased labour costs and there are now more PE-backed competitors in the market. I think it's an advantage they hold the biggest market share but I will not give them the chance of another slip-up. I am a late investor that came in predicated on their continual growth and margin conversion.

So what am I looking for,
1. Whether they understand not overpaying for M&A
2. How they'll focus on financial strength as well as growth
3. Demonstrate they can outshine some respectable competitors.

These have always been the data points but now is decision time. I want to see them set decent targets and not overpromise, which is the curse of growth companies.

[kemorkid] 05/2/2019 13:40

That’s what I thought at the time .
I still think long term these will be
ok.

[gilessaint] 05/2/2019 02:05

On 4th December Kemorkid, you stated it was a good entry point!CVS shares have just further crashed by another 1/3 leaving your credibility shot and anyone who took your suggestion nursing very heavy losses!

[kemorkid] 31/1/2019 21:31

I agree winky

[p winky] 31/1/2019 18:28

Time to double down,.

[kemorkid] 31/1/2019 16:58

Encouraging to see CEO’s and Finance directors wives buying shares along with the chairman.

[mccookie] 30/1/2019 09:50

Yes I have just cut and run. With brexit as well the pool of vets wanting to come from overseas will be less going forward which will drive salaries higher I would assume, I cannot imagine this improving anytime soon.

[bulltradept] 30/1/2019 09:42

Sometimes it's better to take the loss than take a bigger one further down the road.

[mccookie] 30/1/2019 09:37

I’d have to agree with the above- the statement more or less says our costs in particular payroll are increasing at a greater rate than our sales, however are still focussed on aquisitions.

If sales growth is driven by aquistitions that would suggest the vet businesses taken over by CVS are declining year on year significantly and the aquisition pipelines is propping the sales number up.

Hopefully they get taken over and I can recover my losses!!!

[mccookie] 30/1/2019 09:26

These shares have cost me a fortune! The downward trend is very worrying.

[runthejoules] 29/1/2019 11:57

Another victim of Brexit. Still cash-generative, just going to hang on for a turnaround or a takeover now. :-(

[florenceorbis] 29/1/2019 09:59

RNS Number : 3337O

CVS Group plc

29 January 2019

29 January 2019

CVS Group plc

("CVS" or the "Group")

Trading Update

CVS, the integrated veterinary services group, provides the following update on headline trading in respect of the financial half year ended 31 December 2018 (H1 2019).

H1 2019 Performance

In H1 2019, the Group's total sales increased by 23.7% and like for like sales ("LFL")(1) increased by 4.0% both compared to the financial half year ended 31 December 2017 (H1 2018).

Within the Practices Division, sales have increased by 23.9% and like-for-like sales have increased by 3.2% compared to H1 2018. In addition, Laboratory Division sales increased by 6.3%, Crematoria Division sales increased by 11.3% and Animed Direct sales increased by 16.2% compared to H1 2018.

Gross margins(2) for the Group in H1 2019 were 76.2% compared to 79.5% in H1 2018. This reduction is entirely due to an increased mix of Farm business for which margins are lower. Sales from Farm practices now represent 8.9% of group sales in H1 2019 compared to 3.2% in H1 2018. Gross margins in our small animal practices have increased to 81.3% in H1 2019 compared to 80.9% in H1 2018.

As a result of a number of actions taken, CVS continues to see a gradual improvement in clinical vacancy rates for both vets and nurses compared to the start of the financial year. However, as previously highlighted the Group remains heavily reliant on locum cover given the continuing industry-wide shortage of vets. Consequently, employment costs in H1 2019 are well above H1 2018 due to the increase in sales as noted above, combined with above inflation salary increases and a significant increase in market rates for locums.

Over the past two years, CVS has acquired 24 practices in The Netherlands and has diversified into Farm and Equine practices. Early performance from these newer divisions has been disappointing with financial results falling short of our expectations. In all these divisions, financial performance has been adversely impacted by the poor support of pharmaceutical companies and we continue to push for transparent and appropriate pricing.

In light of the above and certain other cost increases, the Group expects to announce EBITDA(3) for H1 2019 that is broadly flat compared to H1 2018.

As at 31 December 2018, CVS had net debt of GBP116.8m and bank covenant leverage(4) of 2.4x. The Group remains comfortably within its covenants and continues to generate positive operating cashflow.

Outlook

Given the financial performance in H1 2019, CVS now expects full year EBITDA to be materially below current market expectations.

A number of cost savings have been identified across the Group and these are expected to generate savings both in H2 2019 and in the remainder of calendar year 2019, with ongoing effect thereafter. In conjunction with cost savings, additional procedures have been implemented over the employment of locums in practices and the Group expects to see a reduction in locum costs in the remainder of the financial year as a result.

Acquisitions

Further to the Trading Update issued on 29 November 2018, the Group completed the acquisition of three further practices in the first week of December 2018, for combined consideration of GBP5.0m. No further acquisitions have been made since that time.

The Group believes that acquisition multiples being sought by practice owners are increasingly above levels which will deliver acceptable financial returns. Whilst the group has a further pipeline of acquisitions, for which terms have been agreed in principle, the Board is re-evaluating all acquisitions and particularly the multiples it is willing to pay.

Interim Results

The Group expects to announce its interim results, for the six months ended 31 December 2018, on 29 March 2019.

[kemorkid] 04/12/2018 10:05

Looking good entry point

[lomax99] 04/12/2018 09:53

Now Goldman Sachs in for 6%....

[lomax99] 03/12/2018 10:10

Good to see Echo Street Capital Management take a decent stake.

[p winky] 30/11/2018 05:56

I'm working in the pet industry as such, when older vets retire, they generally sell out to cooperates, CVS being very popular, the fact they bought the neighboring large animal practise near me a few years ago and continued to stay open surprised me from the rural farm vet staffing shortage, they have a model that works. It's harder for individual to take over practises due to financial and staffing issues, we as a nation of pet lovers, cannot get away from the emotional substitutes that our pets become when we have less family and other human companionship. If the finances stay true then this seems a long term safe investment