TIDMPETS
RNS Number : 5963A
Pets At Home Group Plc
25 May 2023
FOR IMMEDIATE RELEASE, 25 MAY 2023
Pets at Home Group Plc: FY23 Preliminary Results
for the 52-week period to 30 March 2023
Record sales, underlying PBT and FCF underpin updated
medium-term vision
Financial highlights - 2023 a record year
-- Total Group revenue growth of 6.6% to GBP1,404.2m, with Group like-for-like#
(LFL) revenue up 7.9%, with quarterly LFL# accelerating sequentially
throughout the year.
-- Vet Group revenue increased by 13.3%, with LFL(#) revenue up 13.4%.
Across our general practices we are now consistently delivering in excess
of GBP10m consumer revenue(#) per week.
-- Retail revenue growth of 5.9%, and LFL(#) growth of 7.5%. All channels
contributed to growth, and we delivered further progress in our relative
price competitiveness.
-- Our statutory PBT was GBP122.5m, down 17.7% reflecting the gain
on the sale of our Specialist Group in FY22 and the costs of bringing
our new DC onstream in FY23, which are treated as non-underlying.
-- Underlying PBT(#) of GBP136.4m is up 4.8% (+8.0% on a 52-week basis),
ahead of previous guidance, with strong trading performance partly
offset by higher energy costs and increased investment in digital
assets as we build out our platform.
-- Free cash flow(#) up 3.5% to GBP98.2m reflecting YoY profit growth
and our planned increased investment into our key strategic growth
areas. Cash and cash equivalents at end of year was GBP178.0m.
-- Balance sheet remains robust with net cash(#) (before lease liabilities
of GBP421.4m) of GBP54.7m, giving us the confidence to announce
a GBP50m buyback for the year ahead, following GBP50m completed
in FY23, in line with our capital allocation policy.
-- Final dividend per share of 8.3p, +10.7% YoY. Full year dividend
per share of 12.8p, +8.5% YoY.
Business highlights
-- We attained a market share of 24%, taking 5-year gains to c600bps, as we
continue to grow our share of the growing UK petcare market.
-- Consume r revenue(#) up 6.5% to GBP1,782m (+8.5% on a 52-week basis), supported
by both volume and value growth, ending the year with our strongest quarter
and momentum continuing into the new year.
-- We grew our active VIP base to 7.7m, as our pet care offer continued to
resonate strongly with our loyal consumer base as well as attracting record
new consumers, averaging over 24,000 Puppy & Kitten sign-ups and 8,500
new vet clients a week.
-- Sustainability remains at the heart of our strategy and in the past year
we r aised GBP8.2m for pet charities and invested in a cultivated meat
business, in line with our long-term sustainable food strategy.
-- We attained a market share of 24%, taking 5-year gains to c600bps, as we
continue to grow our share of the growing UK petcare market.
Lyssa McGowan, Chief Executive Officer:
Our record performance over the past year demonstrates that our
compelling pet care offer continues to resonate strongly with
consumers. Through our unique blend of products, services and
expert advice we were able to serve pet owners better, grow our
consumer base, and win more market share, building on our leading
position in the UK pet care market. I would like to thank all of
our incredible colleagues for their continued passion and
dedication to our great business. It is our unique culture that
sets us apart and will continue to underpin everything we do.
We are committed to creating a better world for pets and the
people that love them. I am incredibly proud that, through our
foundation, we have raised over GBP50m to date for pets in need,
making us the largest grant-maker to pet charities in the UK. This
year in partnership with pet charity Blue Cross we also rolled out
foodbank donation points in over 200 of our pet care centres,
donating over 1m meals to help support pets and their owners during
the cost-of-living crisis.
Today I am also delighted to announce our updated strategic
ambition to build the world's best pet care platform. I am
incredibly excited about the opportunity ahead, building on the
tremendous success the business has enjoyed in recent years, and
capitalising on our unique growth opportunity.
Our medium-term vision - One unified pet care platform to unlock
our potential.
Our medium-term vision and strategy is to build the world's best
pet care platform. This will generate sustainable value for all
stakeholders, as we create a better world for pets and the people
that love them. We are the largest, and by far the most trusted,
pet care business in the UK(1) . We already have a leading 24%
share of the GBP7.2bn UK pet care market, an industry supported by
structural growth, underpinning resilience and predictability in
our revenues. We are the only player that combines products,
services and expertise across the full pet care market, with scale
and credibility in every area. Our strategy will unlock a unique
opportunity we have to bring together everything that pet owners
need in one place.
Building the world's best pet care platform
Integrated - a unified blend of products, services and
advice.
-- Our pet care platform will truly integrate all our products and services.
Once built, our platform will be leveraged across all our verticals; all
accessed via a unified pet care app enabling consumers to fulfil all their
pet care needs, from booking surgical appointments and ordering repeat
prescription deliveries to managing nutrition subscriptions and buying
a special birthday treat. In the future, we will leverage our platform
to unlock new adjacencies.
-- The recent launch of our new Pets brand brings together our products
and services under one master brand and represents our new consumer positioning
as a provider of all your pet care needs - however, whenever and wherever
you want. This unified positioning will significantly enhance marketing
efficiency and effectiveness across our services.
-- We are the only business which has successfully brought together clinical
and retail services at scale, operating the UK's most productive veterinary
business with consumer revenues of cGBP500m across 444 practices, enabled
by our unique joint venture partnership model.
-- We will continue to leverage our category authority and expertise to
lead on innovation, making it easier for pet owners to access the best
products and services for their pets. Our new long-term agreement with
Cranswick will support further innovation and growth across own brand
- a key area of competitive advantage. We will increase presence in fast
growing areas, e.g. fresh and frozen.
Omnichannel - seamlessly connected for the consumer.
-- Our network of 457 pet care centres gives us scale and reach advantages,
bringing us closer to pet owners and able to offer more flexibility and
convenience than competitors, all under one roof. We will continue to
invest behind the opportunity for new pet care centres in attractive catchments,
particularly urban, with clinical services, tailored ranges and innovation
across food and accessories.
-- As our joint venture vet practices reach maturity it unlocks growth opportunities
in advanced practices and 24hr hospitals, significantly extending the
physical footprint and range of clinical services offered by our network
of veterinary practices, so supporting growth and profitability.
-- We are bringing together our physical and digital capabilities, creating
hybrid experiences such as virtual consultations. Our investments in technology
will make it easier for us to interact with consumers however they chose,
whilst matching the right colleague expertise to the right consumer need,
driving better productivity alongside better outcomes for pets and pet
owners.
-- Our new DC is onstream, underpinning capacity needs beyond the next decade
and will materially reduce our cost to serve. Deliveries to our store
network are underway and we will look to move to 1 DC from 3 by Spring
2024, improving fulfilment costs, consumer experience and efficiency.
Consumer centric - an unrivalled experience.
-- Our deep and unique insights into pet owners' needs increasingly drives
our actions. Our data capability is increasingly integrated through our
operation driving targeted, effective offers, improving operational efficiency,
and growing predictable, sticky revenue streams through our CRM.
-- Growing share of wallet is our greatest opportunity , unlocked by creating
easy, seamless, and enjoyable experiences. Creating unique, compelling,
and brilliantly simple journeys and experiences to drive revenue, share
of wallet and lifetime value. Our average consumer spends GBP160 a year
with us, but our most engaged spend over GBP900, highlighting our significant
growth headroom.
-- We already have 1.6m subscriptions with significant headroom to grow.
Our digital and data platform, integrated with face-to-face expertise,
will allow us to offer an enhanced range of brilliantly simple, highly
compelling, and great value subscriptions to lead the market and drive
lifetime value.
1. Source: 1000 pet owners, YouGov, April 2023
Our values underpin everything - maintaining commitment to a
sustainable future.
We will be unwavering in delivering the best outcomes for all
our stakeholders.
Pets - to improve the life of every pet in the UK by being the
leading advocate for pet welfare.
