Pets at Home revenue rises but new lockdown looms

Shares of Wilmslow-based pet and vet retailer Pets at Home Group plc fell about 3% on Tuesday as its concerns about a new UK lockdown took some shine off its reported revenue growth of 5.1% to £574.4 million in the 28 weeks to October 8.

The company’s shares have soared more than 90% in the past year amid a surge in pet ownership.

“Pet ownership, a proxy for longer-term market growth, is increasing, and the lockdown has, if anything, accentuated our emotional bond with pets, as they play a more significant role in our daily lives,” the company said.

Underlying pre-tax profit fell 5.1% to £39.6 million pounds. Interim dividend per share will be 2.5p, maintained with the prior year.

On current trading and outlook, Pets at Home Group said: “The sustained strength in performance we saw across both our retail and veterinary operations during Q2 has continued into our third quarter, and we continue to take market share across all channels. 

“While we are less seasonally-dependent than many other retailers, our final quarter last year included an exceptional period of brought forward demand, ahead of national lockdown across the UK. 

“Furthermore, COVID-19 continues to create a number of material uncertainties around the near-term trading environment, from a potential escalation of current restrictions on a national level, to reversion to a tiered system of localised restrictions. 

“We remain an ‘essential’ retailer and have adapted our operations well to be able to continue providing pet care to our customers with minimal disruption.

“Our stores and First Opinion practices continue to follow the protocols we introduced earlier this year around safe provision of goods and services, and we have increased our capability to engage, serve and fulfil our customers remotely.

“Our liquidity remains strong and our balance sheet robust.     

“At this stage, absent any escalation of restrictions, or other significant disruption to our operations, we now anticipate full-year underlying pre-tax profit to be in line with the prior year, with the estimated financial impact of the pandemic not fully offset by this year’s business rates relief.”

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