Description of CVS’ business

CVS Group Plc is one of the Leading veterinary services provider in the UK. The Group has four main business areas: veterinary practices, diagnostic laboratories, pet crematoria and Animed Direct, our online business. The passion of our people for animals and for making your pets our priority is at the heart of our work every day. CVS operates 256 surgeries, usually trading under local business names. These surgeries include three locations which are wholly referral practices providing first class specialist treatment. We have also launched Pet Medic Recruitment business which recruits locums and permanent staff for both our own and third party practices and a buying group known as Mi Vet Club. During the 2013 we began the development of our own brand, MiPet, products. The first two products, Pro-bind (a gut protective) and Active+ (a joint supplement), were launched in July 2013. The own brand label will protect our market as well as our margins and, whilst the initiative is currently limited in scale, further products will be developed during 2014.

CVS(UK)Limited was established in August 1999 to acquire and operate veterinary practices which were well established within their local communities and had a reputation for high quality service. The Company strategy recognises that the value of veterinary businesses lies in the quality of their staff and the relationship they enjoy with their existing clients.




Professional management expertise and other services are therefore provided centrally to all Group practices, relieving them of their administrative burden and enabling local staff to concentrate on clinical care.

The Directors believe that several factors are currently contributing to a growth in the market for veterinary services in the UK, based on growing and ageing pet populations, advances in veterinary medical science, changes in the demographic profile of the human population and a growth in the pet insurance industry.

Building on these underlying growth prospects, and capitalising on other drivers that are encouraging vets to sell their practices to corporate operators, CVS has expanded by acquisition into the market and established a leading position as a national consolidator and operator of veterinary practices and laboratories.

CVS is incorporated in England and currently operates in England, Wales and Scotland.

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Jim Slater - CVS Group

CVS operates veterinary practices and diagnostic businesses throughout the country. Britain’s pet population continues to grow rapidly, as do the profits of CVS. The interim results for the six months ended December 31 were excellent and for the full year ended June 30 the consensus forecast for earnings per share is 23.6p, against 8.7p last year.

I took profits on CVS when to my mind the forward p/e ratio became too demanding in relation to the then forecast 2016 earnings per share growth rate of 12pc. This was a mistake as since then the shares have risen and so has the consensus forecast growth rate.

At 650p the prospective p/e ratio is still lofty at 23 so I am tempted to rate the shares as a sell. However, a trading update on July 27 indicated that like-for-like sales were up by 6.8pc and the company’s broker, Singer, says “expansion is accelerating”.

I believe that CVS is a great growth stock and although the price has run ahead of itself the shares should be held for the longer term.

I should point out here that for IHT purposes it is not necessary to hold the same share for the entire two-year qualifying period.

Relief from death duties is not lost if investors dispose of qualifying shares and replace them with other qualifying shares (certain types of firm, such as investment companies, do not qualify for the IHT relief).

However, to qualify for continuing relief the whole of the sale proceeds must be used to purchase the replacement shares. HMRC is generous with the time allowed for reinvestment – sale and purchase only have to take place within three years of each other.

So, for example, if you decided to sell some of your shares in CVS, you could replace them with more Restore shares or any other qualifying Aim stock.

An attractive bonus – in addition to the capital gains from my suggested IHT portfolio (hopefully tax free in an Isa) – there is exemption from 40pc death duties on the value of the shares.

Preliminary results

· Revenue up 17.0% to £167.3m

· Like-for-like sales growth for the Group of +6.8%

· Animed Direct revenue up 21.0% to £10.3m

· Healthy Pet Club members up over 32% to 213,000

· Adjusted EBITDA up 25.9% to £23.0m

· Adjusted earnings per share up 30.0% to 24.7 pence per share

· Acquired and integrated 29 surgeries during the year

· 8 surgeries acquired after the year end

· Now operate 298 surgeries

· Acquired Whitley Brook Crematorium for Pets Limited

Acquisition of Alnorthumbria Veterinary Practice
RNS
RNS Number : 8156A
CVS Group plc
01 October 2015

1 October 2015



CVS Group plc

(the "Company" or the "Group")



Acquisition of Alnorthumbria Veterinary Practice Limited ('Alnorthumbria')



CVS, the UK's leading provider of integrated veterinary services, is pleased to announce that on 30 September 2015 it acquired the entire issued share capital of Alnorthumbria, a provider of veterinary services in the North East of England comprising nine surgeries (the "Acquisition").



