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It is a perverse situation that good results strengthen the regulators hand, and poor results mean the recent share price collapse has accounted for a profit warning.
FWIW I expect the Board will say soothing things about the CMA review, but it is only when the results arrive that there will be a change in the SP.
There was a lot of big multi million £ buys this week, and looking at the data it would appears these are shares being bought from the pre-2020 period, with the sellers making a profit now and the buyers expecting great results and dividend payments (win/win situation).
The fact that the British Veterinary Association has come out with a strong statement to say that CMA are wrong is great for CVS
The price isn't rising on folk taking positons. if they are then there's balanced sells also.
recent days have seen pitiful trading volume but the fact that noone seems to be loading up is relevant.
will have to see if BoD load up, post results and out of closed period as current price is well below their buying prices over the past two years.
exciting but also a bit nervy.
Well played by the MM and funds, even buys to sells as the hold down the price to clean up any spare shares.
results due on the 21st Sept, and company already expecting stellar results.
Get ready for a big re-rate back to the 20's!
Over £5m in buys today, and 3 trades alone are £1m each!
18-Sep-23 16:21:58 1,496.50 91,205 Buy* 1,465.00 1,468.00 1m O
18-Sep-23 16:21:45 1,496.50 91,205 Buy* 1,465.00 1,468.00 1m O
18-Sep-23 16:21:45 1,496.50 91,205 Buy* 1,465.00 1,468.00 1m O
Get ready for a massive run back over 20's!
Hi Beardozer,
Can’t comment directly on the CMA remit but the reason why independent Practices sold out was essentially financial as they were offered huge sums and many kept their clinical duties but lost the admin side associated with their previous owner/ clinical director role.
I know many who basically did not need to work again in their 40s/50s and the current trend is to reopen as an independent practice in competition to corporates.
ATB
I jumped in again this afternoon, the trading is starting to gear up.
From the July Trading statement:
FY23 Financial Highlights:
Continued organic revenue growth with a 7.3% increase in like-for-like sales2 (FY22: 8.0%), consistent with the Group's organic revenue growth ambition of between 4% and 8%;
Adjusted EBITDA3 margins also expected to be within our stated ambition of margins between 19% to 23%
As such, expect great results on Thursday!
Been reading your posts with interest. First thing that comes to my mind: have you read any books about investment?
Before or after starting to invest: both are commendable.
Second thing is that by now we all know your OH is a vet.
Third thing is that you're an investor in SMT where timing really was everything.
There's a huge difference between investing in an Investment Trust and a single company where timing still remains everything!
Best quote: "Not sure about the uncertainty".
That goes for most of us! Obviously, CMA interest is going to have a negative impact on the SP and "wrist slapping" could be a huge underestimation. If there's talk of lack of competition then surely forced sales of practices must follow - totally illogical but what would anyone expect? The CMA could try asking why independent veterinary practices sold out but why bother? I bought the day it plunged and now wish I'd sold the following morning when it was up 240p. This sort of cloud can hang over a share for a long time. So a golden opportunity for a takeover while the SP's depressed?
Have towonder when, exactly, is the reversal going to kick off! into the weekend? will need to see 1580 stick before i'll believe it's finally happening.
gla
Shares traded the past few days, Thursday 7th September was the CMA news.
So appears that any of the "cheap" free shares have already been churned, hence why the flat price.
Results out next week, so expect this to jump up fast with any big buys, expect the ii have hovered everything up to sell back into the market next week.
Date Open High Low Close* Adj. close** Volume
14 Sept 2023 1,490.00 1,510.47 1,453.70 1,475.73 1,475.73 57,013
13 Sept 2023 1,506.00 1,524.62 1,463.00 1,490.00 1,490.00 224,472
12 Sept 2023 1,522.00 1,579.00 1,473.00 1,473.00 1,473.00 489,488
11 Sept 2023 1,606.00 1,675.00 1,497.54 1,506.00 1,506.00 610,222
08 Sept 2023 1,710.00 1,742.20 1,600.00 1,606.00 1,606.00 1,077,526
07 Sept 2023 1,780.00 1,780.00 1,365.00 1,713.00 1,713.00 1,495,752
06 Sept 2023 2,072.00 2,122.00 2,050.00 2,086.00 2,086.00 211,097
05 Sept 2023 2,118.00 2,126.00 2,100.00 2,100.00 2,100.00 44,574
04 Sept 2023 2,116.00 2,140.00 2,100.00 2,114.00 2,114.00 78,370
01 Sept 2023 2,100.00 2,135.08 2,100.00 2,112.00 2,112.00 75,994
Either it's the same 50,000 shares being endlessly traded or there must now be some cheap shares sloshing about. unless BoD have got orders in to accumulate and action on results day to get around the closed period, i don't get why another ii isn't showing their hand.
