Premier Veterinary Share Discussion Threads

[hibberts] 18/4/2015 12:05

Good find.
Our share price seems to be holding up very well I might have another dabble next week as we could see a move up in the not to distant future.

[pet lover] 17/4/2015 07:31

CVSG the only pure vets bar PVG have gone mad in the last week or two and now stand on a pe of no less than 25 and cost £6.00 a snip.Shares Magizine the low end rag for investors put out buy report on them yesterday. The hound and I hope that the same investors who have pushed up the rating for those stocks will take a sniff here.Time for a run down to the stream, boy do I hate picking up the hounds dump heaps years ago we all left it on the ground.

[pet lover] 04/4/2015 18:38

I put this up as post no 1 as it has proved to make me and the hound heaps of pound notes over the years. Slater knows the value of investing in the likes of CVSG. PVG Needs to get the recurring revenues growing at a rate above the other listed vets. If it can do just that then they will be rewarded.The hound and I want to invest at the right time not after the growth has shown up in the P and L account.PVG have to deliver in the next 3 years or the shares will not move.


2014 June 22
RECURRING REVENUE COUNTS IN INDUSTRIES FAR BEYOND SOFTWARE
Posted by Alan Fullerton in Advice for Entrepreneurs, Government/Defense/Aero, Healthcare, Industrial, Mergers and Acquisitions, Selling a Business, Strategic Advisory, Telecom & Networking, Valuation Services

The recurring revenue (“RR”) business model gets a lot of attention in software M&A and growth investment, and for good reason. Most growing subscription/ software-as-a-service (SaaS)-based software companies trade in the public markets for north of 6x revenue and many of those fortunate few with annual revenue growth over 40% trade for over 10x revenue. The value of the recurring revenue service model in the software industry is indisputable. But what about other industries? Telecom, healthcare, distribution, banking, music and video, even large capital businesses such as jet engines, have all incorporated recurring revenue in their “business-as-a-service” model.

The predictability of revenues and earnings is inherently better in a business with recurring revenues. Subscriptions, razor / razor-blade models, rentals, leases, monthly fees, ongoing maintenance and support contracts, customized consumable products, etc. all drive more predictable revenues than, say, capital equipment sales. The RR business starts each year with a set of returning customers, purchasing a contracted or otherwise predictable level of products or services. These customers return for reasons well beyond mere convenience – they rely on the RR business for their own operations and cannot easily switch to another vendor or service provider, or are contractually obligated to continue with the vendor for a period of time. For virtually all elements of competitive advantage that relate to customers, the recurring revenue business model enhances that advantage, creating more value for the RR business’s shareholders.

Examples of recurring revenue models outside software include:

contracts for IP phone services,
healthcare regulatory-driven services and products consumed in GMP environments,
vendor managed inventory,
wealth management,
Spotify and Netflix, and
GE Aviation’s parts, maintenance, financing and service contracts.
These are all examples of recurring revenue business models applied to industries beyond software.

It’s our experience that businesses incorporating recurring revenue in a significant way can trade for multiples well above those in their respective industries that do not. While the software industry may trade on multiple of revenues, much of the rest of the word focuses on some combination of EBITDA, free cash flow, and growth (and cost of growth). The value from a RR model can be seen in the more modest sales effort necessary to maintain and grow the business, and the better margins that can be achieved for the same level of growth. The company with little in the way of recurring revenue starts each year at $0 and builds from there; 100% of the sales effort is aimed at bringing in new customers and perhaps the first 11 months of the year are spent getting to the same revenues as the prior year, so that the last month generates 8% annual growth. The RR business starts with a base of business. For some of our clients that has meant zero or negative churn – the expansion of returning customers – with a modest sales effort aimed at those clients – more than makes up for any customer attrition. It’s our experience that these companies grow faster with less sales effort, and therefore drive more profit margin, than companies lacking a recurring revenue component. For closely-held companies, this can mean achieving double-digit revenue growth while maintaining 20%+ EBITDA margins, something only about one in sixteen public companies has managed (without acquisitions) in non-tech, non-financial industries this past year.

[ginger_ninja1] 04/4/2015 11:59

Good post Pet Lover, some interesting reading. I would be very happy if PVG could replicate the results of CVSG!

[pet lover] 29/3/2015 16:22

These pet plans seem to be the in thing. PVG has 31,000 plans running as of March 2014 and expanding them through Europe something CVS is not doing as they say the time is not right. The hound and I can see this very large market and we like what we see.




27/03/2015
Healthy Pet Club membership hits 200,000
CVS is celebrating a landmark after membership of its client loyalty scheme topped 200,000.

Receptionist Louise Crawford, Sheri Miller with Mowgli and VN Sara Woods.

The Healthy Pet Club (HPC) is now the biggest veterinary loyalty scheme in the UK after hitting the landmark when Sheri Miller from Lowestoft, Suffolk signed up her Labrador retriever, Mowgli, at The Veterinary Hospital in Lowestoft on March 11.