Alnorthumbria was founded in 2007 by the merger of two well established Northumberland practices, the Aln Veterinary Group and The Northumbria Veterinary Partnership. It operates nine sites across Northumberland at Amble, Fairmoor (two sites), Rothbury, Seahouses, Alnwick, Wooler, Ashington and Ponteland. Alnorthumbria employs 24 professional vets and over 100 staff in total.



In the year to 31 March 2015, Alnorthumbria generated turnover of approximately £5.7 million. Approximately 50% of turnover is from small animal work, 35% from large animal work and 15% from equine business. For the same period, Alnorthumbria generated an adjusted earnings before interest, tax and depreciation and amortisation of approximately £0.9 million and an adjusted profit before tax of approximately £0.8 million. Alnorthumbria's reported profit before tax for the year ended 31 March 2015 was £1.2 million, excluding dividends paid to the owner managers.



The maximum total consideration for the Acquisition is £7.7 million including costs. This figure is subject to adjustment based on the working capital and indebtedness of Alnorthumbria as at 30 September 2015.



£6.6 million of the consideration was paid in cash on completion. £0.9 million of the consideration is deferred and will be paid in two equal annual tranches, provided that turnover for the large animal and equine business acquired with Alnorthumbria remains above the level achieved for the year ended 31st March 2015. Further deferred consideration of up to £0.2 million will be payable if the total turnover of Alnorthumbria in the two years following the Acquisition is more than 111% above that for the year ended 31st March 2015. The consideration for the Acquisition will be paid using the Group's existing bank facilities.



Intangible assets and goodwill of approximately £6.7 million are expected to arise on acquisition.



Commenting, Simon Innes, Chief Executive Officer of the Group, said:

"Alnorthumbria is a strong fit with the Group's existing operations, significantly increasing the Group's presence in the North East and enhancing our large animal and equine business. As part of the CVS Group, Alnorthumbria is expected to benefit substantially from better purchasing power as well as overhead synergies."

IC -

CVS is pick of the litter
It’s hard to fault the latest figures from veterinary practice business CVS (CVSG). Strong sales growth helped boost adjusted cash profits by more than a quarter to £23m. Most of the top-line growth can be attributed to strong underlying demand – like-for-like sales rose 6.8 per cent – but a series of acquisitions also boosted the numbers.
In the year to June CVS added 29 surgeries to its estate and one more crematorium. In total these businesses should generate more than £24m in annual sales for the group, having added £7.7m to revenues and £1m to cash profits during FY2015. Since the year-end the group has bought an additional eight surgeries, including a new ‘referral centre’ in Castle Donnington. By referral centre management means a clinic akin to a pet hospital to which vets can refer pets with more serious ailments.
CVS divides its business into four parts: veterinary practices, laboratories, crematoria and Animed Direct – its online retail site for pet medicines. The practices are considered the backbone of the business, and last year like-for-like sales there rose 5.6 per cent. The group’s booming loyalty scheme – Healthy Pet Club – may have helped drive organic growth. Over 51,000 pets were added to the scheme, boosting member numbers by 32 per cent to 213,000.
The laboratories and crematoria divisions posted like-for-like sales growth of 11 per cent and 12 per cent respectively.
Bosses admit that last year’s performance included an exceptionally strong first half, and like-for-like growth has slipped since the start of the new financial year. Yet analysts at Peel Hunt have still nudged up their forecasts. The brokerage now expects pre-tax profits of £22.2m (previously £21.5m) for FY 2016, giving EPS of 30.5p (previously 28.8p), compared to £19.4m and 27.1p for the year ended June 2015.
This isn’t the first time analysts have raised their profit expectations for CVS – a point that is clearly reflected in the shares’ strong performance over the past year. The stock doesn’t come cheap on 22 times forward earnings, but the company’s growth story – based on both the nation’s love of animals and the opportunity for consolidation within a fragmented sector - is sustainable. We remain buyers. HR
Buy

aims-best-companies-confirmed

Company of the year

CVS

Vet practices consolidator CVS (CVSG) celebrates its eighth anniversary on AIM by winning the coveted AIM company of the year award. The share price has nearly trebled since CVS joined AIM and it has successfully used its share quotation to help finance a consistent stream of acquisitions of vet practices. The sector is still highly fragmented even though CVS has a strong relative market position. The £7.7 million acquisition of Alnorthumbria Veterinary Practice takes the number of surgeries to 307. The acquisitions, development of online operations and the launch of the Healthy Pet Club, which brings in regular revenue, have helped propel profit higher and Peel Hunt forecasts a 2015-16 profit of £22.7 million, rising to £24.5 million in 2016-17. I thought Clinigen, admittedly the newest AIM company on the shortlist, would win, but its chief executive Peter George won entrepreneur of the year instead (see below).

