Wilmslow-based pet and vet retailer Pets at Home Group reported revenue growth of 6.5% to £774.2 million for the 28-week period to October 12, 2023.
However, statutory profit before tax (PBT) fell 35.2% to £34.7 million “reflecting the decline in underlying PBT and non-underlying costs of £13.1m associated with our DC (distribution centre) transition, the consolidation of our support offices and a write- down of our investment in Tailster.”
Interim dividend per share is held at 4.5p.
On its current trading and outlook, Pets at Home said the early weeks of Q3 have started well.
“Our DC is now supporting all stores, availability has recovered, and sales momentum has improved,” said the firm.
“Retail LFL growth has been c4%, with encouraging signs as we build towards peak including record Halloween trading and good initial sell through of Christmas ranges.
“Our vet business continues to see strong performance underpinned by improved vet capacity.
“We make no change to full year underlying PBT guidance.
“We have experienced higher logistics costs and disruption than originally planned, but these have been managed and the impact on profit expectations contained without compromising our commercial proposition or overstretching our operations.
“The consumer environment remains uncertain, but our sales growth has normalised and providing this momentum continues, we are confident in delivering full-year group underlying PBT of c£136m, in line with analyst consensus.
“An improved H2 performance is underpinned by continued market resilience and the normalisation of distribution costs, which are expected to be in line with H2 FY23 on an underlying basis.”
Pets at Home CEO Lyssa McGowan said: “H1 has been a critical period in laying the foundations of our platform for future growth.
“This was the period of high activity when we relaunched our brand, launched our new DC, built our new digital platform, and made progress expanding and improving our physical assets across Retail and Vets.
“This period has not been without challenges, but we have been able to manage these well and are on track to finish FY24 with a refreshed, modernised infrastructure, fit to deliver growth for many years to come.”
REACTION:
Susannah Streeter, head of money and markets, Hargreaves Lansdown: “Although overall retail sales fell back in October, and the volume of Black Friday transactions was down slightly on last year, pet lovers aren’t yet showing such hesitance when it comes to spending on furry friends.
“Pets at Home is sticking to its full year guidance.
“The company struck a note of positivity after revenue grew 8.6% for the half year, ahead of earlier ambitions of 7%.
“Desires to keep our four-legged friends fed, watered, and entertained has helped the company reach £1 billion in half year sales.
“Conditions still seem clement for the pet chain, although the Competition and Markets Authority’s ongoing investigation into the vet sector is still a headwind.
“While this isn’t the entire business case, an unfavourable set of rulings could hamper sentiment, but there’s cautious optimism that this won’t be the case.
“In the broader business, fears that the lockdown surge in ownership would subside don’t seem to be materialising.
“Working from home habits have kept the trend strong and recurring revenue is bedded in.
“However, given the competitiveness online, the company must ensure it keeps all its ducks in a row as it continues to expand.’’