-- We will continue to adopt the highest welfare standards for pets under
our care, use our voice externally to extend this to all pets, and support
pets in need though our Foundation.
-- We help pet owners take the best care of their pet through our nutritional
advice, high-quality fulfilling products, and highest quality clinical
care.
People - to be the best employer and developer of talent by
creating rewarding, sustainable careers in pet care open to
everyone.
-- Investing in clinical and non-clinical expertise, with clear focus on
wellbeing, diversity, and inclusion.
-- Earn As You Learn is a core part of our strategy as we provide colleagues
the ability to earn above Real Living Wage while enhancing service and
expertise for pet owners.
Planet - to make pet care environmentally sustainable by leading
in sustainable pet food.
-- We will continue to reduce the carbon intensity of our own operation,
having successfully grown our business while reducing our operational
carbon by 42% since 2016.
-- By leading in sustainable pet food, evidenced by our investment in the
Good Dog Food company, we can move the industry to a future with lower
carbon emissions, and improve biodiversity.
Our financial framework - delivering sustainable value for
shareholders.
Ambition to grow sales 7% per annum over the medium term
supported by:
-- We expect the GBP7.2bn UK pet care market to grow c4% as the pet care market
is supported by 3 structural growth trends of: humanisation; premiumisation;
and penetration.
-- Our unique pet care platform help drive outperformance of c300bps versus
the market supported by:
-- Our clear competitive scale and reach advantages, our unique data capabilities,
and our category authority and innovation.
-- Reducing friction will grow share of wallet by driving frequency and
enabling cross-sell/upsell.
-- Investment behind our physical assets with a medium-term opportunity
for 40 new stores, ongoing store refresh program, and leveraging our
data to tailor ranges locally.
-- Our Vet Group will grow through maturity, extensions (20+ in FY24),
advanced capabilities, and new sites (5-15 pa), growing consumer revenues
at 9% CAGR over the medium-term.
Target 10% PBT growth CAGR over the medium term through:
-- Operating leverage as we deliver growth through the investments we have
made in our platform and capabilities, while the costs of these investments
tapers going forward.
-- Ongoing initiatives to target efficiencies and drive further productivity
gains across the business.
-- Improving mix as our vet revenues grow faster than the group average driving
up margins and improving FCF (already around 50% of Group FCF).
Move FCF conversion towards 70% of PBT in the medium term:
-- Delivering growth in profits using investments we have already made in
the business such as our new distribution centre and the build phase of
digital investment.
-- Moving beyond the peak of our investment plan. Much of the capital to
deliver our growth ambitions has been invested and capex will taper towards
a normalised level around GBP50m.
-- Many of the future investments are low risk and proven e.g. vet extensions,
new stores, space swaps.
Maintain capital discipline and a clear capital allocation
policy to create long term shareholder value.
-- Our capital allocation priorities are unchanged:
1. Invest in the business. cGBP400m investment (capex and opex) over
medium term.
2. Pay a progressive ordinary dividend targeting 50% EPS payout.
3. Explore inorganic growth opportunities. Focus on strategic investments
and bolt-on M&A.
4. Return excess cash to shareholders subject to maintaining a prudent
balance sheet and not constraining the business.
Current trading and outlook
Current trading remains strong; sales in the first few weeks
continue in line with the FY23 exit rate with strong consumer
loyalty supporting continued volume growth across the business
alongside continued consumer acquisition. Our relative price
position remains compelling as we continue to make pet care as
affordable as possible, in line with our strategy of growing share
in growing market.
We continue to proactively manage industry-wide cost headwinds ,
in particular the impact of foreign exchange, energy, and National
Living Wage (+9.7%). In the year ahead we will seek to offset these
impacts where possible through direct mitigation, and will also
benefit from lower freight costs, self-help measures targeting GNFR
and lower rents and through driving productivity gains across our
pet care centres and supply chain, leveraging technology to lower
our overall cost to serve.
For FY24:
-- We expect sales to grow in line with our medium-term ambition of 7%.
-- We are comfortable with current analyst consensus for underlying PBT,
currently cGBP136m*.
-- We expect non-underlying costs of cGBP15m as we complete the transition
to our Stafford DC.
-- Effective tax rate is expected to be 26% driven by the increase in the
rate of UK corporation tax.
-- We plan for cash capex of GBP60m.
The business remains highly cash generative, and we expect to
finish the year in a net cash position, after significant
investment to drive organic growth, giving us the confidence to
announce a GBP50m buyback for the year ahead in line with our
capital allocation policy.
Our next scheduled update will be our Q1 FY24 release on 3
August 2023.
Key Performance Indicators
YoY(7)
Financial KPIs(1) FY23 FY22 YoY 52w vs 52w
----------------------------- -------- -------- --------- -------------
Consumer revenue#, 2 (GBPm) 1,782.4 1,673.8 6.5% 8.5%
----------------------------- -------- -------- --------- -------------
Underlying PBT#, 7 (GBPm) 136.4 130.1 4.8% 8.0%
----------------------------- -------- -------- --------- -------------
Free cash flow# (GBPm) 98.2 95.0 3.5% 3.5%
----------------------------- -------- -------- --------- -------------
Underlying CROIC #,3 22.7% 25.0% (231)bps (231)bps
----------------------------- -------- -------- --------- -------------
Strategic KPIs FY23 FY22 YoY
----------------------------- --- -------- -------- --------
Number of active VIPs(4)
(m) 7.7 7.3 5.4%
---------------------------------- -------- -------- --------
Consumer revenue(#, 2) from 578.7 537.7 7.6%
services(5) (GBPm) 32.5%
32.1% 34bps
----------------------------- --- -------- -------- --------
VIP c onsumer revenue(#,
2, 6) (GBPm) 1,195.6 1,090.0 9.7%
---------------------------------- -------- -------- --------
Consumer revenue(#, 2) per
FTE colleague (GBPk) 216.6 206.0 5.1%
---------------------------------- -------- -------- --------
1. Financial KPIs represent those used by the business to
monitor performance. Management recognise that as Alternative
Performance Measures they differ to statutory metrics, but believe
they represent the most appropriate KPIs. GAAP Measures are
presented on pages 10-76.
2. Consumer revenue includes consumer revenue made by Joint
Venture vet practices, and therefore differs to the fee income
recognised within Vet Group revenue.
3. Cash return on invested capital, represents cash returns
divided by the average of gross capital invested (GCI) for the last
twelve months. Cash returns represent underlying operating profit
before share based payments subject to tax, then adjusted for
depreciation of PPE, right-of -use assets and amortisation. GCI
represents gross PPE, right-of-use assets and software, and other
intangibles excluding the goodwill created on the acquisition of
the Group by KKR (GBP906,445,000) plus net working capital, before
the effect of non-underlying items in the period.
4. Number of VIP loyalty club members who transacted across the
group in the last 52 weeks prior to the end of the reporting
period.
5. Defined as consumer revenue made by JV vet practices, company
managed vet practices, grooming services, subscriptions, pet sales
and pet insurance commissions.
6. VIP consumer revenue is shown on a rolling 52-week basis.
7. FY23 is a 52-week period, FY22 was a 53-week period. YoY
metrics shown here represent FY23 vs a pro-rated 52-week FY22.
8. Restated.
* Current analyst consensus PBT GBP136m, range GBP127m to
GBP142m).
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulations (Regulation (EU)
No.596/2014). For the purposes of MAR and Article 2 of Commission
Implementing Regulation (EU) 2016/1055, this announcement is being
made on behalf of the Company by Andrew Porteous, Director of
Investor Relations.
Results presentation
A presentation for analysts and investors will be held today at
9:30am at Bank of America, 2 King Edward Street, London, EC1A 1HQ,
attendance is by invitation only. An audio webcast and statement of
these results will be available for playback after the event at
https://investors.petsathome.com .
