Pets at Home warns on outlook as revenue tops £1bn

Chesire-based pet and vet retailer Pets at Home Group Plc said on Thursday its revenue grew 10.2% to exceed £1 billion for the first time in the 52 weeks to March 26, 2020 — but warned it expects profit for the first half of its current year to be “materially below the prior year.”

Wilmslow-based Pets at Home said revenue grew 10.2% to £1.058 billion and underlying pretax profit rose 11% to £99.5 million.

Pets at Home said final dividend per share will be 5p “reflecting our strong performance in FY20 and robust liquidity and balance sheet, giving a total of 7.5p for FY20, equal with the prior year.”

However, Pets at Home CEO Peter Pritchard said of current trading: “… nearly all of the exceptional demand witnessed in the closing weeks of Q4 has unwound during Q1 of the current year which, combined with our adherence to guidelines on social distancing across our operations and restrictions on the sale of pet products and health care services deemed non-essential, has temporarily depressed normal levels of group turnover.

“While online sales have remained at materially elevated levels, matched by improved capacity and good product availability, they are, in isolation, unable to mitigate the reduced level of in-store sales, and their weighting towards food, together with an additional £5m of costs relating to our initial response to COVID-19, has had an adverse effect on profits, margins and cashflow in the financial year to date. 

“Accordingly, we anticipate H1 FY21 Group pre-tax profit, including both the one-off benefit from the business rates holiday, which will be utilised to partially mitigate the estimated financial impact of COVID-19 this year, as well as additional operating costs related to social distancing, to be materially below the prior year. 

“It remains difficult to make a clear assessment of how consumers will react as we emerge from lockdown and we, therefore, do not feel it is prudent to provide full-year guidance at this stage.

“We will, however, reassess this at our Q1 update at the end of July.”