Acquisition of Highcroft Pet Care
RNS
RNS Number : 3316D
CVS Group plc
26 October 2015

26 October 2015



CVS Group plc

("CVS", the "Company" or the "Group")



Acquisition of Highcroft Pet Care Limited ("Highcroft")



CVS, the UK's leading provider of integrated veterinary services, is pleased to announce that has acquired the entire share capital of Highcroft, a provider of small animal veterinary services in the Bristol area comprising 13 surgeries (the "Acquisition"). Completion took place on 23 October 2015.



Highcroft has operated from its main site in Whitchurch, Bristol since 1982, which the Royal College of Veterinary Surgeons has accredited the highest practice standard, and has developed its other sites gradually since then. Highcroft has some 50 professional vets, including 5 diploma holders, and approximately 220 staff in total.



Highcroft is a rapidly growing and strategically important acquisition for the Group, bringing CVS its first significant presence in the Bristol area, a large market where it currently has few surgeries. Highcroft is an integrated practice, already offering out-of-hours and referrals services to which CVS will direct business from other existing CVS practices in the wider area. Recent growth in Highcroft is being driven by the development of a new referral business, which comprises over 20% of turnover, four sites acquired and fully refurbished in 2014 and the establishment of three small sites in 2014 which will act as feeders for the Group's wider service proposition.



Until recently Highcroft operated as two separate legal entities which were brought together as Highcroft Pet Care Limited in February 2015. Based on unaudited pro forma figures for the combined Highcroft group for the year to 31 January 2015, Highcroft generated turnover of approximately £7.3 million, adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") of approximately £0.5 million and a reported profit before tax of approximately £0.2 million. As at 31 January 2015, net assets of Highcroft were £0.5 million.



The Directors believe that these unaudited pro forma figures do not fully reflect the current performance of Highcroft, which benefits from a high and growing level of referrals business at higher gross margin than first treatment practice revenue. Unaudited sales for the 8 months to September 2015 grew by over 30% against the comparable period last year. This growth is being driven by the development of the referrals business, the full year impact of the sites that were acquired and refurbished in the previous year and the growth of the more recently established, immature sites. These factors will continue to have an on-going impact on Highcroft, with high growth expected to continue in the near term.



The Group intends to continue to develop the Highcroft business to optimise its potential. As part of CVS, Highcroft is also expected to benefit substantially from better purchasing power as well as overhead synergies. These benefits are conservatively estimated to approach £0.6 million within three years. CVS expects the Acquisition to be mildly accretive in the Group's current financial year, reflecting the initial investment in the business, with phasing of synergy benefits and further growth delivering fuller accretive benefit in the first full year of ownership and beyond.



The initial total consideration payable to the shareholders of Highcroft is £7.4 million including costs. This figure is subject to adjustment based on the working capital and indebtedness of Highcroft as at 23 October 2015. In addition CVS will acquire net debt of approximately £4.1 million with Highcroft. Intangible assets and goodwill of approximately £11.0 million are expected to arise on completion of the Acquisition.



Up to £1.0 million of deferred consideration is payable to the vendors of Highcroft in 2017, subject to sales of at least £10.2m being achieved in the Highcroft business year ending 31 January 2017.



The Directors believe that the Acquisition is a particularly strong fit with the Group's existing operations and a further important step in the Group's strategy of growing integrated operations in practices, out-of-hours and referrals centres. The Acquisition follows the opening of the Group's Lumbry Park referral centre earlier this month and the acquisition of the Dovecote referral centre in July 2015.



Simon Innes, Chief Executive of CVS commented, "CVS looks forward to working with the Highcroft team to continue to deliver high levels of expertise and service as we deliver the next phase of growth together."

Annual general meeting statement

CVS Group PLC (CVSG:LSE) set a new 52-week high during today's trading session when it reached 760.50. Over this period, the share price is up 87.78%.

Acquisitions and New Bank Facilities
RNS
RNS Number : 9627H
CVS Group plc
04 December 2015

4 December 2015



CVS Group plc

("CVS", the "Company" or the "Group")



Acquisition of Albavet Limited ('Albavet'), The Pet Crematorium Limited ('The Pet Crematorium') and New Bank Facilities



Acquisition of Albavet



CVS (AIM: "CVSG"), the UK's leading provider of integrated veterinary services, is pleased to announce that on 3 December 2015 it acquired the entire share capital of Albavet and its wholly owned subsidiary, VETisco Limited (together the "Albavet Group" and the "Acquisition").



