Post-lockdown rise in pet ownership bodes well for pet care group
Pets at Home, the Cheshire-based pet care group, said first quarter revenues have fallen by one per cent, in a trading update today.
The Handforth group said early in the quarter, covering March 27, to July 16, like-for-like revenues dipped by 13.5% as lockdown measures were imposed, but almost recovered in the latter part of the quarter.
It said liquidity remained strong throughout the period, with cash balances and undrawn banking facilities, including the additional £100m revolving credit facility raised in May, totalling £267m at the end of the quarter.
This, together with its designation as an “essential” retailer and sales momentum through the quarter, underpinned the group’s decision, across its retail operations and specialist referral centres, not to participate in the Government’s Job Retention Scheme (JRS) or the Job Retention Bonus, the combined impact of which is estimated to be in excess of £8m.
Due to lockdown, the group said it has seen tangible signs of heightened demand for pet ownership, which it said is a good proxy for longer term growth in the market, as people adopt new attitudes to work and leisure pursuits.
The group said it has adapted its operations to be well-placed to grow revenues while adhering to guidelines around social distancing and safe purchase of goods and services, and has successfully trialled a number of initiatives, including a ‘Call and Deliver-to-Car’ service in retail as well as contactless click and collect from stores, using dedicated parking bays and QR code notifications, as well as increased use of telemedicine among First Opinion practices, providing opportunities to triage existing clients and acquire new ones, as well as home delivery of certain First Opinion healthplan medication.
Plans to launch an upgraded click and collect service are also at an advanced stage and will include using a new order management system to provide real-time intelligence on optimal order management and routing across its nationwide store estate.
Chief executive, Peter Pritchard, said: “The effects of COVID-19 continue to have an unprecedented impact on all of our lives.
“To express our gratitude to frontline colleagues, since the start of the pandemic, we paid a one-off bonus of £1.9m, in addition to our normal annual bonus, and created a £1m Colleague Hardship Fund for colleagues, our vet Partners and their teams should their families experience financial difficulties.
“We also allocated £1.1m to specific charities, many of which have seen their fundraising diminish during the pandemic, £100,000 to the Retail Trust, in support of workers across the wider retail sector, and have extended our 10% discount scheme to NHS workers until September.
“In spite of the rapid, wide-ranging and devastating effects of the pandemic, we have remained open for our customers throughout the period and we are emerging as a stronger business.
“The inherent resilience in our pet care model and the underlying pet care market, as well as encouraging signs of increased pet ownership, all underpin our confidence in seizing the future and progressing specific, strategic priorities.
“The significant investment in our omni-channel business is a good example of this, representing an important milestone, not just for our business and customers, but also as part of our commitment to longer term regional job creation and retention.
“While much has changed, and continues to do so, we remain confident in the long-term sustainability of our pet care business, where the love of pets and the role that they play in our lives is only increasing.”