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The review started in September 2023 has concluded they need to do a review from March 2024 to April 2024 ! You can't make it up.
Sarah Cardell, Chief Executive of the CMA, said: We launched our review of the veterinary sector last September because this is a critical market for the UK’s 16 million pet owners, We have provisionally decided to launch a market investigation because that’s the quickest route to enable us to take direct action, if needed. The CMA has launched a 4-week consultation to seek views from the sector on the proposal to launch a market investigation. The consultation closes on 11 April 2023 at which point it will consider the responses
From this mornings RNS;
"Concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.
Market concentration measures how many competitors operate in a particular market - the fewer firms operating in a market, the more concentrated it is.
· In 2013, around 10% of vet practices belonged to large groups, but that share is now almost 60%, and many of the large groups have expressed an intention to continue expanding their business through acquisition of independently owned practices.
· To illustrate this another way, since 2013 1,500 of the 5,000 vet practices in the UK have been acquired by the six large corporate groups (CVS, IVC, Linnaeus, Medivet, Pets at Home and VetPartners).
· This may reduce the number of business models in locations where most or all of the first opinion practices are owned by one large corporate group, giving less choice to consumers because they tend to choose practices close to home."
The pet industry is poised to swell from $320 billion today to almost $500 billion by 2030, growth is driven by an increase in spending on pet-related healthcare — including veterinary care, diagnostics, and pharmaceuticals — that has created longer pet lifespans that require more expensive elderly care.
Alongside this longer pet lifespan comes a larger investment in increasingly complex drugs like monoclonal antibodies, which could make the pet pharmaceutical market top $25 billion by 2030. The analysis predicts that increased animal longevity and healthcare improvements might accelerate the use of preventive-care diagnostics as well, with the potential to become a $30 billion global market. Europe represents that largest growth opportunity with a total addressable market around $12 billion with just 8% penetration.
“We’re seeing a profound increase in consumer spending on pets and expect to see this continue through 2030. Consumers are willing to pay more for items for their pets, with the pet food market having the potential to grow more than 50% from current levels by the end of the decade.”
Warmer weather coming, injuries,fleas and tics a win win win situation. Except for me, i own a dog. Lol
Https://www.gov.uk/cma-cases/veterinary-services-market-for-pets-review
Surprised at the share price weakness. I don’t think the net margin margin for CVSG is much different to a dental business. Similar economics and good idea for seeing private healthcare prices. The CMA case is still open.
Got stopped out at 1500. Surprised at the drop despite lower revenue forecasts . Also is anyone clear on the status with the CMA enquiry. CMA gov website has a status of closed.
Thanks all
They are alright. Crazy selling today. This is only a CMA announcement closing the enquiry away from 2200 again.
I am surprised that I am buying these again at this price, the accounts look alright to me.
Looks like the short is 0.5%. Think it was higher only the other day.
Anyway am hopeful for a sp rise.
Growth likely coming more from expansion overseas than UK….the CMA review will give greater clarity over the UK potential….there will be scope for continued expansion, but more limited and larger M&A will be off the table.
Debt has grown driven by the AUS purchases…this should not be a problem as mgmt has learnt to keep its debt under control….
Rns trading update- revenue up 11.4% to £329.9m, Pet Club increased in membership by 4%, with 500,000 members as at 31/12/2023, successfully completed a further four acquisitions of small animal practices in Australia, strong pipeline of potential acquisition opportunities. In line and growing.
https://twitter.com/surprised_trade/status/1750419264358543554
There is still open short position. It’s fuel for bullish market. Just think what the balls they have…
Sector chart, has broken upward , above 20 week , sideways congestion, which can be accepted as an accumulation phase, providing fuel, for the bullish leading shares, in the sector, including CVS.
Price target 1770, from reverse head and shoulders breakout . Overhead supply from previous trading between 1800, and 1842, which may impede upward progress. Bullish price pivot breaks confirm trend is up. Sector chart has not yet broken upward , but is close to the required high breakout level. Positive divergence in Macd, and RSI, is bullish background, for CVS.