Investor Relations Enquiries
Pets at Home Group Plc:
Andrew Porteous, Director of Investor
Relations +44 (0) 7740 361 849
Chris Ridgway, Head of Investor
Relations +44 (0) 7788 783 925
Media Enquiries +44 (0)20 7029 8000
Pets at Home Group Plc:
Natalie Cullington, Head of Communications +44 (0) 7974 594 701
Citigate Dewe Rogerson:
Lorna Cobbett +44 (0) 7771 344 781
Angharad Couch +44 (0) 7507 643 004
About Pets at Home
Pets at Home Group Plc is the UK's leading pet care business,
providing pets and their owners with the very best advice, products
and care. Pet products are available online or from our 457 pet
care centres, many of which also have vet practices and grooming
salons. The Group also operates a leading small animal veterinary
business, with 444 veterinary general practices located both in our
pet care centres and in standalone locations. For more information
visit: http://investors.petsathome.com/
Disclaimer
This trading statement does not constitute an invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any
Pets at Home Group Plc shares or other securities nor should it
form the basis of or be relied on in connection with any contract
or commitment whatsoever. It does not constitute a recommendation
regarding any securities. Past performance, including the price at
which the Company's securities have been bought or sold in the
past, is no guide to future performance and persons needing advice
should consult an independent financial adviser. Certain statements
in this trading statement constitute forward-looking statements.
Any statement in this document that is not a statement of
historical fact including, without limitation, those regarding the
Company's future plans and expectations, operations, financial
performance, financial condition and business is a forward-looking
statement. Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
These and other factors could adversely affect the outcome and
financial effects of the plans and events described in this
statement. As a result you are cautioned not to place reliance on
such forward-looking statements. Nothing in this statement should
be construed as a profit forecast.
Chief Financial Officer's Review
The FY23 period represents the 52 weeks from 1 April 2022 to 30
March 2023. The comparative period represents the 53 weeks from 26
March 2021 to 31 March 2022.
The Group's results are shown as three segments that represent
the size of the respective businesses and our internal reporting
structures; Retail (includes products purchased online and
in-store, pet sales, grooming services and insurance products), Vet
Group (includes general practices) and Central (includes Group
costs, finance expenses and the Group's veterinary telehealth
business).
FY23 FY22 YoY change
Group revenue (GBPm) 1,404.2 1,317.8 6.6%
---------------------------------------- -------- -------- -----------
Retail 1,278.7 1,206.9 5.9%
-----------
Vet Group 122.8 108.4 13.3%
-----------
Central 2.7 2.5 8.9%
--------------------------------------- -------- -------- -----------
Group like-for-like revenue growth(#) 7.9% 15.8%
Retail 7.5% 15.8%
-----------
Vet Group 13.4% 17.1%
-----------
Group gross margin 47.6% 49.2% (157)bps
-----------
Retail 47.0% 48.9% (184)bps
-----------
Vet Group(1) 53.4% 52.1% 130bps
===========
Group statutory PBT (GBPm) 122.5 148.7 (17.7)%
-----------
Group statutory PBT margin 8.7% 11.3% (256)bps
-----------
Group underlying PBT(1,2,3,#) (GBPm) 136.4 130.1 4.8%
Retail 98.8 101.4 (2.5)%
Vet Group 50.9 43.1 18.3%
--------------------------------------- -------- -------- -----------
Central (13.3) (14.4) 6.8%
--------------------------------------- -------- -------- -----------
Group underlying PBT margin(1,2,3,#) 9.7% 9.9% (16)bps
---------------------------------------- -------- -------- -----------
Retail 7.7% 8.4% (67)bps
--------------------------------------- -------- -------- -----------
Vet Group 41.5% 39.8% 168bps
--------------------------------------- -------- -------- -----------
Statutory basic EPS (p) 20.5 24.9 (17.8)%
-----------
Statutory diluted EPS (p) 20.2 24.5 (17.6)%
-----------
Underlying basic EPS(1,2,3,#) (p) 22.8 21.2 7.6%
-----------
Non-underlying items(1,2,3) (GBPm) (13.9) 18.6 NM
-----------
Free cash flow (#) (GBPm) 98.2 95.0 3.5%
Cash and cash equivalents (GBPm) 178.0 166.0 7.2%
Total indebtedness# (366.7) (317.0) (15.6)%
Net cash# 54.7 66.0 (17.1)%
Dividend (p) 12.8 11.8 8.5%
Number of
---------------------------------------- -------- -------- -----------
Pet care centres 457 457 -
-----------
Grooming salons 339 337 2
-----------
Joint Venture vet practices 387 388 (1)
---------------------------------------- -------- -------- -----------
Company managed vet practices 57 55 2
---------------------------------------- -------- -------- -----------
FY22 non-underlying credit of GBP0.1m relates to the release of
1. a provision held against property leases allocated against non-underlying
gross margin.
FY23 non-underlying items of GBP10.1m relate to transition costs
2. relating to our new distribution centre, GBP2.7m relating to restructuring
of certain support functions, and GBP0.1m relating to aborted project
costs. All allocated against non-underlying operating costs. FY22
non-underlying credit of GBP19.2m relating to the profit on disposal
of the Specialist Group, allocated as other income.
FY23 non-underlying cost of GBP1.0m relates to transition costs
3. relating to our new distribution centre, recognised within non-underlying
interest charge. FY22 non-underlying cost of GBP0.7m relating to
loan fees written off upon refinance of our revolving credit facility,
allocated against non-underlying interest charge.
Revenue
Group revenue in FY23 grew 6.6% to GBP1,404.2m (FY22:
GBP1,317.8m) and like-for-like (LFL) revenue grew 7.9%(#) .
LFL Revenue Growth FY23
-------------------- -----------------------------
Q1 Q2 Q3 Q4
-------------------- ----- ------ ------ ------
Retail 5.6% 6.3% 7.6% 11.0%
Vet Group 8.6% 13.1% 18.0% 15.5%
Group 6.0% 6.8% 8.3% 11.1%
-------------------- ----- ------ ------ ------
Retail revenue grew 5.9% to GBP1,278.7m (FY22: GBP1,206.9m),
with LFL revenue growth of 7.5%(#) . Within Retail, food grew at
11.4% supported by good availability and our strong price position.
Accessories declined by 0.9% overall, however our commodity-type
accessories performed well, offset by a softer performance in more
discretionary accessories. Retail services, which includes
grooming, pet sales and insurance commissions, were flat
year-on-year.
Vet Group revenue was up 13.3% to GBP122.8m (FY22: GBP108.4m)
and LFL revenue grew by 13.4%(#) .
Total Joint Venture fee income increased by 10.5% to GBP77.2m
(FY22: GBP69.9m) and revenues from company managed practices
increased by 20.4% to GBP37.5m (FY22: GBP31.2m).
Revenue of GBP2.7m (FY22: GBP2.5m) was recognised within our
Central division in relation to The Vet Connection, our telehealth
business.
Gross margin
Group gross margin1 decreased YoY in line with expectations by
157 bps to 47.6% (FY22: 49.2%).
Gross margin within Retail was 47.0%, a reduction of 184 bps
over the prior year (FY22: 48.9%), predominantly driven by food
growing faster than accessories (142bps impact on Group gross
margin).
Gross margin within the Vet Group increased by 130 bps to 53.4%
(FY22: 52.1%). This increase reflects the strong sales growth
across our Joint Venture estate driving strong fee income growth
with the cost base to support those practices remaining relatively
fixed.
Operating costs
Operating costs (2) of GBP543.7m (FY22: GBP515.1m) grew at 5.6%
including GBP12.9m of non-underlying costs incurred in the year,
predominantly due to the transition to our new distribution
centre.
On a 52-week basis, and excluding DC transition costs, operating
costs(2) grew 5.1%.
