Pets at Home flags record year of sales, profit growth

Wilmslow-based pet and vet retailer Pets at Home Group said on Wednesday it is on track to report a record year of sales and profit growth.

The prediction came as the firm published a trading update reporting revenue growth of 5.8% to £319.4 million in the 12-week period to December 31, 2021.

Pets at Home said: “With this strong continued momentum into our final quarter, we now anticipate that FY22 group underlying pre-tax profit, excluding any potential impact from accounting changes, will be at least £140m …

“… the company-compiled consensus estimate of analyst expectations for the 53-weeks FY22 full-year post IFRS-16 underlying pre-tax profit was £135m, with a range of £134m to £137m.”

Pets at Home Group CEO Peter Pritchard said: “Our unique, omnichannel pet care strategy continues to deliver strong revenue growth, reflecting continued momentum in customer acquisition, engagement and spend as the benefits of our ongoing investment in capacity and capability really start to deliver.

“We are firmly on track to report a record year of sales and profit growth …

“I remain confident that the combination of our strategic investments, strength and depth of our exceptional leadership team and successful initiatives to increase operational efficiencies across the Group will underpin sustainable, long-term and profitable growth.”

Pets at Home announced in November that CEO Pritchard intends to step down in the summer 2022.

On Wednesday the company said the search for his successor is “well advanced and a further announcement will be made in due course.”

Pets at Home also said on Wednesday that Jane Balmain, Chief Operating Officer of the Vet Group, has signalled her intention to retire from the business by Spring 2023, having re-joined Pets at Home out of retirement over three years ago “to lead the successful turnaround of our veterinary operations.”

A seach for her successor will commence shortly.

AJ Bell investment director Russ Mould wrote: “Pets at Home is about to get a new master and they’re inheriting a stock market animal with a glossy coat, healthy teeth and plenty of pep.

“As the market leader in a nation of animal lovers its proposition looks compelling, particularly given many Britons added a furry or feathered friend to their household in lockdown.

“This larger pet population needs feeding, cleaning and caring for when sick, and Pets at Home has got all of those angles covered thanks to its retail, grooming and veterinary arms.

“The vet business is high margin and a recently launched partnership model, pairing with independent operators, helps reduce the capital required to expand.

“Recent growth in this part of the business was a little more prosaic than the retail division which had a particularly strong run-up to Christmas as people looked to treat their pets.

“Supermarkets and other non-specialists represent a competitive threat, but it is one that Pets at Home is facing down effectively with initiatives like its VIP Loyalty scheme, which saw a 13% increase in numbers in the 12 weeks to 30 December, supporting this fight.

“There was also substantial growth in its separate kitten and puppy clubs with all these schemes requiring relatively limited investment on Pets at Home’s part while still helping to make customers more sticky in terms of shopping with the business.

“Like most companies Pets at Home is not immune from supply chain issues but it is doing a decent job of managing these, benefiting from having a product range largely sourced in the UK which is neither perishable nor seasonal.

“Whoever takes over from incumbent Peter Pritchard will have a hard act to follow but his legacy at least means they have a fair chance of success.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.