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.

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

i've read the statement and for the life of me i cannot see why sp should have collapsed so dramatically

A few cost pressures underneath, otherwise a good time to top up.

Director Deals - CVS Group PLC (CVSG)
BFN
Richard Connell, Chairman, bought 10,000 shares in the company on the 7th December 2017 at a price of 0.00p. The Director now holds 110,000 shares.
NOTE: Average price
Story provided by StockMarketWire.com
Director deals data provided by www.directorsholdings.com

The sell off clearly overdone. Good top up opportunity.

i got a bit overexcited when sp fell on the figures at the end of november, but i gritted my teeth and have now been very handsomely rewarded
sp has now gone through the roof, and much may be due to a heavy bear squeeze - not sure

anyway, with the puff finally stalling, i have sold my trading position at 1212, but shall continue to hold in sipp

Well done, are you in UAE. :-))

until tomorrow .... it's been quite a hard trip as also went to Israel en route

too many peeps on this BB spend far too long on inconsequential threads instead of share-focused ones
the FAR9 thread on advfn is pretty good and is the only one i really follow