The Albavet Group employs some 34 professional vets and over 150 staff in total across three separate businesses: 11 veterinary surgeries; a veterinary buying group, trading under the name of Vetshare; and an instrumentation business trading under the name of VETisco.



The veterinary surgeries are well established businesses and are based in the Fife area (4 sites), Glasgow (1 site), Nottingham (1 site), the Stoke-on-Trent area (4 sites) and Wallington, Surrey (1 site). The surgeries perform small animal work.



The Vetshare buying group currently has over 400 members operating from over 500 surgeries across the UK. Vetshare negotiates supplier rebates on behalf of its members and generates its revenues based on commission on members' purchases from wholesalers. It also sources and negotiates other veterinary services for its members, including crematoria and laboratory work. In September 2014 members of the London Vet Forum buying group transferred to Vetshare, increasing the number of members by over 20%.



The VETisco instrumentation business is a small distribution business having commenced in 2012. It currently makes a small loss.



In the year to 31 October 2014, the last for which published accounts are available, the Albavet Group had turnover of approximately £6.6 million, of which £5.5 million was generated by the surgeries. Earnings before Interest, Tax and Depreciation and Amortisation ("EBITDA") was c. £0.8m million and profit before tax was £0.6 million (both after adjusting for rent that will be payable on properties owned by the Albavet Group pre acquisition but which will be leased post acquisition). As at 31 October 2014 net liabilities excluding goodwill of Albavet were £0.7 million.



The total consideration payable to the shareholders of Albavet is £11.3 million including costs. This figure is subject to adjustment based on the working capital and indebtedness of Albavet at the date of acquisition. In addition CVS will acquire net debt of approximately £0.1 million with Albavet. Intangible assets and goodwill of approximately £11.6 million are expected to arise on completion of the Acquisition.



The consideration for the Acquisition was paid out of the Group's new bank facilities.



Albavet is a strong fit with the Group's existing operations. Its surgeries fit well into the geographical spread of the Group's existing small animal sites. The acquisition of the Vetshare buying group will provide a significant base for further development of CVS's buying group strategy. As part of the CVS Group, Albavet is expected to benefit substantially from better purchasing power. Many of the benefits within the Albavet surgeries are expected to be generated over the first year post acquisition, while benefits in the enlarged buying group are expected to be achieved over the medium term.



Acquisition of The Pet Crematorium

CVS has also acquired the entire share capital of The Pet Crematorium which consists of two crematoria: the first is located at Witton Gilbert, near Durham and the second is at Larkhall, near Hamilton. It employs about 22 staff. The terms of this transaction are below the threshold requiring further disclosure.



This acquisition significantly improves the geographical coverage of CVS's crematoria network. The Scottish and North East England locations complement the existing CVS sites at Rossendale, Runcorn, Exeter and Cobham.



New Bank Facilities



CVS is also pleased to announce that it has entered into a new bank facility agreement which provides the Group with total facilities of £115 million to support the Group's organic and acquisitive growth initiatives over the coming years. These facilities are provided by a syndicate of three banks: RBS, HSBC and AIB. They replace the existing banking arrangements on more favourable terms, including a lower coupon, and comprise the following elements:

· A fixed term loan of £67.5 million, repayable on 23rd November 2021 via a single bullet repayment; and

· A six year Revolving Credit Facility ("RCF") of £47.5 million that runs to 23rd November 2021.



In addition the Group has a £5.0 million overdraft facility renewable annually.



The two main financial covenants associated with these facilities are based on Group Borrowings to EBITDA and Group EBITDA to interest. The Group Borrowings to EBITDA ratio must not exceed 3.5 for the period up to 31st December 2017 from when it must not exceed 3.0. The Group EBITDA to interest ratio must not be less than 4.5. The facilities require cross guarantees from the most significant of the CVS Group's trading subsidiaries but are not secured on the assets of the Group. EBITDA is based on the last 12 months' performance adjusted for the full year impact of acquisitions made during the period.



Commenting on the Acquisitions and on the new facility agreement, Simon Innes, CVS Chief Executive, said:



"The Albavet Group is a well-established, high quality operation. This acquisition significantly develops our surgeries in central Scotland and in the Midlands. The Vetshare buying group provides a major step forward in our strategy of developing a significant buying group which can benefit from the scale and scope of CVS.