She was delighted to become the 200,000th member and was awarded a year's free membership.

She said: "The HPC has proved very good value for money. It gives me peace of mind knowing through my monthly payments, Mowgli's flea and worm treatments and vaccinations are all covered."

Barry Brackner, commercial and marketing director at CVS, added: "With the market for veterinary services so competitive, clients are looking for value and will soon move elsewhere if they don't feel they are getting it.

"This makes a loyalty scheme increasingly a 'must-have' for practices and our Healthy Pet Club is certainly achieving its goals, both in terms of building revenue and improving the welfare of our clients' pets.

"Word seems to be spreading about the HPC because many of our new members tell us they are joining following a recommendation from a friend, and this is particularly satisfying.

"Reaching the 200,000 membership mark is exciting, but we have no intention of standing still and are constantly looking at new ways to develop the HPC."

[pet lover] 26/3/2015 07:09

The hound and I have now got the hang of this copy and paste.PVG are worth less the all the above companies a lot less.In the press release when that new director joined the company they said they were going global.It strikes me and the hound the buying group and pet plans can get big very fast as each new vet group is signed up around Europe and the world.The prospectus is all we have to go on so far I like those gross margins I like the recurring revenue just as much.

[hedgehog 100] 25/3/2015 20:33

Four related companies to Premier Veterinary Group(PVG):


Animalcare Group (ANCR) 192.5p Market cap. £40.46M.





CVS Group (CVSG) 518p Market cap. £306.5M.





Eco Animal Health (EAH) 202p Market cap. £127.55M.





Pets At Home Group (PETS) 250.1p Market cap. £1,250.5M.

[pet lover] 24/3/2015 13:22

Rather out of date.

[pet lover] 23/3/2015 15:33

Would be great if PVG could get to this amount of profit within five years.


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

[pet lover] 20/3/2015 18:59

Not sure if they would do that as those vets have been and are the training ground for the whole group.
CVS stormed ahead today but has only doubled since 2008.The highlight of CVS results today were those pet plans that the hound and I like a great deal. Win win for all. Reading the PVG prospectus very long winded I must say we are informed that those pet plans are now being sold outside the UK.If PVG has a head start in that market going global then we might see stunning results as market share is grabbed while others sleep.

[hibberts] 20/3/2015 14:06

They might put the vets practices up for sale so as to conserntrate on the fast growing part of the business the cash will come in very handy.

[pet lover] 20/3/2015 10:01

CVS results today.With a current market capitalisation of £275m and trading at just under 22x full year estimates for the year ending June 2015 the shares are richly valued but the attractive cash generative attributes and consistent performance over the past few years has its obvious attractions. Furthermore, there still appears to be huge growth potential from their growing portfolio of services.

I hope that PVG will trade on this kind of PE.Each of the two companies are growing their pet plans that produce much higher margins than the vets do by themselves. PVG should grow even faster with less cash required if it does what I want it to expand the buying division and pet care plans. I do not see the need to expand the number of vets for little gain. CVS results have gone down well today.

[pet lover] 16/3/2015 13:20

Very interesting. Shares and companies that have growing recurring is what me and the hound want. I don't think investors have ever thought of this in the terms of vets.often it's software or insurance. The posting above sees it from the vets point of view a good one at that. I never thought of vets till I came across these pet plans. It's not insurance so do PVG do not run risks that I would steer clear of as an investor.For the vet it must be the cashflow and extra visits that makes it worth his while and more profit but I bet some vets can not sell for the life of them. PVG has 15 vets but to me they are not much more than a great deal of work for returns that one could get from any share over the long term. PVG is on both sides of the fence vets and the running / administration of pet plans and a buying group for a fee. For its size PVG might buy 2 vets and year for the next two years then 5 for the next two and so on. I hope they will not do that but put any investment into the buying and pet plan division of the group.The buying and pet plan side can move forward at a pace I dare to say 30% plus as they have been doing to date or even more something a new vet practice could never do.The hound and I only want quality recurring earnings. We also want to know at the start of each year we have revenues pouring through the letter box no matter what. PVG has those big margins of 97% so it makes perfect sense to move that side of the group into top gear.so long as the profits start to show PVG should prove to be a good thing. I hope.

[ginger_ninja1] 16/3/2015 10:03

Some interesting reading for everyone.

[hedgehog 100] 15/3/2015 15:58

PVG is actually a main-listed company, not AIM.
As was AKT, the shell that was reversed into here.

So it would have been ISA eligible even if AIM shares hadn't been allowed into ISAs (permitted from August 2013.).

[hibberts] 15/3/2015 11:37

I use TD waterhouse and they don't recognise them in an ISA so i will have give them a ring.

[bigglesbingham] 15/3/2015 11:18

Shares are available within isa

[pet lover] 14/3/2015 19:28

Just got the link up in the header as well.
Mr hedgehog you have made my day i can now do that at work the women will blown away.

[hedgehog 100] 14/3/2015 19:24

Thanks Pet Lover.