Pets at Home reports a rise in group revenue despite challenging market conditions.
- The Vet Group shows substantial revenue growth, driven by more subscriptions and customer visits.
- Retail division experiences minimal revenue increase, with sales remaining flat compared to the previous period.
- Increased costs due to government budget changes include minimum wage and National Insurance impacts.
- Future profit growth expectations are adjusted downward due to ongoing market challenges.
Pets at Home has experienced a 1.9% increase in total group revenue, reaching £789.1 million in its first-half results for FY25. This performance comes despite operating within a retail market described as “subdued.” The company noted a 1.6% rise on a like-for-like basis, reflecting its resilience amid challenging conditions.
A significant highlight was the performance of the Vet Group, which achieved 18.6% revenue growth over 28 weeks ending October 10. This growth was primarily attributed to increased subscriptions, higher average transaction values, and more frequent customer visits, positioning the Vet Group as a standout performer for Pets at Home.
Conversely, the retail division reported only a slight 0.1% increase in revenue, with like-for-like sales remaining flat. This modest performance indicates that while there is stability, substantial growth remains limited within the retail segment of the business.
Operating profit, however, increased substantially. The company delivered a 14.1% rise in underlying profit before tax, amounting to £54.5 million, and a 47.3% increase to £51.1 million on a statutory basis, indicating strong financial management and efficiencies in operations.
The CEO, Lyssa McGowan, expressed that the first half of FY25 was marked by subdued market conditions. She highlighted that the Vet Group’s distinctive joint venture model has been effective in outperforming competitors. Similarly, she noted the retail division’s strong customer satisfaction, competitive pricing, and controlled cost base as strengths.
However, Pets at Home addressed potential cost increases amounting to £18 million in the next financial year due to changes in the minimum wage and National Insurance as per the new government budget. The company plans to manage these rising costs through ongoing productivity initiatives and investments in automation.
During this period, membership in the Pets Club increased by 3%, reaching a total of 8.1 million members. The relaunch of the Club on a new digital platform contributed to this growth. Additionally, the Vet Group maintained robust new pet registrations, averaging 18,000 per week.
Looking ahead, the company anticipates continuing subdued market conditions into the second half of FY25 and has adjusted its profit growth expectations accordingly. While current rates of market growth are expected to persist, Pets at Home remains optimistic about future improvements in market conditions, supported by enduring structural growth trends.
Confidence remains in their strategic investments, such as the new digital platform and expanding store network, alongside a well-performing distribution centre in Stafford, which are seen as key components for enduring growth and shareholder value.
Pets at Home continues to navigate a challenging market with strategic initiatives and investments, balancing current fiscal pressures with future growth prospects.