We continue to maintain a tight operational grip on
industry-wide cost headwinds, including raw materials, wages,
energy, and foreign exchange costs. As well as directly mitigating
these costs where possible, we are also proactively offsetting them
through our ongoing self-help initiatives. Our programme of rent
reductions is progressing well and, where we have actively sought
to reduce the rent at lease events, we have achieved an average
reduction of 20%. We continue to target efficiencies across
consumables and goods not for resale, and we are driving further
productivity gains across our stores and supply chain, using
technology to lower our overall cost to serve.
We have embraced the 9.7% increase in National Living Wage, and
we have now secured pricing on 80-90% of our FY24 energy
requirements. In addition, we have hedged over 90% of our foreign
exchange requirements for the next 12 months, in line with our
treasury policy, at an average rate of $1.21 (FY23: $1.34).
Finance expense
The net finance expense, including interest charged on lease
liabilities, decreased to GBP14.3m (FY22: GBP15.1m) predominantly
driven by a YoY increase in interest received on cash balances. Of
this, GBP12.4m (FY22: GBP11.4m) related to interest expense on
lease liabilities.
Profit before tax
Group statutory profit before tax was GBP122.5m (FY22:
GBP148.7m). In FY22 we benefitted from the second tranche of the
proceeds from the disposal of the Specialist Group (GBP19.2m
credit) while in FY23 PBT includes a total of GBP13.9m of
non-underlying costs (includes GBP12.9m of operating costs and
GBP1.0m of lease interest), predominantly due to the transition to
our new distribution centre.
Group underlying profit before tax was GBP136.4m(#) (FY22:
GBP130.1m), with a profit margin(3) of 9.7% (FY22: 9.9%), impacted
by increased energy costs (up GBP14.9m YoY) and the YoY increase in
investment in digital assets (up GBP5.9m YoY), which are expensed
through the P&L in line with IAS38 accounting policies.
Retail statutory profit before tax was GBP87.7m (FY22:
GBP101.4m). Retail underlying profit before tax was GBP98.8m (FY22:
GBP101.4m) with a profit margin(3) of 7.7% (FY22: 8.4%) reflecting
the sustained strong trading across the year, offset by the cost
headwinds described earlier.
Vet Group statutory profit before tax was GBP50.9m (FY22:
GBP43.2m) with a profit margin (3) of 41.5% (FY22: 39.8%), driven
by a strong sales performance, continued gross margin expansion,
and a tight grip on operating costs.
Taxation, profit after tax & EPS
Total tax expense was GBP21.8m for the year, an effective rate
of 18%.
Statutory profit after tax decreased by 19.2% to GBP100.7m
(FY22: GBP124.5m). Statutory basic earnings per share were 20.5
pence (FY22: 24.9 pence) and underlying basic earnings per share(#)
were 22.8 pence (FY22: 21.2 pence).
Working capital
The movement in working capital(4) for FY23 was an inflow of
GBP19.8m, predominantly driven by the strong growth in the
business.
Inventories increased by 29% to GBP108.6m reflecting the impacts
of cost inflation, a small increase for the opening of the new DC
and investment to support higher availability which is supporting
better growth.
Payables increased by 16% to GBP261.5m primarily driven by a 31%
increase in trade payables, in line with the increase in
inventories and driven by the growth of the business over the past
year.
Receivables were broadly stable, decreasing 3.5% to GBP51.8m.
Within receivables, the strong financial performance across our
Joint Venture vet practices contributed to the gross value of
operating loans reducing by GBP6.4m to GBP13.8m from GBP20.2m at
FY22 year end. The provision held against the gross value of
operating loans decreased by GBP1.6m to GBP3.4m from GBP5.0m at
FY22 year end.
Investment
Total investment was GBP105.2m (FY22: GBP73.1m), split GBP75.3m
capital investment (FY22: GBP49.1m), and GBP29.9m of cloud-based
digital investment which is expensed through the P&L (FY22:
GBP24.0m).
Total investment of GBP105.2m was focused on three strategic
growth areas; investment in data analytics and business systems
totalling GBP37.8m (FY22: GBP30.9m), as we continue to progress our
data and digital agenda, a GBP43.7m (FY22: GBP10.4m) investment as
we complete our new distribution centre, and GBP17.5m (FY22:
GBP17.2m) to continue with our store refurbishment programme.
Free cash flow
Free cash flow after interest and tax, but before acquisitions
and disposals was GBP98.2m(#) (FY22: GBP95.0m). The increase in
free cash flow compared with the prior year primarily reflects the
underlying profit growth and lower cash tax payment, offset by
increased investment in the business to drive future organic
growth.
Our free cash flow for the year includes the following
items:
-- GBP22.0m in lease-related incentives made up of GBP12.4m in landlords cash
contribution and GBP9.6m from our share of development profit on disposal.
-- GBP9.5m lower cash tax payment versus the standard rate of corporation
tax, due to a corporation tax receivable brought forward into FY23 which
is not expected to recur going forward.
-- GBP4.4m reduction in net operating loans.
During FY23 we incurred GBP13.9m of non-underlying costs mostly
related to the transition to the new Stafford DC.
Free cash flow(#) (GBPm) FY23 FY22
-------------------------------------------- ------- -------
Net cash flow from operating activities 251.2 248.1
-------------------------------------------- ------- -------
Lease payments(7) (68.9) (67.3)
-------------------------------------------- ------- -------
Cash receipts from lease incentives 22.0 -
-------------------------------------------- ------- -------
Debt issue costs (0.1) (3.3)
-------------------------------------------- ------- -------
Net cash capex(8) (77.2) (55.5)
-------------------------------------------- ------- -------
Net cash interest(9) (14.7) (14.7)
-------------------------------------------- ------- ---------
Purchase of own shares for colleague share
schemes (14.1) (12.3)
-------------------------------------------- ------- -------
Free cash flow(#) 98.2 95.0
-------------------------------------------- ------- -------
The cash and cash equivalents at the end of the year were
GBP178.0m, up GBP12.0m year-on-year (FY22: GBP166.0m).
Divisional free cash flow FCF (GBPm)
--------------------------- -----------
Retail 67.0
---------------------------- -----------
Vet Group 44.7
---------------------------- -----------
Central (13.5)
---------------------------- -----------
Group(#) 98.2
---------------------------- -----------
The cash generation described above, enables us to pay a record
dividend payment and fund our GBP50m share buyback programme which
completed in the year. Our net cash position(#) at the end of the
year was GBP54.7m (cash GBP178.0m, debt GBP123.3m), and net debt(#)
was GBP366.7m on a lease adjusted basis. This represents a leverage
ratio(#) of (0.3)x underlying EBITDA or 1.5x on a lease adjusted
basis.
Net cash (GBPm) FY23 FY22
---------------------------- ------- -------
Opening net cash(#) 66.0 1.4
---------------------------- ------- -------
Free cash flow (#) 98.2 95.0
---------------------------- ------- -------
Equity dividends paid (58.7) (48.5)
---------------------------- ------- -------
Share buyback (50.3) -
---------------------------- ------- -------
Acquisitions(5) (0.5) (1.7)
---------------------------- ------- -------
Disposals(6) - 19.8
---------------------------- ------- -------
Closing net cash(#) 54.7 66.0
---------------------------- ------- -------
Pre IFRS 16 leverage(#) (0.3)x (0.4)x
---------------------------- ------- -------
Lease adjusted leverage(#) 1.5x 1.3x
============================ ======= =======
1. Gross margin is calculated as gross profit as a percentage of revenue.
2. Operating costs are the sum of selling and distribution expenses
and administrative expenses.
3. Profit margin is calculated as underlying profit before tax as
a percentage of revenue.
4. Working capital is the sum of YoY movements in trade and other
receivables, inventories, trade and other payables, and provisions.
5. FY23 and FY22 includes investment in certain company managed practices.
6. FY22 includes the cash proceeds in relation to the disposal of
the Specialist Group net of fees and cash held upon disposal.
7. Lease payments are cash payments for the principal portion of the
right-of-use lease liability.
