Pets at Home FY sales lifted by vet practices

Pets at Home posted a jump in sales for the year to 30 March, helped in part by a solid contribution from its vet practices and new openings.

Group revenue was up 7.2% from the comparable period a year ago to £834.2m, with like-for-like sales up 1.5% and total income from the joint venture vet practices up 24.6% to £47.1m.

Statutory pre-tax profit was up 5.8% to £95.4m, while profit before tax and exceptional items related to acquisitions and disposals edged up 1.1% to £96.4m. Merchandise like-for-like sales were up 0.8%, while sales in Services grew 7.9%.

Meanwhile, the company delivered on its rollout targets for the year, opening 15 new superstores, 50 vet practices and 50 grooming salons.

Chief executive officer Ian Kellett said: "We are uniquely positioned as the only UK pet business delivering an integrated omnichannel and services offer, supported by our fast growing Vet Group, market leading private labels and expert colleagues. In an evolving consumer environment, we are taking steps to reposition prices on own label Advanced Nutrition and pet essentials and have made some initial changes to branded food lines.

"Encouraged by the reaction of our customers and having seen an improvement in Merchandise LFL to 1.0% in the 16 weeks since launch, we will move swiftly to deliver even better value. We are confident this is the right path for success and will give us a strong platform for sustainable future growth."

Numis said pre-tax profit of £96.4m is slightly ahead of its estimate of £96.2m and consensus of £95.9m.

"Despite the near-term challenges facing the business, we see the moves to address its price position as significant, enabling the business to get back on the front foot. We believe the scale, quality and visibility of Pets at Home’s long term growth opportunity should support a higher valuation, and move our recommendation from add to buy," Numis said.

At 0938 BST, the shares were up 2.7% to 164.90p.