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So right. Vets get little more than 15 quid an hour and are under relentless pressure to bill. It’s not sustainable. The corporates need to be looked at and fast
We know they'll be clamouring for stories of pets killed because too expensive to fix.
interestingly, BBC compared Austria with UK, the difference being they don't do insurance so much so dont get the inflation that creates in bills... bit like US healthcare.
Indeed - it's the trade off; a bigger organisation will have more costs in the management hierarchy, but will also benefit from economies of scale
And the proceeds to the previous owners of the vet practices…
Got to pay for Head Office somehow…the HQ people will earn way more than the vets.
The SP dropped from 2100 to around 1700 on the original announcement about the investigation.
Oversold, again.
OH is a vet. At last she is being paid a reasonable salary - with 30 years experience. Her salary has gone up because of a shortage of vets, in large part due to Brexit (many EU vets have returned home). Practices have to pay more to attract vets, so the customer has to pay more. Also she says meds are increasing rapidly in price.
So, while I understand your point, I don't think that's the whole story; on vet (and nurse) salaries it's simple supply and demand.
(she doesn't work for CVSG, or Pets, or Lineas/Mars but for an RVC practice - their requirement is simply to break even; they are not a cash cow, but their prices are comparable with other practices)
So CVS are being investigated for "exploiting their customers". Seems strange as dividend payments are poor and the sp even before this CMA intervention had not exactly been doing well. Now the sp has crashed 40% as a result. Wonder if the CMA can find where all these great exploitation bags of money are going ?
As a retired vet, I well remember the days when young vets progressed up the ladder - if they so wished - to become a partner in the practice. That practice was owned by the vets; it could be anything from a one-person practice to a dozen or more - but they OWNED the practice and were free to charge whatever they wanted; however, this was dictated by market forces (i.e. neighbouring 'rival' practices). Everything was in balance, and the veterinary preofeesion was held in high regard.
When the corporates entered the market, everything changed. They became the 'dictators'. Profit became the be-all and end-all of everything. Over time, the public - who are not stupid - cottoned on to this. The result - the profession that I was once proud of is now being treated (quite rightly) as nothing more than a money-grabbing machine.
I don't expect this post to accumulate any 'likes'. After all, I am only a (retired) vet with 40+ years' experience on the front line, not an investor....
Who would have thought:
1 people take their pets to a local vet
2 the vets will copy the practices of private healthcare and private dentistry
3 healthcare no longer tolerates one man bands/small practices which is where the cranks reside
4 consolidation leads to concentrations (4 but perhaps 3 mobile networks are enough? So why concerned about 6 vet groups).
5 there are now secondary referral units akin to private hospitals…these provide much more specialist pet healthcare and are £££ to build, staff and maintain.
The CMA seems to be talking up its enforcement / remediation role…but I am not sure what they are going to be able to do beyond making vets tell customers they can buy services elsewhere and they may be cheaper (but that will involve more effort by the customer and delays in administering medication so I Don’t expect a great change in customer behaviour).
Today would appear to be a buying opportunity for those that expect modest CMA recommendations.
Yup, broker algo's will be set tp collect a few stops today as some will lose their shares in early market crash, share price 1900p this time last year and all wiped off on a lengthy review process that will discover running a business in the UK is thwart with regulation cost,enployer costs, energy costs, product costs, and more costs. A small business is not easy to run and therefore larger business will be more cost effective, hence the growth of CVSG .
The market seems to have forgotten that it trashed the SP by 30% the last time the CMA opened its mouth. It's also forgotten that a significant percentage of CVSs business isn't even in the UK.
Oh well, it's a great buying opportunity for shares in a great Company.
Indeed, my point was they launched the start in September 2023 and are still in the process, government depts work at vastly slower pace than any business that needs to generate income, profits etc.
Nope, that's the consultation period to get industry feedback on lunching a formal market investigation...
Next steps
"The CMA has launched a four-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 received and a decision will be made on how to proceed."
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