8. Net cash capex is proceeds from the sale of property, plant and
equipment less costs to acquire right-of-use assets and acquisition
of property, plant and equipment and other intangible assets.
9. Net cash interest is interest received less interest paid and interest
paid on lease obligations.
The Group's underlying cash return on invested capital
(CROIC)(#) in the period decreased to 22.7% (FY22: 25.0%) having
been through a year of peak investment as we build our digital
platform and bring our new DC onstream, with the cash benefits to
come in future year.
Capital allocation
Our capital allocation policy prioritises investing cash in
areas that will expand the Group and deliver attractive returns.
These areas include organic investment (into our digital
capability, our infrastructure, and our store refurbishment
program), our progressive ordinary dividend policy (which
approximates to 50% of earnings per share) and value-accretive
opportunities including M&A (which are strategically aligned to
expanding our platform in core and adjacent markets). We will
return to shareholders any surplus free cash flow after these
items, and it is the Board's intention to review this on an annual
basis. In the year we have completed a GBP50m share buyback
programme and have today announced a further GBP50m buyback for the
year ahead.
Dividend
The Board has recommended a final dividend of 8.3 pence per
share, an increase of 10.7% on the prior year. This takes the total
dividend for the year to 12.8 pence per share, an increase of 8.5%
on the prior year, reflecting our strong cash performance and
balance sheet. The final dividend will be payable on 11 July 2023
to shareholders on the register at the close of trading on 16 June
2023.
Mike Iddon
Chief Financial
Officer
25 May 2023
Financial statements
Section 435 statement
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity as at 30 March
2023
Consolidated statement of changes in equity as at 31 March
2022
Consolidated statement of cash flows
Company balance sheet
Company statement of changes in equity as at 30 March 2023
Company statement of changes in equity as at 31 March 2022
Company statement of cash flows
Notes (forming part of the financial statements
Glossary - Alternative Performance Measures
Advisors and contacts
Section 435 statement
The financial information set out below does not constitute the
company's statutory accounts for the periods ended 30 March 2023 or
31 March 2022 but is derived from those accounts. Statutory
accounts for 2022 have been delivered to the registrar of
companies, and those for 2023 will be delivered in due course. The
auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006
Consolidated income statement for the 52 week period ended 30
March 2023
52 week period ended 30 53 week period ended 31
March 2023 March 2022(reclassified)(1)
------- ---- ----------------------------------- ------------------------------------
Underlying Non-underlying Underlying Non-underlying
trading items (note Total trading items (note Total
Note GBPm 3) GBPm GBPm GBPm 3) GBPm GBPm
---------------------------- ---- ---------- -------------- ------- ---------- -------------- --------
Revenue 2 1,404.2 - 1,404.2 1,317.8 - 1,317.8
Cost of sales (737.9) - (737.9) (670.6) 0.1 (670.5)
Impairment gains
on receivables 3 2.0 - 2.0 0.7 - 0.7
---------------------------- ---- ---------- -------------- ------- ---------- -------------- --------
Gross profit 668.3 - 668.3 647.9 0.1 648.0
Selling and distribution
expenses (409.8) (10.1) (419.9) (393.9) - (393.9)
Administrative expenses 3 (121.0) (2.8) (123.8) (121.2) - (121.2)
Other income(1) 3 12.2 - 12.2 11.7 - 11.7
Profit on disposal
of subsidiary 3 - - - - 19.2 19.2
--------------------------- ----- ---------- -------------- ------- ---------- -------------- --------
Operating profit 2,3 149.7 (12.9) 136.8 144.5 19.3 163.8
Financial income 6 2.7 - 2.7 0.2 - 0.2
Financial expense 7 (16.0) (1.0) (17.0) (14.6) (0.7) (15.3)
--------------------------- ----- ---------- -------------- ------- ---------- -------------- --------
Net financing
expense (13.3) (1.0) (14.3) (14.4) (0.7) (15.1)
--------------------------- ----- ---------- -------------- ------- ---------- -------------- --------
Profit before
tax 136.4 (13.9) 122.5 130.1 18.6 148.7
Taxation 8 (24.4) 2.6 (21.8) (24.3) 0.1 (24.2)
--------------------------- ----- ---------- -------------- ------- ---------- -------------- --------
Profit for the
period 112.0 (11.3) 100.7 105.8 18.7 124.5
--------------------------- ----- ---------- -------------- ------- ---------- -------------- --------
(1) See note 1.1 for an explanation of the prior
year reclassification.
------- -------------------------------------------------------------- ---------- -------------- --------
Basic and diluted earnings per share attributable to equity
shareholders of the Company:
53 week
52 week period
period ended
ended 30 31 March
Note March 2023 2022
-------------------------------------- ---- ----------- ---------
Equity holders of the parent - basic 5 20.5p 24.9p
Equity holders of the parent- diluted 5 20.2p 24.5p
-------------------------------------- ---- ----------- ---------
Dividends paid and proposed are disclosed in note 9.
The notes on pages 19 to 76 form an integral part of these
financial statements.
Consolidated statement of comprehensive income for the 52 week
period ended 30 March 2023
52 week 53 week
period ended period ended
30 March 31 March
2023 2022
Note GBPm GBPm
----------------------------------------------- -------- --------------- -------------
Profit for the period 100.7 124.5
Other comprehensive income
Items that are or may be recycled subsequently
into profit or loss:
Foreign exchange translation differences 22 (0.1) (0.0)
Effective portion of changes in fair value
of cash flow hedges 22 (10.6) 7.9
Other comprehensive income for the period,
before income tax (10.7) 7.9
Income tax on other comprehensive income 15,22 1.3 (1.2)
----------------------------------------------- -------- --------------- -------------
Other comprehensive income for the period,
net of income tax (9.4) 6.7
----------------------------------------------- -------- --------------- -------------
Total comprehensive income for the period 91.3 131.2
----------------------------------------------- ------------------ ----- -------------
The notes on pages 19 to 76 form an integral part of these
financial statements.
Consolidated balance sheet at 30 March 2023
At 31 March
At 30 March 2022 (restated)(1)
Note 2023 GBPm GBPm
-------------------------------------------- ---- ----------- -------------------
Non-current assets
Property, plant and equipment 11 146.9 108.9
Right-of-use assets 12 359.6 340.1
Intangible assets 13 989.5 987.1
Deferred tax asset(1) 15 1.9 1.1
Other non-current assets 16 10.9 14.1
-------------------------------------------- ---- ----------- -------------------
1,508.8 1,451.3
-------------------------------------------- ---- ----------- -------------------
Current assets
Inventories 14 108.6 84.5
Other financial assets 16 2.2 3.0
Trade and other receivables 17 51.8 53.7
Corporation tax receivable - 9.1
Cash and cash equivalents 18 178.0 166.0
-------------------------------------------- ---- ----------- -------------------
340.6 316.3
-------------------------------------------- ---- ----------- -------------------
Total assets 1,849.4 1,767.6
-------------------------------------------- ---- ----------- -------------------
Current liabilities
Trade and other payables 20 (261.5) (224.8)
Other interest-bearing loans and borrowings 19 (1.2) -
Lease liabilities 12 (83.3) (78.3)
Provisions 21 (3.9) (6.5)
Other financial liabilities 16 (3.7) (0.0)
-------------------------------------------- ---- ----------- -------------------
(353.6) (309.6)
-------------------------------------------- ---- ----------- -------------------
Non-current liabilities
Other interest-bearing loans and borrowings 19 (119.3) (96.9)
Lease liabilities 12 (338.1) (304.7)
Provisions 21 (12.9) (6.7)
Other financial liabilities 16 (0.4) -
(470.7) (408.3)
-------------------------------------------- ---- ----------- -------------------
Total liabilities (824.3) (717.9)
-------------------------------------------- ---- ----------- -------------------
Net assets 1,025.1 1,049.7
-------------------------------------------- ---- ----------- -------------------
Equity attributable to equity holders
of the parent
Ordinary share capital 22 4.8 5.0
Consolidation reserve (372.0) (372.0)
Merger reserve 113.3 113.3
Translation reserve (0.1) (0.0)
Capital redemption reserve 0.2 -
Cash flow hedging reserve (1.6) 3.4
Retained earnings 1,280.5 1,300.0
-------------------------------------------- ---- ----------- -------------------
Total equity 1,025.1 1,049.7
-------------------------------------------- ---- ----------- -------------------
(1) See note 1.1 for an explanation of the prior year
restatement.
