Pets at Home reports good first quarter progress

Cheshire ‘pet omnichannel retailer’ Pets at Home reported good progress during its first quarter, in a trading update today.

The Handforth-based business saw group revenue grow 8.1% to £277.4m, while retail revenue was up by 6.9% to £245m.

Group like-for-like revenue in the 16 weeks to July 20 was 6.21% better, while retail like-for-like revenue showed a 5.3% improvement.

It revealed that, as part of its ongoing investment appraisal of new stores, the group has decided not to proceed with the opening of two stores for which lease arrangements had been committed.

The full cost of the leases, at around £1.6m, will be absorbed within underlying profit in the first half, it said.

Full year profit and cashflow outlook remains in line with expectations and guidance, it added.

The business has launched an ‘easy repeat’ delivery across about 350 online products, giving more convenience to customers through an automatic repeat delivery to home or collect in-store, at prices lower than online competitors.

It has also reinvigorated sales of the ‘Best Start In Life’ healthcare plan in the vet practices with a 50% price discount, improving practice registrations with one of the group’s most important customer groups, puppy and kitten owners.

During the period the group opened one store and seven vet practices, in line with its plans for the year.

Chief executive Peter Pritchard said: “I am really pleased with our start to the year, particularly as trading across both retail and the vet business has been consistently strong.

“There are so many initiatives that are working: great promotions and more lower prices, capitalising on the hot weather with our biggest ever summer and cooling product range, the launch of our easy repeat online delivery service, and an excellent ‘Best Start in Life’ puppy healthplan campaign in vet practices.

“We are also bringing our offer together more effectively with the launch of the VIP puppy club online and on our App, which introduces customers to both sides of our business.”

He said: “We have made great progress with these initiatives, particularly the ongoing momentum in retail more than a year on from the start of our price repositioning programme.

“But I believe we need a sharpening of focus to become a business that will continue to win over the long term, where it is essential that we maximise our assets and data as an integrated pet care business and reinvigorating the customer experience in-store becomes key.

“We know one of the biggest opportunities in our business is to accelerate the maturity and returns of our vet practices.

“We, therefore, need to address the challenges, such as the shortage of veterinary practitioners and the associated cost and cashflow support that is required.

“At the same time, there will always be a need to keep our retail pricing competitive.”

Mr Pritchard added: “I know we have the capability to address these challenges whilst continuing to deliver the three year financial plan we have committed to.

“I am confident that we have a really exciting future ahead and am looking forward to sharing this strategy in more detail at our November interim results presentation.”

Pets at Home operates from 449 superstores located across the UK, and provides the UK’s largest small animal veterinary business with 468 practices, run principally under a joint venture model using the Vets4Pets and Companion Care brand names, as well as seven veterinary specialist referral centres.

Pets at Home is the UK’s leading operator of pet grooming services offered through its 310 grooming salons.