Vetshare is winding up its vet supply business but continuing to conduct a buying business in the name of Independent Vets of Australia Pty Ltd, a wholly owned subsidiary.  Its distribution arm had continued to make decreasing losses but achieved no sign of reaching real profitability.

At 30th June 2017 Vetshare had accumulated losses of $3,867,941.  To put things in perspective its remaining equity of $1,150,851 was less than the value of many individual veterinary practices.

Along the way it had closed its own warehousing operation realised the value of its stock and effectively became an agent for a supplier.  That phase has now ended and it is conducting a buying group which is effectively an affiliate of Provet.

We wish it well, but note that it has become the opposite of what it set out to be.

There are 5,986,792 shares on issue and the net tangible asset value as at 30th June 2017 is 19.223 cents per share.  That is taken to be its market value.

A modest number of shares were issued to directors during the 2017 year in lieu of cash payment.

The closure of the group’s wholesale supplier veterinary medicine and other products in late August 2017 incurred a loss of $97,634.

Although a small profit of $9576 was attributed to Independent Vets of Australia (IVA) the group’s buying business during the 2017 financial year this figure is too small to draw conclusions from given that it was operating with similar management as to the now ceased wholesale distribution business.

We note that a financing facility of $800,000 which the group had access to was cancelled in September 2017.

Conclusion
It is too early to tell whether this latest iteration of the business will be successful long term.  If so the group has a lot of tax losses to absorb in order to rebuild its equity base before it would have to pay a dividend.

We can but hope that it manages a turnaround in its new form.

Disclosure
I purchased shares in Vetshare Ltd in its initial offering in my family superannuation fund which still has ownership of them. Many veterinarians also bought Vetshare Ltd shares.

Best wishes to all vets,

Graham Middleton