Independent Vet Care sold to US bidder?

Re: Independent Vet Care sold to US bidder?

Hannah Wynne Richards — Sat, 26 Jul 2014 11:43:34 GMT

Another who'se totally confused

100 practices with a total turnover of £6.7 million means each practice averages a turnover (not profit) of £67k

SPVS figures give the average turnover per veterinary surgeon approx £150k

Each practice consists of 0.5 veterinary surgeons?

Wynne

Re: Independent Vet Care sold to US bidder?

Bob Russell — Sat, 26 Jul 2014 11:20:23 GMT

The figures cannot be right as 100 practices must be generating more than £6.7m. 100 practices like mine would generate in excess of £25m. I must be interpreting the figures incorrectly!

Little in the corporate sector makes much sense to my limited business brain. We work hard, spend money very efficiently but would have very little left over to pay owners (other than me!).

Perhaps someone could explain how the corporates operate please!

Re: Independent Vet Care sold to US bidder?

Hannah Wynne Richards — Sat, 26 Jul 2014 10:46:29 GMT

It's profit as return on capital, not % turnover that really matters - and 0.6% is abysmal. Reminds me of RBS in 2007

Wynne

Re: Independent Vet Care sold to US bidder?

Jo Dyer — Sat, 26 Jul 2014 10:19:43 GMT

[quote user="Hannah Wynne Richards"]

My calculation is that if 100 practices make £600k then each practice makes £6k !

[/quote]

I read it as £6.7million turnover (they call it 'revenues') and £667k profit (EBIDTA) so around 10% profit after paying everyone, which sounds pretty good.

Maybe they are planning to 'Americanise' the practises and thereby squeeze out more profit? Or maybe it's just one of those ego projects that CEO's take on shortly before the company collapses and they get fired!

Re: Independent Vet Care sold to US bidder?

Hannah Wynne Richards — Sat, 26 Jul 2014 10:07:31 GMT

There's definitely something weird going on!

Wynne

Re: Independent Vet Care sold to US bidder?

Colin Thomson — Sat, 26 Jul 2014 09:57:27 GMT

[quote user="Hannah Wynne Richards"]These figures don't remotely come close to adding up![/quote]

Indeed. Because we haven't seen all the figures.

Re: Independent Vet Care sold to US bidder?

Hannah Wynne Richards — Sat, 26 Jul 2014 09:37:30 GMT

I bought my practice in 1996. If I had drawn a standard assistant's salary, and then had a 0.6% return left on capital, the bank would have shut me down in 1997 These figures don't remotely come close to adding up!

Wynne

Re: Independent Vet Care sold to US bidder?

Linda Filshie — Sat, 26 Jul 2014 09:26:13 GMT

I work at an IVC owned practice and while I earn a respectable salary it's certainly not at banker levels!

Re: Independent Vet Care sold to US bidder?

Hannah Wynne Richards — Sat, 26 Jul 2014 09:13:22 GMT

My calculation is that if 100 practices make £600k then each practice makes £6k !

Admitedly that's after paying veterinary salaries, but unless those employed veterinary surgeons are on bankers' salaries (highly highly unlikely) it's still an abysmal return on invested capital. 0.6% return on capital (before tax) just isn't viable.

I'd suspect some sort of Ponzi scheme - which always gets found out sooner or later - but these days isn't punished.

Wynne

Re: Independent Vet Care sold to US bidder?

Jo Dyer — Sat, 26 Jul 2014 08:24:38 GMT

[quote user="Colin Thomson"]Well my figures suggest on average 100 practices made £76,000 each but were sold for £1 million each, having previously been bought for £400,000 each, giving a capital gain of £600,000 per practice to the original buyer, August Equity. Their total capital gain would be £60 million. [/quote]

That's how I read it. That is way more than any other company would pay for practices, and on past performance (the only realistic measure, surely) it will take over a decade just to break even. Or do they have inside knowledge about some sort of rosy future for veterinary practice that the rest of us mere mortals have missed? Let's hope so!

Re: Independent Vet Care sold to US bidder?

Colin Thomson — Sat, 26 Jul 2014 00:34:38 GMT

[quote user="Michael Woodhouse"]

So 100 practices make £600k each!

[/quote]

Well my figures suggest on average 100 practices made £76,000 each but were sold for £1 million each, having previously been bought for £400,000 each, giving a capital gain of £600,000 per practice to the original buyer, August Equity. Their total capital gain would be £60 million.

Colin

Re: Independent Vet Care sold to US bidder?

Michael Woodhouse — Sat, 26 Jul 2014 00:17:01 GMT

So 100 practices make £600k each!

Re: Independent Vet Care sold to US bidder?

Colin Thomson — Fri, 25 Jul 2014 23:55:48 GMT

[quote user="Bob Russell"]

Profit for 100 practices looks pretty miserable to me!

I accept that figures can be deceptive!!

[/quote]

Last published accounts are probably not the last accounts - if you get my drift.

My understanding is Summit bought at around £100 million on 13 times EBITDA , which implies a profit of £7.6 million. However its thought August Equity bought most of the practices on the basis of 5 times EBITDA, so they may have made around £60 million in 2.5 years.

Watch this space.

Colin

Re: Independent Vet Care sold to US bidder?

Laurence Webb — Fri, 25 Jul 2014 22:46:22 GMT

Amazon must be one of those 'not for profit' philanthropic businesses I've been hearing about recently.

Re: Independent Vet Care sold to US bidder?

Rob Loxley — Fri, 25 Jul 2014 21:28:15 GMT

[quote user="Bob Russell"]I would be able to figure out why Amazon turns over billions, has destroyed a chunk of the High St but still makes a loss[/quote]

Paying accountants lot to avoid tax bills!

Re: Independent Vet Care sold to US bidder?

Arlo Guthrie — Fri, 25 Jul 2014 17:45:07 GMT

Meanwhile, in other corporate news today, I see Vets4Pets and Companion Care are sending out teams of crack SAS-trained staff to go and kettle pet owners at a National Trust venue near you:

http://www.vetsurgeon.org/blogs/veterinary_news/archive/2014/07/25/118122.aspx

Re: Independent Vet Care sold to US bidder?

Bob Russell — Fri, 25 Jul 2014 17:18:52 GMT

Profit for 100 practices looks pretty miserable to me!

I accept that figures can be deceptive!!

Clearly I am not a business genius or I would be able to figure out why Amazon turns over billions, has destroyed a chunk of the High St but still makes a loss. 100 veterinary practices make £600K profit and one of the leading on-line veterinary drug sellers makes a £1.2 million pound loss.

It used to be that businesses that were not profitable put up the 'closed for business' sign!

Confused!

Re: Independent Vet Care sold to US bidder?

Laurence Webb — Fri, 25 Jul 2014 16:41:33 GMT

I did notice rapid expansion when that happened. Not working there I couldn't say what impact that had on the day to day management.

Re: Independent Vet Care sold to US bidder?

Mark Hedberg — Fri, 25 Jul 2014 16:20:23 GMT

Well, when they were owned by August Equity, a private equity firm, did you notice a difference?