Pets at Home Group PLC (LON:PETS)’s full year revenue rose 15.8% on a like-for-like basis to £1.3bn. That reflects market share gains across all business areas and record numbers of new customers. Underlying pre-tax profit of £144.7m, before certain accounting changes, was ahead of expectations and 65.3% up year-on-year.
Industry wide inflation is being managed ‘proactively’, and the group expects full year underlying pre-tax profit of £146m-£157m.
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A final dividend of 7.5p was announced, up 36% on last year, taking the total annual dividend to 11.8p. The group also intends to launch a 12-month share buyback programme of up to £50m.
The shares rose 6.0% following the announcement.
Pets At Home's Earnings
Matt Britzman, Equity Analyst at Hargreaves Lansdown
“Record new VIP customers mean cash is flowing through Pets at Home and markets have reacted with a 6% pop in the share price. The strong performance and balance sheet with net cash mean investors are being rewarded with a £50m buyback as pet ownership shows little sign of slowing down.
The UK pet market’s grown 4% per year on a compound basis over the past 5 years and continues to look strong as the pandemic fuelled surge in pet ownership doesn’t look to be going anywhere. Revenue’s outpaced that, growing around 10% over the same period which is testament to the work done at Pets at Home to push the omnichannel experience and sign customers up to the pet care ecosystem with subscription services now generating over £120m in recurring revenue.
Inflationary pressures are lingering in the background, but Pets at Home looks relatively resilient in face of those challenges with a large portion of goods sourced locally and costs initiatives in place easing the pressures. Lyssa McGowan steps into the CEO hotseat at the end of May as Peter Pritchard steps aside after an 11-year stint, and it looks to be a good time to take the reins.”
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