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.

13:50 31/10/2016
Director Deals - CVS Group PLC (CVSG)
Richard Connell, Chairman, bought 2,109 shares in the company on the 28th October 2016 at a price of 878.50p. The Director now holds 100,000 shares. Story provided by StockMarketWire.com Director deals data provided by www.directorsholdings.com

Director Deals - CVS Group PLC (CVSG)
BFN
Simon Innes, Chief Executive Officer, bought 5,750 shares in the company on the 15th November 2016 at a price of 867.00p. The Director now holds 252,225 shares.

Story provided by StockMarketWire.com
Director deals data provided by www.directorsholdings.com

agm statement

24 Nov
Peel Hunt
1,000.00
Buy
24 Nov
N+1 Singer
N/A
Corporate

12 Dec
Berenberg
1,130.00
Buy

Placing

Result of Successful �30.2 million Placing & TVR
RNS
RNS Number : 8584R
CVS Group plc
14 December 2016
 
14 December 2016
 
Capitalised terms used but not defined in this announcement shall have the meanings given to such terms in the announcement of the Proposed Accelerated Bookbuild released earlier today. This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
 
CVS Group plc
("CVS" or the "Company")
 
Result of Successful £30.2 million Placing and Total Voting Rights
  
CVS Group plc (AIM: CVSG), one of the UK's leading providers of integrated veterinary services for small and large animals, is pleased to announce that, following its announcements on 13 December 2016, the Company has successfully raised a total of £30.2 million (before expenses) by means of an accelerated bookbuild with existing and new investors, and will issue 3,019,500 new Ordinary Shares (the "Placing Shares") at a price of 1000 pence each (the "Placing Price").  The issue of the Placing Shares is being made under existing authorities and remains subject to Admission.
 
Key Highlights
 
·     Placing to raise £30.2 million through the issue of 3,019,500 Placing Shares to existing and new investors, at a Placing Price of 1000 pence per Placing Share
·     The Placing was approximately 2.4 times oversubscribed
·     The Placing Price represents a discount of 3.85 per cent. to the Closing Price on 12 December 2016, being the last trading date prior to announcement of the proposed Placing
·     The net proceeds of the Placing, being approximately £29.5 million, will be used primarily to facilitate further acquisitions in the UK and the Netherlands, in line with the Group's existing growth strategy
·     Following Admission, the Placing Shares will represent approximately 4.76 per cent. of the share capital of the Company, as enlarged by the issue of the Placing Shares
 
Simon Innes, Chief Executive of CVS, said:
 
"The Board is pleased to conclude this fundraising with the strong support of shareholders and new investors.  We remain excited by the continuing prospect to build further on our position as a leading provider of integrated veterinary services in the UK, as well as by that in the Netherlands, which we recently entered with our first two acquisitions and which we see as offering a compelling opportunity to develop a business on a similar basis to our UK one.
 
"Our established network and experienced team offers significant opportunities for further growth, and we look forward to building further value in the business, through further acquisitions and continuing organic growth.  We remain focused on delivering excellent customer service and care and on providing high quality training and career opportunities for our staff."
 
Expected Timetable to Admission
 
Application has been made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.  It is expected that Admission and the commencement of dealings in the Placing Shares will take place at 08.00 a.m. on or around 16 December 2016 and that dealings in the Placing Shares on AIM will commence at the same time.
The times and dates above refer to London time and are subject to change by the Company (with the agreement of N+1 Singer), in which case details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement through a Regulatory Information Service.
 
Placing Shares
 
The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of Admission.
 
Total Voting Rights
 
Following Admission on 16 December 2016 the Company's issued share capital will comprise 63,412,323 Ordinary Shares. From Admission, the figure of 63,412,323 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.
 
Related Party Transaction
Funds and accounts under management by direct and indirect investment management subsidiaries of BlackRock, Inc. (together "BlackRock") are participating in the Placing, having conditionally agreed to subscribe for 456,004 Placing Shares pursuant to the Placing.  As BlackRock is a Substantial Shareholder in the Company (as defined by the AIM Rules), its participation in the Placing is a related party transaction for the purposes of the AIM Rules.
Following Admission, BlackRock is expected to have a shareholding of 12,173,262 Ordinary Shares, representing approximately 19.20 per cent. of the Enlarged Issued Share Capital.
The Directors, having consulted with the Company's Nominated Adviser, N+1 Singer, consider the terms of BlackRock's participation in the Placing to be fair and reasonable insofar as the Company's shareholders are concerned.
 
