City round-up: Pets at Home; Esken; Nanoco
Handforth-based Pets at Home has announced that chief executive Peter Pritchard will step down after 11 years in the business next summer.
He has agreed with the board to leave his role, and that of director, following a successful turnaround, in which he developed and implemented the group’s pet care strategy, in support of its ambition to become the Best Petcare Business in the World.
Peter will remain fully engaged in his role as chief executive until late May 2022, to oversee the presentation of the group’s 2022 preliminary results to investors and to ensure a smooth transition period to his successor. The search for his suitable successor has commenced across internal and external candidates.
The Cheshire group said it is thriving under Peter’s leadership. In the four years since his appointment as CEO, its share of the pet care market has grown significantly and its market capitalisation has increased almost fourfold, with the exceptional progress being made recognised externally through numerous awards including Transformation of the Year (PLC Awards 2020) and Best Place to Work and Best Retailer (Retail Week Awards 2021).
His strategy to leverage the group’s capabilities, bringing together joint venture veterinary services, grooming, product, multi-channel, and subscriptions has transformed the business into the UK’s market leading omnichannel pet care provider focused on serving the needs of the pet owner.
Underpinning this turnaround and Pets at Home’s future growth has been strong investment in capacity and capability, creating a best-in-class data capability around an award-winning VIP loyalty club of more than 6.5m active members and, more recently, the £20m investment into building a unique, proprietary digital interface that seamlessly connects the group’s ecosystem of products and services for customers across all channels.
The opening of a purpose built, highly automated warehouse in Stafford in 2023 will enable a significant further increase in capacity and productivity to serve the UK’s growing pet population, and the development of the new pet care centre format is the cornerstone of the group’s revitalised physical estate.
The board said Peter’s tenure has embodied a firm commitment to responsible leadership across the group and a clear focus on values and purpose. Since the onset of the COVID-19 pandemic, Pets at Home has created a £1m colleague hardship fund, raised more than £6m for pet charities, implemented discounts for NHS workers and returned £28m of business rates relief, all of which without government support. Last year, Pets at Home also launched a new social value strategy and has made good progress against clearly defined targets across the three pillars of Planet, People and Pets.
Chairman, Ian Burke, said: “On behalf of the board and colleagues across the group, I would like to thank Peter for his significant contribution to Pets at Home since becoming CEO in 2018. His tireless work and dedication as leader of this great business has given it a very firm foundation for growth long into the future, for which we are all very grateful. We will all be very sorry to see Peter go, and he will leave us next summer with all our best wishes.”
Peter Pritchard said: “I have loved my time at Pets at Home. It is a privilege to lead such a talented and passionate group of colleagues on this journey and I am incredibly proud of the results we have collectively achieved. We are the market leading pet care business which, supported by a highly capable executive management team, has really good momentum and is primed to continue growing its share of market for many years to come.
“Having completed everything that I set out to achieve in 2018, next summer is the right time to take well earned rest and to hand over the reins to a new leader who will continue this journey in becoming the Best Petcare Business in the World. I would like to thank the board for their support, and I look forward to maintaining the strong momentum in the business through the next few months and working with them to find and appoint a suitable successor.”
In a trading update ahead of announcing its interim results on November 23, the group said the UK pet market remains robust, and the strong performance witnessed across both parts of the business during the second half of last year has continued throughout the past six months.
Based on trading year to date, the board now anticipates that group underlying pre-tax profit for the 53 weeks to March 31, 2022, will be at the top end of the current range of analyst expectations, ahead of previous guidance.
As at November 2, 2021, the company-compiled consensus estimate of analyst expectations for the 53-weeks full-year post IFRS-16 underlying pre-tax profit was £131m, with a range of £128m to £135m.
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David Shearer
Esken, the Carlisle-based aviation and energy infrastructure group which used to be known as Stobart, has reported higher interim sales and a decline in losses.
Revenues for the six months to August 31, rose by 7.7% to £51.7m, while pre-tax losses were £12.5m, down from £16.1m at the same point last year.
The group said it achieved positive EBITDA from its two core operating divisions, increasing from £1.5m in the six months ended August 31, 2020 to £9.9m, driven by a strong performance at Stobart Energy and management of costs and £3.5m of one-off receipts within the aviation businesses.