On behalf of the Board:
Mike Iddon
Chief Financial Officer
25 May 2023
Company number: 08885072
The notes on pages 19 to 76 form an integral part of these
financial statements.
Consolidated statement of changes in equity as at 30 March
2023
Cash Capital
Share Consolidation Merger flow hedging Translation redemption Retained Total
capital reserve reserve reserve reserve reserve earning equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Balance at
31 March 2022 5.0 (372.0) 113.3 3.4 (0.0) - 1,300.0 1,049.7
Total comprehensive
income for the
period
Profit for the
period - - - - - - 100.7 100.7
Other comprehensive
income (note
22) - - - (9.3) (0.1) - - (9.4)
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Total comprehensive
income for the
period - - - (9.3) (0.1) - 100.7 91.3
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Hedging gains
and losses
reclassified
to inventory - - - 4.3 - - - 4.3
Total hedging
gains and losses
reclassified
to inventory - - - 4.3 - - - 4.3
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Transactions
with owners,
recorded directly
in equity
Equity dividends
paid - - - - - - (58.7) (58.7)
Share-based
payment charge - - - - - - 4.9 4.9
Deferred tax
movement on
IFRS2 reserve - - - - - - (2.0) (2.0)
Share buyback (0.2) - - - - 0.2 (50.3) (50.3)
Purchase of
own shares - - - - - - (14.1) (14.1)
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Total contributions
by and distributions
to owners (0.2) - - - - 0.2 (120.2) (120.2)
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Balance at
30 March 2023 4.8 (372.0) 113.3 (1.6) (0.1) 0.2 1,280.5 1,025.1
----------------------- -------- ------------- -------- ------------- ----------- ----------- -------- -------
Consolidated statement of changes in equity as at 31 March
2022
Cash
Share Consolidation Merger flow hedging Translation Retained Total
capital reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Balance at 25 March 2021 5.0 (372.0) 113.3 (1.5) (0.0) 1,231.7 976.5
Total comprehensive income
for the period
Profit for the period - - - - - 124.5 124.5
Other comprehensive income
(note 22) - - - 6.7 (0.0) - 6.7
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Total comprehensive income
for the period - - - 6.7 (0.0) 124.5 131.2
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Hedging gains and losses
reclassified to inventory - - - (1.8) - - (1.8)
Total hedging gains and
losses reclassified to inventory - - - (1.8) - - (1.8)
--------------------------------- -------- ------------- -------- ------------- ----------- --------- ---------
Transactions with owners,
recorded directly in equity
Equity dividends paid - - - - - (48.5) (48.5)
Share-based payment charge - - - - - 4.9 4.9
Deferred tax movement on
IFRS2 reserve - - - - - (0.3) (0.3)
Purchase of own shares - - - - - (12.3) (12.3)
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Total contributions by
and distributions to owners - - - - - (56.2) (56.2)
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Balance at 31 March 2022 5.0 (372.0) 113.3 3.4 (0.0) 1,300.0 1,049.7
--------------------------------- -------- ------------- -------- ------------- ----------- --------- -------
Consolidated statement of cash flows for the 52 week period
ended 30 March 2023
52 week 53 week
period period
ended ended
30 March 31 March
2023 2022
GBPm GBPm
---------------------------------------------------------------- --------- ---------
Cash flows from operating activities
Profit for the period 100.7 124.5
Adjustments for:
Depreciation and amortisation 103.4 103.9
Profit on disposal of subsidiaries - (19.2)
Financial income (2.7) (0.2)
Financial expense 17.0 14.6
Share-based payment charges 4.9 4.9
Taxation 21.8 24.2
---------------------------------------------------------------- --------- ---------
245.1 252.7
Decrease in trade and other receivables 3.4 0.6
(Increase) in inventories (24.1) (0.8)
Increase in trade and other payables 36.9 19.8
Increase in provisions 3.6 6.8
Movement in working capital 19.8 26.4
Tax paid (13.7) (31.0)
---------------------------------------------------------------- --------- ---------
Net cash flow from operating activities 251.2 248.1
---------------------------------------------------------------- --------- ---------
Cash flows from investing activities
Proceeds from the sale of property, plant and equipment - 0.3
Interest received 2.7 0.3
Costs to acquire right-of-use assets (1.9) (0.3)
Acquisition of subsidiaries, net of cash acquired (0.5) (1.7)
Disposal of subsidiaries, net of cash disposed 0.4 0.6
Disposal of subsidiaries, net of cash disposed (non-underlying) - 19.2
Acquisition of property, plant and equipment and other
intangible assets (75.7) (55.5)
Net cash used in investing activities (75.0) (37.1)
---------------------------------------------------------------- --------- ---------
Cash flows from financing activities
Equity dividends paid (58.7) (48.5)
Proceeds from new loan 123.3 100.0
Repayment of borrowings (100.0) (100.0)
Debt issue costs (0.1) (3.3)
Cash receipts from lease incentives 22.0 -
Cash payments for the principal portion of the right-of-use
lease liability (68.9) (67.3)
Purchase of own shares (14.1) (12.3)
Share buyback (50.3) -
Interest paid (5.0) (3.5)
Interest paid on lease obligations (12.4) (11.5)
---------------------------------------------------------------- --------- ---------
Net cash used in financing activities (164.2) (146.4)
---------------------------------------------------------------- --------- ---------
Net increase in cash and cash equivalents 12.0 64.6
Cash and cash equivalents at beginning of period 166.0 101.4
---------------------------------------------------------------- --------- ---------
Cash and cash equivalents at end of period 178.0 166.0
---------------------------------------------------------------- --------- ---------
The notes on pages 19 to 76 form an integral part of these
financial statements.
Company balance sheet at 30 March 2023
At 30 March At 31 March
2023 2022 (restated)(1)
Note GBPm GBPm
--------------------------------------------- ---- ----------- -------------------
Non-current assets
Investments in subsidiaries 28 936.2 936.2
Deferred tax asset(1) 15 2.8 2.8
Trade and other receivables 17 578.4 600.2
1,517.4 1,539.2
--------------------------------------------- ---- ----------- -------------------
Current assets
Other financial assets 16 2.0 1.6
Cash and cash equivalents 18 0.4 -
2.4 1.6
--------------------------------------------- ---- ----------- -------------------
Total assets 1,519.8 1,540.8
--------------------------------------------- ---- ----------- -------------------
Current liabilities
Trade and other payables 20 (618.0) (552.9)
(618.0) (552.9)
--------------------------------------------- ---- ----------- -------------------
Non-current liabilities
Other interest-bearing loans and borrowings 19 (97.3) (96.9)
Other financial liabilities 16 (0.4) -
(97.7) (96.9)
--------------------------------------------- ---- ----------- -------------------
Total liabilities (715.7) (649.8)
--------------------------------------------- ---- ----------- -------------------
Net assets 804.1 891.0
--------------------------------------------- ---- ----------- -------------------
Equity attributable to equity holders of the
parent
Ordinary share capital 22 4.8 5.0
Merger reserve 113.3 113.3
Capital redemption reserve 0.2 -
Cash flow hedging reserve 1.2 1.3
Retained earnings 684.6 771.4
--------------------------------------------- ---- ----------- -------------------
Total equity 804.1 891.0
--------------------------------------------- ---- ----------- -------------------
(1) See note 1.1 for an explanation of the prior year
restatement.
