Pets at Home has shown resilience with revenue growth despite a challenging retail climate.
- The company’s Vet Group sector excelled with significant revenue increases driven by strategic actions.
- In contrast, the retail division experienced minimal growth, highlighting market difficulties.
- The firm faces financial challenges from new government wage policies, impacting future cost management.
- Looking forward, the company remains optimistic about long-term market growth potential.
Pets at Home reported a 1.9% increase in total group revenue, reaching £789.1 million in the first half of FY25. This was achieved despite operating in what was termed a ‘subdued’ retail environment.
The Vet Group outperformed expectations with an impressive 18.6% revenue growth over a 28-week period ending October 10, 2024. This success was attributed to increased subscriptions, higher average transaction values, and more frequent customer visits.
Meanwhile, the retail division saw a modest revenue increase of 0.1%, with like-for-like sales remaining stable. This underscores the challenges faced in the broader retail market.
Pets at Home reported a 14.1% rise in underlying profit before tax, amounting to £54.5 million, and an even larger increase of 47.3% on a statutory basis to £51.1 million.
Chief Executive Lyssa McGowan noted that the company managed to outperform in a challenging market, particularly through its pioneering joint venture model in the Vet Group and a strong cost control strategy in Retail.
However, the company is bracing for an £18 million impact in the next financial year due to recent changes in minimum wage and National Insurance contributions announced by the government.
To mitigate these expenses, Pets at Home plans to enhance productivity and invest in automation, aiming to manage future costs effectively.
The company also reported a 3% rise in membership of its Pets Club, reaching a total of 8.1 million, bolstered by a new digital platform.
Onward, the company has adjusted its profit expectations, anticipating modest growth for FY25, yet maintains confidence in future market improvements.
McGowan expressed optimism in long-term market growth, backed by enduring structural trends and strategic investments, including an expanding digital platform and a robust store network.
Pets at Home remains strategically focused, anticipating better market conditions while adapting to immediate challenges.
