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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)
If Mars wanted to buy CVS Group the deal would go through.
There are still plenty of competition in the UK and globally.
Examples:
INDEPENDENT VETCARE LIMITED = 2,500 locations across 20 countries
LINNAEUS VETERINARY LIMITED = 75 loctions
BOEHRINGER INGELHEIM ANIMAL HEALTH UK LIMITED = 176 affiliates worldwide
Mars may have a problem with the CMA though if they take over CVSG - what % share would their group then have ?
All the CMA can't really do anything, CVS prices have gone up due to the macro economic situation.
CVS are looking at reducing this costs over the next year, and will be yielding better profit margins.
CVS have developed a great international presence, and this would be a great takeover target now.
In 2017, VCA, which owned more than 1,000 vet clinics in North America, was acquired by Mars Inc,
Mars paid $9.1 billion including $1.4 billion in outstanding debt.
Zoetis: Revenue: $7.78B, Market Cap: $71.33B
MSD Animal Health, Revenue: $5.57B, Market Cap: $276.18B
Boehringer Ingelheim, Revenue: $4.89B
Elanco, Revenue: $4.76B , Market Cap: $5.96B
You have to wonder about the CMA and whether there's a political motive behind the investigation. They already know the answer to increasing prices, and they can't actually do anything about those prices.
Looking forward to £20 even.
Looking forward to this moving back to the 20's fast over the coming days on the way to the results.
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%
Response to CMA review into the veterinary services market:
As the CMA have recognised, there continues to be a significant shortage of vets in the UK and employment costs represent the most significant proportion of our cost base. Our pricing reflects this and other inflationary pressures experienced in recent years
We have a clear strategy to continue to expand our network and to improve clinical care through investment in facilities, equipment, technology and our people.
Based on new value?
Most analysts were saying strong buy at £21!
hopefully I will be back in the black today, though it's still struggling to get through £15
There’s been updating this morning for CVSG group.
RBC Capital Upgrades CVS Group Plc. (CVSG:LN) (CVSGF) to Outperform
September 13, 2023 1:44 AM
RBC Capital analyst Charles Weston ...
I really don't understand the continued fall. The promise of a little bit of wrist slapping for lack of opaqueness on competition from the CMA doesn't knock a third off the value of a company...
And the CMA can't make vets cut prices. They can only consider where there is an unfair monopoly (with different brands as part of the same group not being apparent enough).
Forward looking it should be good news for all vets as pet ownership has increased - and lots of pets bought during Covid are still to get to an age where things start to happen more frequently.
I think I need to buy some more... whether straight back to £21 happens next week - I am a bit more doubtful. Didn't manage to buy right at the bottom, but in the low £15s so sitting on a very small loss atm.
Very good point. I agree CMA regulations don’t happen overnight - it’s time consuming and years away.
This company trades globally and not just UK. CMA will take time…..
Next week’s trading statement is going to be very profit positive with strong forward guidance.
Heading back to £21 and beyond next week. Don’t forget this sought after company only has 71 million scarce shares. This is why it’s very volatile. Already made good profit when it dropped to £13.65 and then recovered to over £17.
Market traders have engineered this drop but can only do so much. It can only go back up by close of today.
Only one largeish sell recently (10,000 shares)...
Lots of playing about. Surprised it's going any lower - if the fundamentals were OK at £21 (of course they may not have been...) then they'll be more than fine at £15 - any CMA ruling cannot knock that much value off a company. Of course it may take 2 or 3 years to rule, and results out next week may tell a different story about the underlying...