SUNDAY NEWSPAPER SHARE TIPS: Buy vet and pet crematoria firm CVS, but sell Royal Mail and Provident Financial

We round up the Sunday newspaper share tips. This week, Midas looks at vet chain CVS Group and middle class clothing brand Joules, while the Sunday Telegraph analyses Royal Mail. 

The Sunday Times meanwhile delves into why The Lady from the Provvy has deteriorated.

FINANCIAL MAIL ON SUNDAY 

The British love their pets. There are around 20 million in the UK, including 8.5 million dogs and more than 7 million cats. Numbers are rising and attitudes are changing.

Lots of money in veterinary services

Lots of money in veterinary services

Once, owners were happy to feed their pets simply with tins of Pedigree Chum or Kitekat. Visits to the vet were few and far between. Today, Fido and Mopsy can feast on grain-free food, North Sea herring and wild bison, all in handy pouches.

Annual check-ups are increasingly the norm and, like their owners, pets are living longer and benefiting from medical progress.

CVS Group, Britain's largest vet chain, is well placed to profit from these trends. It owns about 400 surgeries in the UK and a fast-growing operation in Holland too.

CVS also runs Animed Direct, an online food and medicine business, it operates a loyalty scheme for pet owners and owns seven pet crematoria.

CVS Group's financial year ends on Friday, a trading update will be released next month and results will be announced in September. Analysts currently expect a 21 per cent rise in revenues to £265million, a 33 per cent surge in profits to £33.2million and a 14 per cent dividend increase to 4p 

Midas verdict: At 1330p, CVS shares are not cheap but the price reflects the company's reputation as a strong and growing business in a market with long-term potential. Shareholders should not sell out now and investors with a five to ten-year time horizon could even find value at current levels.  

Read the full Midas column here  

SUNDAY TELEGRAPH

But for a few thousand votes, the Royal Mail could have been heading back into state hands by now, says James Ashton in this week's Questor column for the Sunday Telegraph. 

Royal Mail shares have perked up since annual results in mid-May but are still a long way adrift of their peak in early 2014 when they broke £6.

However the core UK business is struggling to keep up with the pace of change as the increase in income from parcel deliveries is not offsetting the loss of revenues from letters.

Meanwhile the firm has proposed closure to its future accrual retirement pkan next year or else its contribution will soar from £400million annually to more than £1billion.

Trading on 12 times this year's forecast earnings feels too generous. The Royal Mail has too many challenges ahead to deliver. 

Sell. 

The Queen talks with Royal Mail CEO Moya Greene as she tours the Royal Mail Windsor postal delivery office in Windsor

The Queen talks with Royal Mail CEO Moya Greene as she tours the Royal Mail Windsor postal delivery office in Windsor

SUNDAY TIMES 

Old habits die hard in the world of doorstep lending, says John Collingridge in this week's Inside the City column in the Sunday Times.

Last week investors in Provident Financial learnt this the hard way, after it admitted its attempt to modernise cash collections had gone horribly wrong.

The sub-prime lender's shares dived more than 17 per cent - leaving investors such as Neil Woodford nursing hefty losses - although they have since recovered a bit.

Provident's doorstep lending business has relied for decades on an army of self-employed collection 'agents'. The Lady from the Provvy (they are typically women) knocks on the same doors, usually lending a few hundred pounds while catching up over a cup of tea. 

This relationship has stood the test of time, allowing the company to ride out recessions thanks to its agents' knowledge of their customers' circumstances. Earlier this year the Provident decided to 'eliminate' its 4,500 agents. It had already slashed them from 10,000 in 2013. In their place it is hiring 2,500 full-time 'customer experience managers'.

The Provvy's problem is one of incentives and habits. Agents were paid via commission - 8 per cent of every loan. They could work when they chose, fitting collections around their busy lives. The harder they worked, the more they and the company earned. New employees are paid salaries of up to £27,000, plus a bonus of up to 10 per cent based on a waffly new metric of 'customer experience'.

The results of this overhaul are not encouraging: agents are quitting before they're fired, collections and sales are falling, leaving a £40million shortfall. Customers, perhaps baffled by the new approach, are quitting. Profits in the division will slump by almost half to £60million this year. 

Rivals will recruit its former agents and swallow customers.

Sell.