No bone to pick here? Pets at Home sales boosted by vet services as it rolls out further expansion

Rebecca Smith
Results that will give you paws for thought?
Results that will give you paws for thought? (Source: Getty)

Pets at Home has said it's in pretty good health in its full-year results, after reporting a 1.5 per cent rise in like-for-like sales growth, driven by its expanding vet services business.

It said profits were in line with expectations, and shares rebounded from an early dip to be up 2.24 per cent to 164.20p at the time of writing.

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The figures

Like-for-like revenue growth rose 1.5 per cent, with group revenue up 7.2 per cent to £834.2m, in line with analysts' expectations.

Services was a bright spot, sporting like-for-like growth of 7.9 per cent.

Profit before tax and exceptional items relating to acquisitions and disposals edged up 1.1 per cent to £96.4m.

Income from its joint venture vet practices was a boost for the firm, rising 24.6 per cent to £47.1m.

Expansion plans also remain on track, as Pets at Home opened 15 superstores, 50 vet practices and 50 grooming salons.

It has announced a total dividend of 7.5p per share.

Why it's interesting

In January's update, the firm's shares took a hit when it announced "softer than anticipated" merchandise sales - today there was some good news on that front, with merchandise returning to growth in the fourth quarter.

As sales in stores have been a headache for the firm, it has been dishing up price reductions "across a number of everyday pet essentials" and said it was also starting to "reposition prices" in branded foods to tackle this.

Pets at Home said it was operating in a "resilient market", forecast to grow around 4.5 per cent over the next five years. Already proving a draw for the business, Pets at Home thinks its joint venture vet practices also have the potential to generate "more than £80m" when fully mature.

For next year, the FTSE 250 firm has eyes on rolling out another 10 superstores, 40-50 vet practices and 40-50 grooming salons. So, the nation's love of primping their pooches is still going strong, you'll be relieved to know. Pets at Home also reported "strong sales of dog accessories", so owners are clearly keen to keep man's best friend looking its best.

What the company said

Ian Kellett, group chief executive, said: "We have delivered a solid performance over the year with profits in line with expectations, reflecting in part the strength of our joint venture vet practices where our total income grew 24.6 per cent.

"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 one per cent 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.

Read more: Pets at Home has had a furrtastic half-year

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