Thanks
I can't see how CMA can make a private company freeze prices. All they can do is address any monopolistic practices, which could increase competition and lead to a slowing of price increases.
But there are two underlying problems (OH is a vet, not for CVSG, but it's no different where where she is). The number of pets has increased through Covid and they haven't yet really got to the age where problems start to appear in volume, and Covid and Brexit resulted in many EU vets going home. The government could make recruitment of vets from the EU easier - that WOULD help prices
Basically it means :
A: increases in interest rates will not affect them.
B: they have cash to hand for further expansion
C: they can by goods/Services at volume to increase discount to decrease costs
D: they can take over locations of struggling vets and roll them into the group
CVS are profit making, debt has been pushed back to 2027, and they pay dividend.
This is why they expected the price to rise when it was in the 20's.
The drop was due to the CMA investigation, and as a lot of people know, these investigations take years, and maybe a price freeze, however considering inflation this makes the CMA investigation a sham as there is a material reason why CVS prices had to go up.
And as per previous posts, CVS would be a good takeover target by a large US fund as its a built essential business with international presence. So we could very well see a takeover for circa £2b = £25 a share
Good leverage of debt then
I seem to vaguely recall from my MBA 25 years ago that debt is far from being automatically bad ...
Read the CVS Group Interim Results - 24th Feb 2023.
Debt has been pushed back by 4 years, so just doesn't matter.
Considering also that the company over 2022 and 2023 did a lot of takeovers, that is were alot of cost has been incurred in expansion:
CVS is pleased to announce that it has acquired Top Vets Ltd on 25th May 2023.
Brunswick Place Veterinary Clinic has joined CVS on 31/03/202
East of England Veterinary Specialists has joined CVS on 28/02/2023.
On 22 February 2023, the Group completed a re-finance of the debt facility, increasing the total facility from
£170.0m to £350.0m, which comprises the following elements:
• a fixed term loan of £87.5m, repayable on 21 February 2027 via a single bullet repayment;
• a four-year Revolving Credit Facility of £262.5m, that runs to 21 February 2027.
Source: [LINK REMOVED]
@shearclass reckons they have a fair amount of debt...
"Balance sheet looks distinctly unattractive - £85m term loan repayable on 31/01/24, net debt of £35m"
Most analysts had it as a buy at £21. The results will be the interesting time. They are now my biggest shareholding - maybe gains will cancel out my loss on my previously biggest.... Scottish Mortgage (!), which I am not selling...
Profit taking from the dip hence the drop again.
Looking at volumes very little was sold on the dip and little has been sold the past few days.
Results out next week, so expect once any big buys to land this will rally north fast.
Company has minimal debt, is making lots of profit, and is expanding locations locally and international.
PCA surely?
Can't understand why they continue to fall - tempts me each time in to buying £500 worth more...
Damn, my finger was itchy a few weeks back to exit to rebuy lower. I guess I'll DCA and hope for a bounce here.
I assume they are on somewhere like Freetrade... wouldn't want to be paying £3.99 fees for a 1 share trade...
It could be that the CMA news just triggered the profit taking that's bringing the price down.
the only fact that give me (admittedly, nervous) confidene that this will bounce is the fact that most of the BoD buys for the past two years have been at 1800+. at the current price it's a 20% discount to the price they thought was good value!
Looks like MM and others in the background trying to buy up everything on the cheap:
Day so far:
Sold Value £595.23k
Bought Value £717.15k
With the drop last week, the sell off the bounce, and the buys yesterday and today, everything is pointing towards as fast re-rate to the 20's as we get closer to the results news.
Fair enough - Lineas are Mars but not that big then. OH who is a vet reckons IVC are the worst at what the CMA is looking at (not being clear about ultimate ownership)