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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.
Morning,
The state of the industry is still Is very buoyant and CVS are very well placed to to continue to benefit.They are expanding geographically outside of U.K. and have very little exposure to large animal sector.
As they were the lead corporate it will be harder for them to be asked to divest surgeries plus since QVC they have been very selective in current investments.
They can change the names easily enough and again their referral centres were early so their strength is the first opinion surgeries and as long as recruitment and retention is OK they will be fine.
Haha Joo1 carry on. Plenty will take your shares off you. Idiot
Some comments in the Times today, and vets stating that they cannot offer some if the cheaper alternative meds as regulation does not allow them and the 'gold standard' treatments expected from pet owners is only supported by scans etc. The old style vets 'best guess' is no longer accepted so there is now a greater cost. CMA will find the whole industry complex and costly to administer, pricing signage and standard prescription costs an area CMA may highlight as an area for improvement if the industry does not move to it in the next two years (they no doubt will voluntarily). Good overview by one commentator below....
''As with our health treatment, so much more is expected of vets. 50 years ago, you didn’t have access to all these scans and tests. Vet had to make an educated guess and treated. Now people expect x-rays and other scans, blood tests etc. guess what, it costs more.
For many farmers, particularly sheep, it is completely uneconomical to get the vet out now. You either treat it yourself or put the animal down. My friends started out in mixed practice but migrated to pets as the money is better ( more emotional attachment) but never made a fortune. Neither do the vet consolidation companies appear to be making a fortune.
I’d also like to see some numbers on how long pets live now compared to 50 years ago. We had dogs that died young that would probably now get tested, treated and would have lasted several more years. Just wasn’t available then. How much does an ageing pet population push up costs?
Another factor is drug costs. About 15-20 years ago, many cheap generic drugs that vets had used for decades were withdrawn. A new EU regulation was that they could only be used if met new clinical tests. Given the cost of tests and that they were all cheap and generic meant they got withdrawn rather than tested.''
Much hysteria about the CMA look at vets, the reality is it's a costly and much improved service than just a few years ago and pet owners expectations have also increased with 'gold standard' treatment expected, a more complete treatment comes at a cost. Business as usual for the Pet industry for the next two years as CMA expect any report to be 18 months+ before it can be presented to ministers and the industry will be able to challenge any aspects they feel are damaging, so 2 years or more is a safe bet before a completed report or any actions, if any, required.
Im selling before it reaches 5 pounds , this is doomed,
I traded this a week ago and made some profit. Bought again today at 1032. Think this will bounce hard soon
People that are selling mustn't be very good with finances... They must be making a loss here as it hasn't been this low for 4 years ... It seems oversold massively at below 10, surely the smart move is to hold as all risks seemed massively factored in after the drop from 20+.
Afternoon surprised to see it fall down so much and the results info was published in Vet Tines today and seems bullish.
Will get a better handle on state of the industry at Manchester next week but pretty confident it is still buoyant
Have a good w/ end all
Still incorrect. Spread was narrow 1006 to 1008 at the time of writing. Doh. Been a long week.
I am still happy to hold some of these, I only bought a starter pos, Id happily take some more under £10.
Sorry, yes I am watching the level 2 screen, incorrect statement, but agree with Teddy, that Market makers are still influencing the price. Singer is best offering at 9.90. Really level 2 is even easier to manipulate than SETS. I can close that spread now, if I want to offer mine at 1030.
@Shearclass: Even with Sets, you still need Market Makers! They provide the liquidity. What SETS does is reduce the risk but they are still needed. The MM’s carry the stock and they can buy more of a stock, if they so wish. I think the limit used to be up to 4% of issued share capital. MM’s play a big part in influencing the price, believe me.
Personally I think this is being forced below £10 at this point. No change to business to justify the huge drop. As several people have explained, there will be no relevant actions for at least 18 months and the business will remain relatively unchanged until then.
CVSG isn't a market maker stock, it's on SETS. Looked back at the adjusted EBITDA margins from 2014 to present on the their vetinary segment, pre 2020 they averaged ~17%, post 2020 they've averaged ~21.5%. What has changed to justify a 25% uplift? Notable that the warned on EBITDA margins back in 2017/18 (which caused shares to crater from £15 to £3.60 over 18 months), this current stage 2 fall is similar to the pattern back then.
Hi Surprised. Yes I saw that RBC broker note too, exactly my sentiments. Also listening to the Vox market interviews CVS is expanding in to other countries like Australia. I dont think the CMA can reach them there. These drops are totally overdone on market maker stocks. They are just doing it to generate liquidity, and earn a commission.
Bought Bango this week too, same deal. These are all in the pension, so can hold them more or less indefinitely.
I think the chances of a TO on any of these companies makes sense to hold a little of each for max exposure to M&A.
One Broker note suggests a bit of sideways trading for a while , however, it also states ...
"We think investors with an 18-24 month investment horizon should see the current price as a great opportunity to buy shares with almost 3x upside potential '' (3000p)
With many people holding stock between 1700p and 2000p over the past 2-3 years I would suggest a return to higher levels will be somewhat sooner, many considered CVSG was a decent buy at 1700p to 2000p and with no material, if any, recommnended changes at least two years away and no imminent changes to the business other than a long review it's business as normal .
Hi Dartron, I've added too in the 1030's let the dust settle and any CMA report is 18 months or more away and in such a complex business with many moving parts, properties, rents, vets & staff, medical supplies, complex surgery, precsriptions, training, investment, etc the CMA will have huge difficulty in changing business models. They can recommend a standard presciption charge and suggest better pricing signage and the like, however, any material changes would be hugely complex if not impossible and are two years or more away as the industry will clearly challenge anything they see as damaging and therefore possible further legal delays push any changes on the business even further out .....at current price for one of the top performing shares over the past ten years and a drop from 2000p just a few months ago on nothing material other than a two year look at the industry it looks like a decent buy to me and as you say a return to 1500p -17000p+ over the coming months not an unreasonable view on the current metrics.
Lovely fake price drop, let people in like me. Back to £15 in 12 months.
30% price drop on back of CMA announcement. This is ridiculous. This has lost nearly 50% since initial CMA announcement last year. Don’t try to catch a falling knife as they say but this fall is completely overdone!
Back in here in a big way, they will do their best to drop this below 1000p, there will be a fair few stop losses fixed at this level. There will always be a need for pet Doctors, and CVSG are not exactly creaming it in. The CMA action will only continue to polarise the market.
The only group in CMA cross hairs are independent Vets who survive on lower prices. If the big boys with all their buying power are forced to lower prices they can destroy all others and not be blamed as the CMA have made them take the action.
Consumer services sector, has not yet broken above the 1/3/24, time pivot high of 3844. The break of either the high or low, of the first trading day of the calendar month, often indicates the trend for the month.
My dentist doesn't display its (thoroughly extortionate) prices anywhere, nor the fact that its products can be bought cheaper elsewhere. Will the CMA be investigating them too?
In fact, just the the other week I went in for a follow up on some (ultra expensive) treatment and the nice dentist asked if I'd like a quick check up while I'm there. Sure I thought, why not. 5 minutes later, check is done, I've left the building and i get a call from the receptionist. "You owe us £45 for the check up". Unbelievable.
I have been buying all day.
Teh business still stands and the demand still stands
So overdone