As permitted by section 408 of the Companies Act 2006, the
Company's income statement has not been included in these financial
statements. The Company's profit for the 52 week period ended 30
March 2023 was GBP33.4m (profit for the 53 week period ended 31
March 2022 was GBP23.8m).
On behalf of the Board:
Mike Iddon
Chief Financial Officer
25 May 2023
Company number: 08885072
The notes on pages 19 to 76 form an integral part of these
financial statements.
Company statement of changes in equity as at 30 March 2023
Cash Capital
Share Merger flow hedging redemption Retained Total
capital reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------- -------- -------- ------------- ----------- --------- -------
Balance at 31 March 2022 5.0 113.3 1.3 - 771.4 891.0
Total comprehensive income
for the period
Profit for the period - - - - 33.4 33.4
Other comprehensive income - - (0.1) - - (0.1)
------------------------------- -------- -------- ------------- ----------- --------- -------
Total comprehensive income
for the period - - (0.1) - 33.4 33.3
------------------------------- -------- -------- ------------- ----------- --------- -------
Transactions with recorded
directly in equity
Equity dividends paid - - - - (58.7) (58.7)
Share-based payment charge - - - - 4.9 4.9
Deferred tax movement on IFRS2
reserve - - - - (2.0) (2.0)
Share buyback (0.2) - - 0.2 (50.3) (50.3)
Purchase of own shares - - - - (14.1) (14.1)
------------------------------- -------- -------- ------------- ----------- --------- -------
Total contributions by and
distributions to owners (0.2) - - 0.2 (120.2) (120.2)
Balance at 30 March 2023 4.8 113.3 1.2 0.2 684.6 804.1
------------------------------- -------- -------- ------------- ----------- --------- -------
Company statement of changes in equity as at 31 March 2022
Cash flow
Share Merger hedging Retained Total
capital reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm
----------------------------------------- -------- -------- --------- --------- -------
Balance at 25 March 2021 5.0 113.3 (1.2) 800.8 917.9
Total comprehensive income for
the period
Profit for the period - - - 23.8 23.8
Other comprehensive income - - 2.5 - 2.5
Total comprehensive income for
the period - - 2.5 23.8 26.3
----------------------------------------- -------- -------- --------- --------- -------
Transactions recorded directly
in equity
Equity dividends paid - - - (48.5) (48.5)
Share-based payment charge - - - 7.9 7.9
Deferred tax movement on IFRS2
reserve - - - (0.3) (0.3)
Purchase of own shares - - - (12.3) (12.3)
Total contributions by and distributions
to owners - - - (53.2) (53.2)
Balance at 31 March 2022 5.0 113.3 1.3 771.4 891.0
----------------------------------------- -------- -------- --------- --------- -------
Company statement of cash flows for the 52 week period ended 30
March 2023
52 week 53 week
period ended period
30 March ended 31
2023 March 2022
GBPm GBPm
------------------------------------------------- ------------- -----------
Cash flows from operating activities
Profit for the period 33.4 23.8
Financial expense 1.5 3.2
Share-based payment charges 4.9 7.9
Tax (3.0) (2.9)
-------------------------------------------------- ------------- -----------
36.8 32.0
Increase in trade and other payables 62.8 44.6
Tax paid 3.5 3.5
-------------------------------------------------- ------------- -----------
Net cash flow from operating activities 103.1 80.1
-------------------------------------------------- ------------- -----------
Cash flows from investing activities
Decrease/(increase) in amounts owed by group
undertakings 21.9 (12.8)
Net cash flow used in investing activities 21.9 (12.8)
Cash flows from financing activities
Equity dividends paid (58.7) (48.5)
Proceeds from new loan 100.0 100.0
Repayment of borrowings (100.0) (100.0)
Debt issue costs - (3.3)
Share buyback (50.3) -
Interest paid (1.5) (3.2)
Purchase of own shares (14.1) (12.3)
-------------------------------------------------- ------------- -----------
Net cash used in financing activities (124.6) (67.3)
-------------------------------------------------- ------------- -----------
Net increase in cash and cash equivalents 0.4 -
Cash and cash equivalents at beginning of period - -
-------------------------------------------------- ------------- -----------
Cash and cash equivalents at end of period 0.4 -
-------------------------------------------------- ------------- -----------
Notes (forming part of the financial statements)
Pets at Home Group Plc (the Company) is a company incorporated
in the United Kingdom and its registered office is Epsom Avenue,
Stanley Green, Handforth, Cheshire, SK9 3RN.
1 Significant accounting policies
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
consolidated financial statements.
1.1 Basis of preparation
The consolidated financial statements were prepared in
accordance with UK adopted international accounting standards and
applicable law. The Company's financial statements have been
prepared in accordance with UK adopted international accounting
standards as applied in accordance with the provisions of the
Companies Act 2006 and applicable law. The Company has taken
advantage of the exemption provided under section 408 of the
Companies Act 2006 not to publish its individual income statement
and related notes.
The financial statements are prepared under the historical cost
convention, as modified by the revaluation of derivative financial
instruments to fair value, and in accordance with those parts of
the Companies Act 2006 applicable to companies reporting under UK
adopted international accounting standards.
New standards and interpretations issued by the International
Accounting Standards Board (IASB) and the International Financial
Reporting Interpretations Committee (IFRIC) becoming effective
during the 52 week period ended 30 March 2023 have not had a
material impact on the Group's financial statements.
The Group is assessing the impact of IFRS 17 Insurance Contracts
(applicable for the financial period beginning 31 March 2023).
The Group receives rental and other occupancy income from Joint
Venture veterinary practices which are located within the Group's
retail stores, and that income has increased as this part of the
Group's business has grown.Therefore, the Directors have concluded
that this income should be separately presented on the face of the
income statement. Following the change in the current period
presentation and to aid comparability, the Directors have also
reclassified the comparative amounts for the 53 week period ended
31 March 2022 and so GBP11.7m has been reclassified from selling
and distribution expenses to other income. There is no impact on
profit, net assets, or the cashflow statement.
The Directors have restated the presentation of the deferred tax
assets in the Consolidated and Company balance sheets as at 31
March 2022. Under IAS 1, deferred tax is classified as a
non-current balance. As a result, the GBP1.1m of deferred tax
assets on the Group balance sheet and GBP2.8m on the Company
balance sheet at 31 March 2022 have been reclassified from current
assets to non-current assets. The restatement has had no impact on
profit, net assets, or the cashflow statement.
The Directors have restated the number and FTE of colleagues in
note 4 for the 53 week period ended 31 March 2022. These have been
restated to show averages across the financial period.
1.2 Measurement convention
The consolidated financial statements are prepared on the
historical cost basis except that the following assets and
liabilities are stated at their fair value: derivative financial
instruments, financial instruments classified as fair value through
the profit or loss. Non-current assets held for sale are stated at
the lower of previous carrying amount and fair value less costs to
sell.
1.3 Going concern
The Group and Company's business activities, together with the
factors likely to affect its future development, performance and
position, are set out in the Strategic Report. The financial
position of the Group and Company, its cash flows, liquidity
position and borrowing facilities are described in the Chief
Financial Officer's review. In addition, note 23 to the financial
statements includes the Group and Company's objectives, policies
and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and
hedging activities; and its exposures to credit risk and liquidity
risk.
The Directors of the Group have prepared cash flow forecasts for
a period of at least 12 months from the date of the approval of
these financial statements which indicate that, despite net current
liabilities of GBP13.0m and taking account of reasonably possible
downsides, the Group will have sufficient funds, through its
revolving credit facility, to meet its liabilities as they fall due
for that period.
In preparing the forecasts for the Group, the Directors have
carefully considered the impact of consumer confidence,
geopolitical tensions and the actual and potential impact on supply
chains, as well as energy cost inflation on liquidity and future
performance. The Group has also considered the impact of climate
change and the Task Force on Climate Related Financial Disclosures
('TCFD') scenario analysis conducted in undertaking this
assessment.
