Pets at Home posts record revenue results

Lyssa McGowan

Market leading pet retail group Pets at Home is taking in £10m a week and has reported underlying pre-tax profits of £136.4million.

Already dominant in the UK market, with a 24% market share, chief executive Lyssa McGowan said the business now aims to increase invest £400m to drive further growth including opening new pet care centres, refitting existing stores, growing the vet business and building our digital capabilities.

A strong cash position for the Cheshire-headquartered retailer has prompted the business to start buying back £50m of shares on top of following £50m over the last year.

Looking ahead McGowan said current trading remains strong and the business expects sales to grow by 7%.

The financial results also revealed control of costs, including property savings due to negotiations with landlords at lease events achieving an average reduction of 20%. 

Lyssa McGowan, Chief Executive Officer said: “Through our unique blend of products, services and expert advice we were able to serve pet owners better, grow our consumer base, and win more market share, building on our leading position in the UK pet care market. 

“Today I am also delighted to announce our updated strategic ambition to build the world’s best pet care platform. I am incredibly excited about the opportunity ahead, building on the tremendous success the business has enjoyed in recent years, and capitalising on our unique growth opportunity.”

Russ Mould at AJ Bell commented on the results saying any fears that cost of living would impact the performance have been cast out: “Pet retailers are in a tricky situation. There is growing demand for such products and services as more people bring animals into their lives, yet cost-of-living pressures raise the risk that customers only buy what they really need and at the lowest price point possible.

“In the US, Petco has just confirmed the worst by saying its customers were focused on essentials rather than nice-to-haves. Understandably its share price sank on the news.

“That made investors nervous about what Pets at Home would report – but judging by its latest set of results, they needn’t have worried.

“The company continues to do incredibly well, with revenue and underlying profit up, a decent hike in the dividend, plans for a new share buyback, increased market share and more people becoming active VIP scheme members.

“Customers spend £160 on average a year with Pets at Home, but the most engaged spend £900 which implies it has significant scope to upsell products and services through greater interaction.

“A medium-term growth plan looks sensible and shows how Pets at Home is not simply about shifting a few tins of dog food or selling a family a fish tank. By offering the complete pet care package, from booking vet appointments to ordering prescriptions and arranging for animal grooming sessions, Pets at Home hopes to become the go-to place for any animal lover.

“A lot of its future success will be down to clever marketing, convincing people they need the full package and that Pets at Home is the right place to serve them. That explains why it is putting so much focus on data analysis, so it can better understand who actually shops with the business.”

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