Is any idea what drives the price of CVSG?
..it's starting to move in a consistent fashion
Nice big lump gone through there...Somebody(s) impatient...
Pat not sure if you aware of the original history of CVS and V4P a very long time ago but the backers came from the optical industry and basically repeated the experience in Veterinary.
Yes there are economic pressures of clients to give up pets but the Vet industry is expanding still at a very nice CAGR and CVS along with others are still buying Practices so do not seem unduly worried about the CMA investigation.
Anyway have a nice w/ end
I take your point but cvs is a growth company buying up existing independent vets so this will influence what they achieve over time. https://www.ukpetfood.org/information-centre/statistics.html the stats on dog and cat ownership at the uk pet manufacturers association is a little iffy but seems to indicate that 2023 estimates show a declining number of cats and dogs owned. Perhaps post covid people are reverting to previous behaviour. I like to think the majority of people love their pets and will put them first but as the cost escalates they will think twice about having another one when their pet dies. In addition with cost of living pressures some will limit their use of vets. Insurance if they have it will vary in what they cover. eg cruciate operation - mid range package is around £6k so if you have a £4k limit you have to find £2k, and it is not a planned expense then this occurs - so xmas for the kids is not so happy this year for the woman with an 8 year old lab who has just undergone this op. With a revert to trend after COVID, plus those who give up on onership this could well offset additional owners in rented accommodation particularly if rented accommodation is less secure for the longer term. CVS will rely on buying up vets for growth in a shrinking pool so then consolidation is likely to continue growing. Im not saying cvs cant grow, I just think their end market may not be as growth oriented as they are as a company - in terms of pet population or spend per head.
The very positive trading update suggests people love their pets and always have and will continue too....with the rental market relaxing rules on pet ownership it is likely many folk excluded from pet ownership previously are likely to enter the pet market in 2024.
Costs are clearly, like in any aspect of life, a consideration, but it appears the cost of companionship/pet ownership etc is one people will put before others, as pets in most families come first. 🐕🐈⬛🐇
Hi. I have vested interests in the pet world with 3 dogs and lots of dog training interests. A straw pole of dog training friends indicates many are dropping their habit and not replacing dogs when they cross the bridge. Too expensive due to vets, insurance and pharmacy tie ups, plus of course the large dog food companies. Also a lot of advice from the 'experts' is standard vested interest driven and not best advice. Then there are the so called behaviourists who do a short online course and set themselves up as 'experts' for the gullible fools who pay their elevated charges then wonder why their problem dogs get worse not better. Ever wondered why rates of cancer in dogs are rising so fast with shorter lifespans (clue look at the ingredients of what you are feeding them - would you give your kids cornflakes and chewsticks to eat everyday?). Many pet owners bought their pets during lockdown and may now find it can be more expensive to keep them than a horse when problems start to arise. Im on the fence where this is going. For me a good vet is invaluable but their ability to do an effective job is hindered when they become a profit centre with a large group. Dogs are just revenue streams and owners are the mugs who foot the bill. With the market sewn up largely by groups now there is more and more only a have or not have choice. The medium term drivers of this choice is affordability. I would not be surprised to see companies like cvs enter the dental market which operates in a similar way.
Why would it move when it is simply in line with expectations..ie no nasty surprises.
The SP was cratered by the CMA and probably the economic outlook which again seems to be in line with expectations or even a bit ahead.
The market often seems to over react to CMA reviews which turn out to have limited impact…..my guess is that this will rise 20% when the CMA result is known…..IMO there are likely to be increase price disclosures to customers and some undertakings not to load prices of on-premises sales of medicines, there should be greater clarity about the level of local competition that has to be maintained…..I would bet that most people use the nearest Vet and few choose based on price. It is private healthcare after all and the vets can charge more or less what they want to.
A bit more admin, a few forced disposals……not much to get too excited about…and to compensate - then divert some growth investment where it has more effect (eg Australia).
Anyone care to put the downside case?
Joke share this is
...the shares didn't budge!