Conditions of the Placing
On 13 December 2016, the Company entered into the Placing Agreement with N+1 Singer pursuant to which N+1 Singer agreed to use reasonable endeavours to place the Placing Shares at the Placing Price.  Under the Placing Agreement, the Company has given N+1 Singer customary warranties and indemnities.
The Placing remains conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms and Admission of the Placing Shares. 

Proactive investor-

Does bid from Mars set benchmark for vet chains such as CVS Group?
Share
11:56 13 Feb 2017
At the last count CVS owned 378 vets’ surgeries around the UK after splashing out £63mln last year buying 67.

Relax - vet chains are in demand
Last month the chocolate giant Mars made what looked like a rather leftfield acquisition when it agreed to pay US$9.1mln for VCA, America’s largest veterinary chain.
It’s not such an unusual deal when you realise the Snickers and Milky Way maker also owns some of the world’s best known pet food brands.
Even so, there would have to be quite a few cost savings and synergies to make the transaction work – given the take-out multiples involved.
For the confectioner, which also owns Whiskas, Pedigree and IAMS, paid a whopping 19-times last year’s underlying earnings (EBITDA), or 3.8 times revenues.
That’s big bucks but not unusual for the sector, with private equity selling vet chains for anywhere upwards of 15-19 times.
Now, it may be worth just retaining that nugget on valuations (while recognising the fact that private equity is active in the sector) when assessing the investment merits of CVS Group (LON:CVSG).
It is the UK’s only listed pure-play and integrated veterinarian business and second only to Pets at Home in terms of the numbers of outlets (remember PAH is ostensibly a retailer).
At the last count CVS owned 378 vets’ surgeries around the UK after splashing out £63mln last year buying 67.
“People sometimes think we acquire a business and we save lots on the administration. We don’t. The benefits we get are the buying benefits,” says the company’s finance director Nick Perrin.
New additions to the portfolio are also plugged into the company’s crematoria and labs, conferring further savings.
In it last full year, the CVS turned over £218mln, generating adjusted EBITDA £33mln, up 30% and 43% respectively. Like-for-like growth was a more pedestrian but still a respectable 5%.
As well as crematoria and labs, the company also has an online business and last autumn announced plans to provide its own pet insurance. It also runs a Healthy Pet Club preventative medicine scheme with 280,000 members paying £11 a month.
After last year’s flurry of acquisitions, which also included the purchase of three crematoria, the Vetshare buying and the VETisco instrumentation business, the company’s net debt was £93mln at the financial year end.
Last December it raised £30mln from investors, which along with the cash generated by the business will help bring gearing below two-times EBITDA – a level of indebtedness investors are comfortable with.
“It wasn’t that we couldn’t service that debt. The worry was it might limit our opportunities when acquisitions came along,” said Perrin.
With around 5,000 veterinary surgeries around the UK, there’s still plenty of room for growth.
And unlike some of the competition it isn’t limited in what it can acquire.
“We do much more than other people. Pets at Home, for instance, only do small animals. We do farm work and equine; we have labs and referral services and our own out of hours service,” said Perrin.
“The  other industry players might do one or two of those, but not everything.”
The CVS finance director admits there is competition out there for deals, which has driven up prices.
However, the company doesn’t tend to pay more than seven-times EBITDA. And on that basis you see why the sector is attractive to private equity: the buyout companies are able to sell businesses for roughly double the amount they are paying (if not more).
Broker Investec reckons the ‘companion animal services market’ (pet care to you and me) is primed to grow around 5% a year for the foreseeable future as owners spend more on their charges with human-style services. And crucially it is “relatively immune to economic pressure”.
So, the fundamentals of the industry are decent. Of course, there are opportunities to export the model and in fact CVS is looking to push into the Netherlands.
City firm N+1 Singer thinks there is the potential to create a £1bn champion of the sector – although it is two-thirds of the way there already.
The shares aren’t exactly cheap on forward 23-times earnings per share, or just under 15-times forecast EBITDA; however, as we have seen with the Mars deal there are those out there willing to fork out those sums.