Esken completed a refinancing that included strategic funding in relation to its London Southend Airport (LSA) asset, together with a new working capital facility and equity raise. This enabled Esken to repay all outstanding bank debt and will allow the business to meet its ongoing working capital requirements, while underpinning the business plan going forward.
The management of costs associated with Stobart Air, following its liquidation in June 2021, and Propius, and work to dispose of the £39m portfolio of non-core assets remain in line with management expectations.
Esken has £90.5m of liquidity available at the half year, ahead of management expectations set out at the time of the refinancing, including £19.7m of ring-fenced cash in LSA, and a £20m undrawn revolving credit facility, supported by a continued focus on tight cost control.
Executive chairman, David Shearer, said: “We are pleased to report an improved financial performance and are executing our focused strategy to deliver long term growth. Following the successful completion of the capital raise and refinancing the group has £90.5m of liquidity available to it at the half year – ahead of management expectations.
“As previously indicated, Stobart Energy has had a strong start to the year with profitability and cash generation improving significantly and returning to pre COVID-19 levels. Improving gate fees and increased wood supply from the construction sector gives us confidence we should reach £18-20m of EBITDA in FY22 after group recharges.”
He added: “Continued global logistics income, coupled with the long term strategic partnership with Carlyle, provides LSA with optionality to focus on securing the right commercial airline agreements for Esken’s shareholders. LSA continues to progress positive discussions with airline partners and is confident in its offering including its cost efficient operating base, proven routes, award winning passenger experience and proximity to London.”
In a blow to the group in August this year, budget carrier Ryanair announced it would close its operations at LSA from the start of this year’s winter season.
Esken also announces today an updated management structure which follows the resignation of Warwick Brady as chief executive in February 2021. The board has carefully considered the leadership requirements of the business given the simplified structure of the group with two core operating divisions and has consulted with a number of its major shareholders.
It has been decided to retain the existing structure with some amendment to responsibilities. David Shearer will remain as executive chairman with responsibility for stakeholder management, execution of strategy and executive leadership. Lewis Girdwood, CFO, will take on the additional role as executive director-aviation with main board responsibility for that division. Nick Dilworth, COO, will take on the additional role of executive director-energy with main board responsibility for that business, in addition to his executive responsibility for ESG.
The changes have the support of major shareholders and the board believes it is in the best interests of investors. In order to maintain strong corporate governance, David Blackwood will become deputy chairman and senior independent director so that the board and shareholders have a point of reference independent from the chairman. These changes take effect immediately.
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Brian Tenner
Nanoco Group, a University of Manchester spin-out developing materials used in the manufacture of monitors and TV screens, suffered a decline in annual turnover, but managed to narrow its pre-tax losses, it announced today.
Sales of £2.091m in the 12 months to July 31, compared with £3.856m the previous year. The pre-tax loss fell from £5.972m to a loss of £5.080m.
Nanoco said the fall in sales was due to the completion of the contract with its US customer in the prior year.
The business said it delivered all technical milestones for its important European electronics customer. It signed a major new Asian chemicals customer for novel materials in sensing applications, completed restructuring of the business around core competencies of R&D, scale up and production, continued good progress in its legal action against Samsung for wilful infringement of its IP, completed debt issuance of £3.0m in July 2021 to protect the cash runway and value in organic business and the Samsung lawsuit, and moved from a ‘single customer, single product’ position to one in which the group now has multiple customers and eight distinct materials.
Nanoco held cash of £3.8m at year end, with gross monthly cash costs of around £0.4m, following substantial and continuing reduction of the cost base.
Chief executive, Brian Tenner, said: “This has been a year of steady progress for Nanoco.
“We met all existing customer milestones and added new strategic customers, whilst significantly expanding our range of nanomaterials for sensing applications and their addressable wavelengths.
“Our extensive efforts on the litigation against Samsung for the alleged wilful infringement of our IP have continued. The outcome of the claim construction hearing (or ‘Markman’) was very positive for Nanoco: We won the argument on four of the five patents in the case and the fifth had each side win one construction each.
“We retain our core competencies and capabilities in R&D, scale up and production and have a small and focused team dedicated to bringing our nanomaterials to market.”
He added: “The opportunities to create significant shareholder value in our organic activities and the Samsung litigation in the short to medium term, are clear and compelling. The board, therefore, remains confident in the strength of the investment proposition and value inherent in the business.”