The Pet Crematorium is a great addition to our Crematoria Division with the two locations near Hamilton and Durham ideally complementing our existing crematoria network.



We are delighted to welcome the Albavet and The Pet crematorium staff to CVS.



The new borrowing facility provides CVS with ability to finance the acquisition of Albavet and a number of other acquisitions that we expect to take place in the remainder of the financial year. The Group is comfortable with operating at a Group Borrowings to EBITDA ratio in the region of 3.0 for a period of time and the maximum ratio of 3.5 allows us the flexibility to do so. This level of gearing is a temporary measure, to allow us to complete the unusually large number of significant acquisitions that have taken place this year. The reduction of the maximum ratio to 3.0 from 31 December 2017 underlines our intention to reduce gearing gradually following the current period of higher acquisitive growth, and reflects the strong cash generation in the business which also funds the Group's numerous organic growth initiatives."

Broker Forecast - Peel Hunt issues a broker note on CVS Group PLC
BFN
Peel Hunt today reaffirms its buy investment rating on CVS Group PLC (LON:CVSG) and raised its price target to 850p (from 775p).

Story provided by StockMarketWire.com

17 Dec Berenberg 880.00 Buy

CVS Group PLC (CVSG:LSE) set a new 52-week high during today's trading session when it reached 824.00. Over this period, the share price is up 83.11%.

Still 40p short of the broker target. Looks pretty strong going into 2016 as most pet lovers will pay out for vet bills.



CVS Group PLC (CVSG:LSE) set a new 52-week high during today's trading session when it reached 840.00. Over this period, the share price is up 86.67%

Notification of Presentation and Interim Results
RNS
RNS Number : 2395M
CVS Group plc
19 January 2016

19 January 2016





CVS Group plc

("CVS")



Notification of Shareholder Presentation and Interim Results



CVS, the UK's leading provider of integrated veterinary services, is today providing analysts and institutional investors with a tour of its new Lumbry Park Major Multi Disciplinary Referral Centre, together with a briefing focussed on the strategy and operations of the group. No new material information will be provided.



CVS also announces that it will be releasing its Interim Results for the six months ended 31 December 2015 on 21 March 2016.

Interim results

· Sales growth of 23%

· Like-for-like sales increase of 3.0%

· Adjusted EBITDA up at £14.6m (23.7%)

· Adjusted EPS 14.7p (14.0%)

· Net debt £84.8m (June 2015: £46.2m) reflecting a significant acceleration in acquisition activity

· 42 practice surgeries acquired during the period and 8 after the period end

· Significant development of the referrals business with the acquisition of Highcroft Veterinary Referrals, Dovecote Veterinary Hospital and the opening on Lumbry Park Veterinary Specialists

21 Mar Peel Hunt 850.00 Buy

31 Mar Berenberg 880.00 Buy

Sunday Midas tip -CVS Group is the largest veterinary company in the UK, with more than 350 surgeries, five laboratories that carry out diagnostic tests for vets and seven pet crematoria. The company also owns Animed Direct, an online store for medicines, pet food and other must-have pet products.

Midas recommended CVS in June 2009, when the shares were 142p. Today the stock is 748½p, down from 806p before the Brexit vote. At current levels, the shares are a buy.

CVS has expanded substantially over the past seven years, both organically and through acquisition, and profits have quadrupled. Brokers expect profits up 25 per cent to £24.4 million for the year to June 30. Further strong growth is pencilled in for the next two years.

Research shows that pets are increasingly regarded as members of the family, so owners spend more on their food, health and wellbeing. This should play to CVS Group’s strengths, whatever the economic outlook.

Midas verdict: CVS shares have been knocked back along with many other consumer-related stocks, but the reaction is overdone. Investors who bought back in 2009 should retain their shares. New investors may also find value at today’s price.

Director Deals - CVS Group PLC (CVSG)

Nick Perrin, Financial Director, bought 2,000 shares in the company on the 7th July 2016 at a price of 688.63p. The Director now holds 12,000 shares. NOTE: Average price Story provided by StockMarketWire.com Director deals data provided by www.directorsholdings.com

16:05 07/07/2016
Director Deals - CVS Group PLC (CVSG)

Richard Connell, Chairman, bought 5,000 shares in the company on the 7th July 2016 at a price of 688.63p. The Director now holds 97,891 shares. NOTE: Average price Story provided by StockMarketWire.com Director deals data provided by www.directorsholdings.com