Pets at Home experienced a modest revenue increase despite market challenges.
- The company’s Vet Group showed significant growth, boasting an 18.6% rise in revenue.
- Retail revenue experienced slight growth, maintaining consistent sales figures.
- Profit before tax increased significantly, but future projections have been lowered.
- The company remains confident in long-term market growth due to strategic investments.
Pets at Home reported a total group revenue rise of 1.9% to £789.1 million in the first half of FY25, despite operating under ‘subdued’ market conditions. This modest increase was largely attributed to the strong performance of the Vet Group. The Vet Group outperformed with an impressive revenue growth of 18.6%, driven by higher subscriptions, increased average transaction values, and more frequent customer visits. This contrasts with the retail division, which saw a mere 0.1% increase in revenue, with like-for-like sales remaining flat.
Underlying profit before tax showed a significant rise of 14.1% to £54.5 million, while statutory profit before tax soared by 47.3% to £51.1 million. The CEO, Lyssa McGowan, noted the company’s exceptional performance amid challenging market conditions. She highlighted the differentiated joint venture model in the Vet Group as a key driver of success, alongside strong customer satisfaction and effective cost controls in the retail sector.
However, new governmental budget changes concerning minimum wage and National Insurance are projected to cost the company £18 million in the next financial year. Pets at Home plans to mitigate these costs through productivity programmes and investments in automation.
During the period, Pets Club membership increased by 3%, reaching a total of 8.1 million members. Additionally, the Vet Group maintained steady growth with 18,000 new pet registrations weekly. Moving forward, the company anticipates enduring market challenges into the second half of FY25, leading to a revised, conservative profit growth forecast.
Despite these challenges, CEO McGowan expressed optimism for future market growth supported by strategic investments in a new digital platform, an expanded store network, and enhanced logistical capabilities at the Stafford distribution centre.
The company is poised for future growth through strategic investments despite current subdued market conditions.
