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CMA interest does not seem to "bother" Pets at Home. It seems only CVS are suspected of dodgy behaviour towards pet owners !!!!
Bought in at £14 sold out at £19 a few years ago. just started a new position at 988p. not looking to trade,long term hold
I keep telling myself time will be my friend. Patience is the game here. It will get back to 'decent' levels, its just when.
Bizarre.
I sold out my recent holding at slight profit for 1041 on Friday.
Just gone back in at 988 ...
Fingers crossed
What is going on here? The price action is bizarre. Very positive Friday and today back on the skids. Fundamentals of business unchanged. CMA threats pretty meaningless. End of trading year coming up so maybe that’s part of it?
Can anyone explain why the sp has halved and remains there. This after several months following the CMA initial intervention. There might be some logic if this company had been making big profits or even paying a good dividend. Neither was the case and the sp when close to £20 hardly made CVs look a good investment.
Just got back from BSAVA and as usual busy during breaks but quiet during ie tires.
Not much talk about CMA report and industry just carries in as normal.According to Vet Times CVS are the only named corporate group to have approached the CMA about suggesting an intermediate framework rather than a full investigation.
Much better day today.
Much better day today. Hope as Monkfish has said a bottom has been hit. As I posted earlier in week the SP has dropped over 740 pence so a little bounce is due. This was 1500 to 1600 range . Personally see a recovery and price settling around 1200 to 1300 . GLA
So, after drifting lower the past few days is today the day we hit a bottom. Press coverage finally ending for now. Hopefully, a bit of sense will return to this market and we’ll see a step up. Or will it keep sliding. Worrying if it does as I’m sure whatever the CMA say about the full investigation there’ll be another drop on that announcement. Funny times for this one. Long term it’ll recover though.
Good luck Teddy. Me too bought some more mid afternoon.
I bought another tranch 5 minutes ago, carrying a lot of these at the mo, I have no concerns with this share. If it is not 1200p by the time I am eating my choccy eggs I will be disappointed.
Don't think they can as it's a Closed Period
The board should be showing support by buying at this price if they think it is cheap. Try and garner some confidence. At the minute it's a sinking ship without a captain.
Can't believe this is down 729 points in a month.
Like a major profit warning ⚠️.
Overdone? Time will tell I suppose
Anyone who got in here early this morning will do well I think.
Still no significant buy pressure here below £10.
Are the CMA releasing their plans at the start of April or is there going to be a delay before they release the full details of their investigation. They state they are having a month long consultation with the sector but it’s not clear to me if they are then going to announce the scope of their investigation or will there be a long wait before such an Announcement?
Yes great post Surprised.
Don’t forget in Feb 22 when CMA did report on purchase of QPC the lowest the SP got was £16.Then they did an investigation into local monopolies but only with CVS- if you look at those including Nottingham and Warrington and know anything about Vets in those localities and which ones are CVS you will know if the CMA simply required the divestment of The Vet then they could not have been that concerned with CVS dominance.
So if CMA require further divestments which is the main worry to the Corporate sector then CVS are very unlikely to be impacted
@Surprised. An excellent post.
...... two year 'look at the industry........
Not a share for you then Shearclass, If you believe the market is as sophisticated as the details you suggest in your post I would be happy to agree, however, the market is far from that sophisticated or most shares would be priced 'correctly' according to daily/weekly metrics and as we all know share prices rarely reflect the 'true' price for numerous reasons, including broker algo's, macro etc. Share will shoot to the upside and equally crash to the downside, for on going businesses where nothing material has changed (CVSG) it is for each of us to determine if the market has over reacted to the downside in this case....a number of metrics very much suggest CVSG is oversold and broker algo's are in play, they add liquidity and can steer prices, particularly in a market such as this. The sp will likely (maybe / maybe not) trade in a band at these levels for a short while, however, a 50% drop on a two 'look at the industry' while it is business as usual suggests well oversold, no material changes and a business that is aiming for growth, I van wait a few weeks/months for the dust to settle, sentiment is a fickle aspect ....the market occasionally provides opportunity, I believe this is one, some will not, it's what makes a market.
The Vet market particularly Companion Animal where CVS are strongest has exploded since Covid in terms of numbers of all pets as well as more expensive treatments such as the mABs vs Osteo arthritis which are now amongst the most expensive medicines.
CVSG have improved their own margins by their policy of white label and the huge increase in their PHC numbers and yes they may have paid highly to get into the Australian market but most of their U.K. purchases were at a time before prices peaked here.
ATB
Nobody has responded to the point I raised on Friday; why did CVSG's EBITDA margins increase from ~17% in 2014-2019 to ~21.5% in the 3 years since Covid? They've made around £20m PA more in the last 3 years than they would have done if their pre Covid margins has remained the same...
If I'd looked at the financials here and seen flat EBITDA margins then I'd have been bullish, however it looks to me like they have indeed been benefitting from fattened margins which will have been coming out of the pocket of their customers.
I think the market is pricing in a return to pre Covid EBITDA margins, which would mean a sizable reduction in forecast EBITDA. This also won't be helped by the large net debt balance they have built up via their expensive / aggressive entry into the Aus market.
And again, market makers aren't influencing this in the slightest given the £4.4m volume so far today - this is a bulls v bears battle on the order book.
Happy to take a first tranche here this morning. Risk/return looks sound to me; just wish I'd got in on Friday!
Morning Monkfish,
Good observations and yes likes of CVS will look for geographic expansion overseas or in U.K. where it allows.
Have seen a move over last few years of ex corporate partners setting back up as independent vets and this trend will continue but I do believe CVS are in a much better position than other Corporates as they bought their bigger Practices much earlier.
The media will take great pleasure in bashing vets for the next few weeks amongst an emerging narrative of independent practices are goodies and corporates are baddies but ultimately the sector continues to grow, prices will continue to rise and further consolidation will occur. CVS has engaged with the CMA throughout and will no doubt make further efforts to be seen to be willing to make changes. The reality is that veterinary practice remains a highly regulated private business and the powers of the CMA are very limited. Because of the emotional aspect of pet ownership, unfortunately, the CMA feels empowered to try to flex its muscles. Interestingly, the acquisition component of CVS is now much more active in Australia with 17 practices bought last year and a further 10 currently under offer. In contrast, purchases in the UK are now reduced and CVS consults the CMA before proceeding in any case.
The bottom line is that clients will have to pay more for thorough work ups and treatment in line with the other professions. Little material change will occur in a negative respect for CVS when the investigation is completed. However, the market is notoriously completely unreasonable in scenarios such as these. Let’s face it, volatility means more cash for the market makers. I wouldn’t be surprised if we see a further drop yet especially when the CMA reveals what it is actually going to do but once media coverage reduces and the dust settles this price will appear ludicrous and things will recover.