CVS Group: Thoughts on activist letter – buyback or build?

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CVS Group: Thoughts on activist letter – buyback or build?

Equity Research

UK Mid & Small Cap Leisure/Consumer

13 May 2026

CVS Group

Thoughts on activist letter –

buyback or build?

While a buyback could support near-term EPS, the improving CVSG.L/CVSG LN EQUAL WEIGHT

NEUTRALreturns profile of the H1 26 acquisition cohort shifts our UKLeisure/ConsumerMid & Small Cap

preference towards Australian M&A, where scale and Price Target GBp 1340

sustained returns underpin LT value creation. Price (12-May-26) GBp 1141 Potential Upside/Downside +17.4%

Source: Bloomberg, Barclays Research

Our view:

• This morning, the FT has reported on a letter written to the CVS board by an activist investor UK Mid & Small Cap Leisure/Consumer

(Converium Capital who have built a 2% stake in CVSG). The FT link is here, and the full letter Richard Taylor

link is here. In the letter, Converium Capital called on CVSG to launch a £100m buyback “to +44 (0)20 3555 2650

capitalise on its currently languishing share price, which would leave room for CVS to pursue richard.e.taylor@barclays.com

Barclays, UK up to £45m worth of acquisitions and remain within its debt targets”, noting “repurchasing

the company’s materially undervalued stock today is the highest-return use of capital Sharanya Gajapathy

available to the board”. +44 0(20) 7773 0188

sharanya.gajapathy@barclays.com

• In weighing up the investment case, part of the reason for our more cautious EW rating on Barclays, UK

CVS Group has historically been driven by the FY24/FY25 cohort of acquisitions in Australia

failing to generate returns above the cost of capital, alongside limited disclosure beyond year

1 contributions, which made it difficult to give management credit for delivering synergies.