Member Info for HorisM

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

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]

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.

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.

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

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

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.