The main developments this week involve CVS Group and Indra — two companies at the heart of ongoing regulatory and policy shifts. In the UK, the CMA’s provisional remedies for the veterinary market study brought clarity to a year-long probe, largely confirming our expectations but without the impact on the stock we expected. Meanwhile in Spain, Indra emerged as the standout beneficiary of the government’s zero-interest defense loan program, securing more than €6.5 billion in potential funding.
CVS Group
The UK Competition and Markets Authority’s provisional remedies, published in October 15h removed the single biggest overhang for the stock. While the authority concluded that competition in veterinary services isn’t working effectively, its remedies stopped far short of structural interventions.
There will be no forced divestitures, no price caps on consultations or treatments, and no regulation of medicine prices — just a £16 cap on prescription fees and new transparency obligations.
The key measures include (of a total of 21 remedies):
- Mandatory publication of price lists for common treatments and diagnostics.
- Clear ownership disclosure (whether a clinic belongs to CVS, IVC, or others).
- Automatic written prescriptions, allowing owners to buy medicines elsewhere.
- Itemised bills and written estimates for treatments over £500.
- Price and quality comparison tools, to be hosted by the RCVS.
- Clinical independence policies, ensuring vets aren’t pressured by commercial KPIs.
These rules aim to make the market more transparent — but they don’t fundamentally alter the business model of large veterinary groups like CVS.
Risk Avoided, Margin Managed
The prescription fee cap will slightly hit CVS’s margins, but that’s manageable given the scale of its Animed Direct online pharmacy and its ability to adapt prices and services. What mattered far more for investors was what didn’t happen: no divestitures, no price regulation on core services, and no mandatory separation of retail and clinical operations.
In other words, the CMA’s decision removed the legal overhang that had depressed the share price since mid-2023. The market reaction was immediate — a relief rally in early trading that reflected the confidence in the company’s fundamentals (+13% at its peak). Yet, the stock lost all this gain by the end of the day, showing either less enthusiasm or a misinterpretation of the remedies.
The stock’s rebound may not be the end of the story — as the CMA finalises its decision in early 2026.
In our view, the regulatory catalyst that led us to include CVS Group in our portfolio has largely played out. The final CMA market study is unlikely to deviate meaningfully from the provisional remedies published earlier this week, so we don’t expect a major market reaction once the final report is released.
That said, we still see upside potential. The proposed remedies appear to favour larger veterinary groups over smaller independent practices, which could strengthen CVS Group’s competitive position in the long run. For this reason, we’ll continue to hold the stock until the CMA publishes its final report.
Indra
The Spanish defense and technology group continues its impressive upward trajectory — already up ~23 % since our portfolio entry just weeks ago. This week, Indra became the principal beneficiary of Spain’s newly launched preferential loan program for the defense sector, receiving €2,178 million in direct funding plus €4,404 million via joint projects — a total exceeding €6.5 billion in zero-interest capital support.
Fundamental performance is strong. In H1 2025, the company’s backlog surpassed €9.5 billion, up 33 % year-on-year. Revenues advanced 6 %, while net profit leapt 88 % to €215 million, bolstered by TESS Defence consolidation. The defense division delivered 16 % top-line growth in Q2, with an EBIT margin of 16.7 %.
These financials come at an opportune time: Spain is ramping defense spending to 2 % of GDP and committing large-scale capital to local industry. Indra is not just a passive recipient — it is actively executing a strategy of vertical expansion and technological independence. From the acquisition of Hispasat and integration of EM&E, to the collaboration with Rheinmetall and subsidized R&D from the EIB, the company is positioning itself as a European strategic champion in defense, space, and dual-use technologies.