08:10 16/02/2017
Broker Forecast - Berenberg issues a broker note on CVS Group PLC
Berenberg today reaffirms its buy investment rating on CVS Group PLC (LON:CVSG) and raised its price target to 1200p (from 1130p). Story provided by StockMarketWire.com

Holding(s) company

Interim results

·     Sales growth of 28.5%
·     Like-for-like sales increase of 7.2%
·     Adjusted EBITDA up at £20.7m (42.4%)
·     Adjusted EPS 21.5p (46.3%)
·     Net debt £68.0m (June 2016: £93.1m)
·     £29.6m (after expenses) raised through an equity placing in December 2016
·     13 practice surgeries acquired during the period and 20 after the period end

15:25 31/03/2017
Director Deals - CVS Group PLC (CVSG)
Nick Perrin, Financial Director, bought 3,714 shares in the company on the 31st March 2017 at a price of 1080.00p. The Director now holds 32,000 shares. Story provided by StockMarketWire.com Director deals data provided by www.directorsholdings.com

Market buzz -CVS Group

Analysts at Berenberg hailed CVS Group's shift in its business mix, with the resulting margin expansion that resulted, reiterating their 'Buy' recommendation on the stock in the process.

However, like-for-like sales were likely to slow towards the sector average in second half of the year, the broker cautioned.

Even so, the broker raised its earnings per share forecasts for 2017 to 2019 by 4% for each year, as a result of which it bumped up its target from 1,200p to 1,220p.

Although investors often focus on the rate of growth in like-for-like sales and M&A when analysing the veterinary group, the most noteworthy aspect of the firm's interims was its improved operating margin at the operating level, it said.

In terms of earnings before interest, taxes, depreciation and amortisation, margins rose to 16.1% from 14.5% in the previous six-month stretch, even as CVS invested significantly on people and equipment.

The key to the fatter margins was nevertheless the "strong improvement" in profitability in the vet practice side of the business, as CVS shifted towards higher-margin services versus drugs even as it moved to use more of its own brand drugs, with the latter having their own benefits.

"We have increased our forecast margins for the business as we believe the business will continue to benefit as the volume of own brand drugs sold in the business continues to grow," Berenberg said.

Analyst Sam England also pointed out that the company's M&A continued to be highly accretive even though in the latest six months it had paid an average price of 7.5 times historical EBITDA, instead of the seven times operating profits seen in fiscal year 2016.

That contributed to England's decision to lift his estimates.

CVS still had between £30m to £40m of firepower for M&A left, assuming it leveraged up the business to 2.5 times profits, he said.

On a slightly more cautious note, England tipped his hat to the company's "exceptionally strong" 7.2% increase in LFL in the first half of 2017 but added that a level of growth closer to the UK veterinary market's average rate of between 3% to 4% was more likely in the second half.

CVS Group PLC (CVSG:LSE) set a new 52-week high during today's trading session when it reached 1,196.00. Over this period, the share price is up 51.40%.

Knocking on the door of £13. :-))

Exercise of Options & TVR
RNS
RNS Number : 7887J
CVS Group plc
30 June 2017
 
30 June 2017
 
CVS Group plc
("CVS" or the "Company")
 
Exercise of Options and Total Voting Rights
                  
CVS, one of the UK's leading providers of integrated veterinary services for small and large animals, announces that 6,277 ordinary shares of 0.2 pence each ("Ordinary Shares") (the "SAYE Shares") were issued on 29 June 2017 as a result of the exercise of employee share options, in connection with the Company's 2013/2016 Save As You Earn Scheme.
 
The SAYE Shares rank pari passu with all existing Ordinary Shares.  The issue of the SAYE Shares has been satisfied via the Company's block listing which was announced on 19 December 2016.
 
Following issue of the SAYE Shares, the Company's total issued share capital consists of 63,903,911 Ordinary Shares with one voting right per share. The Company does not hold any Ordinary Shares in Treasury. Therefore, the total number of voting rights in the Company is 63,903,911. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.
 

Trading update

Preliminary results

·      Revenue up 24.6% to £271.8m
·      Like-for-like sales growth for the Group of +6.3%
·      Healthy Pet Club members up 20.9% to 306,000
·      Adjusted EBITDA up 28.2% to £42.1m
·      Adjusted earnings per share up 32.1% to 42.8 pence per share
·      Acquired and integrated 62 surgeries during the year
·      10 surgeries acquired after the year end
·      Now operate 432 surgeries

29 Sep
Peel Hunt
1,350.00
Hold

agm statement