The Group has access to a revolving credit facility of GBP300m
which expires in March 2027 and a GBP26.0m asset backed loan which
expires on 27 March 2030. The Group has GBP123.3m drawn down at 30
March 2023 and cash balances of GBP178.0m. The lowest level of
headroom forecast over the next 12 months from the date of signing
of the financial statements is in excess of GBP360.5m in the base
case scenario. On a sensitised basis, the lowest level of headroom
forecast over the next 12 months from the date of approving of the
financial statements is GBP346.6m due to the removal of the
dividend payment in an extreme scenario. The Group has been in
compliance with all covenants applicable to this facility within
the financial year and is forecast to continue to be in compliance
for 12 months from the date of signing of the financial statements.
Two severe but plausible downside scenarios were calculated
compared to the base case forecast of profit and cash flow to
assess headroom against facilities for the next 12 months. A third
extreme scenario, which is considered highly unlikely was also
modelled to thoroughly sensitise the assumptions in the base case
scenario. The three scenarios include:
- Scenario 1: Reduction on Group like-for-like sales growth assumptions
of 1% in each year throughout the forecast period, but ordinary dividends
continue to be paid.
- Scenario 2: Using scenario 1 outcomes and further impacted by a conflated
risk impact of GBP26.5m on sales and GBP13.25m on PBT per annum (using
specific financial risks taken from Group risk register with sales and
PBT financial impact quantified), with dividends held at 12.8p per share
per annum.
- Scenario 3: Group like-for-like sales growth declines to 0% in each year
and a conflated risk impact of GBP84.5m on sales and GBP42.0m on PBT is
applied (using the top risks from Group risk register with sales and PBT
impact quantified), with dividends cut to nil to conserve cash.
Against these negative scenarios, adjusted projections showed no
breach of covenants. Further mitigating actions could also be taken
in such scenarios should it be required, including reducing capital
expenditure.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.3 Going concern (continued)
Despite net current liabilities of GBP13.0m at Group level and
GBP615.6m in the Company, the Directors of Pets at Home Group Plc,
having made appropriate enquiries including the principal risks and
uncertainties on page 24 of the Annual Report, consider that
adequate resources exist for the Group and Company will have
sufficient funds to continue to meet their liabilities for a period
of at least 12 months from the date of approval of these financial
statements and that, therefore, it is appropriate to adopt the
going concern basis in preparing the Group consolidated financial
statements and the Company only financial statements as at and for
the period ended 30 March 2023.
1.4 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable. The acquisition date
is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Losses applicable to
the non-controlling interests in a subsidiary are allocated to the
non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance.
The Group and Company operate an Employee Benefit Trust (EBT)
for the purposes of acquiring shares to fund share awards made to
employees. The EBT is deemed to be a subsidiary of the Group and
Company as Pets at Home Group Plc is considered to be the ultimate
controlling party for accounting purposes. The assets and
liabilities of this trust have been included in the consolidated
financial information. The cost of purchasing own shares held by
the EBT is accounted for in retained earnings.
Investment in Joint Venture veterinary practices
Th e Group has a number of non-participatory shareholdings in
veterinary practice companies, which are accounted for as Joint
Venture arrangements. The veterinary practices were established
under terms that require mutual agreement between the Group and the
Joint Venture Partner, and do not give the Group power over
decision making, nor joint control, to affect its exposure to, or
the extent of, the returns from its involvement with the practices
and therefore are not consolidated in these financial statements.
Further, the Group is not entitled to profits, losses, or any
surplus on winding up or disposal of the Joint Venture veterinary
practices, and as such no participatory interest is recognised. The
Group's category of shareholding in the Joint Venture veterinary
practices entitles the Group to charge management fees for support
services provided. For further details see notes 16, 17 and 27. The
Group's shares are non-participatory, and therefore the Group does
not share in any profits, losses or other distribution of value
from the Joint Venture company; the investments are held at cost
less impairment, which is deemed to be their carrying value as
explained further in note 16.
1.5 Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are
stated at fair value are retranslated to the functional currency at
foreign exchange rates ruling at the dates the fair value was
determined.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation, are
translated to the Group's presentational currency, sterling, at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for the period where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve or non-controlling
interest, as the case may be.
Functional currency
The consolidated financial statements are presented in sterling
which is the Group and Company's functional currency and have been
rounded to the nearest GBP0.1m.
1.6 Classification of financial instruments issued by the
Group
Following the adoption of IAS32, financial instruments issued by
the Group are treated as equity only to the extent that they meet
the following two conditions:
(a) they include no contractual obligations upon the Company (or
Group as the case may be) to deliver cash or other financial assets
or to exchange financial assets or financial liabilities with
another party under conditions that are potentially unfavourable to
the Company (or Group); and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability.
1.7 Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
equity and debt securities, trade and other receivables, cash and
cash equivalents, interest-bearing borrowings, and trade and other
payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method, less any
expected credit loss.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purposes of the cash
flow statement and are only offset for balance sheet purposes where
the offsetting criteria are met.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.7 Non-derivative financial instruments (continued)
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value, net of attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost using the effective interest method.
Contingent consideration
Contingent consideration on acquisition or disposal of a
subsidiary is valued at fair value at the time of acquisition or
disposal. Any subsequent change in fair value is recognised in
profit or loss (see 1.13).
1.8 Derivative financial instruments and hedging
Derivative financial instruments
Derivative financial instruments are recognised at fair value.
The gain or loss on remeasurement to fair value is recognised
immediately in profit or loss. However, where derivatives qualify
for hedge accounting, recognition of any resultant gain or loss
depends on the nature of the item being hedged (see below).
Cash flow hedges
Where a derivative financial instrument is designated as a hedge
of the variability in cash flows of a recognised asset or
liability, or a highly probable forecast transaction, the effective
part of any gain or loss on the derivative financial instrument is
recognised directly in the hedging reserve. Any ineffective portion
of the hedge is recognised immediately in the income statement.
If a hedge of a forecast transaction subsequently results in the
recognition of a financial asset or a financial liability, the
associated gains and losses that were recognised directly in equity
are reclassified into profit or loss in the same period or periods
during which the asset acquired or liability assumed affects profit
or loss, i.e. when interest income or expense is recognised.
When the hedged forecast transaction subsequently results in the
recognition of a non-financial item such as inventory, the amount
accumulated in the hedging reserve and the cost of hedging is
included directly in the initial cost of the non-financial item
when it is recognised. For all other hedging forecast transactions,
the amount accumulated in the hedging reserve and the cost of
hedging is reclassified to profit or loss in the same period or
periods during which the hedged expected future cash flows affect
the profit or loss.
For cash flow hedges, other than those covered by the preceding
two policy statements, the associated cumulative gain or loss is
removed from equity and recognised in the income statement in the
same period or periods during which the hedged forecast transaction
affects profit or loss.
When a hedging instrument expires or is sold, terminated or
exercised, or the entity revokes designation of the hedge
relationship but the hedged forecast transaction is still expected
to occur, the cumulative gain or loss at that point remains in
equity and is recognised in accordance with the above policy when
the transaction occurs. If the hedged transaction is no longer
expected to take place, the cumulative unrealised gain or loss
recognised in equity is recognised in the income statement
immediately.
1.9 Intra-group financial instruments
Financial guarantee contracts to guarantee the indebtedness of
companies within the Group are considered to be insurance
arrangements and accounted for as such. In this respect, the Group
treats the guarantee contract as a contingent liability until such
time as it becomes probable that a payment will be required under
the guarantee.
1.10 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses. Where parts of an
item of property, plant and equipment have different useful lives,
they are accounted for as separate items of property, plant and
equipment.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The estimated useful lives are as follows:
Freehold property - 50 years
Fixtures, fittings, tools and equipment - 3-10 years
Leasehold improvements - the term of the lease
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
The impact of climate change, particularly in the context of
risks identified in the Task Force on Climate Related Financial
Disclosures ('TCFD') scenario analysis have been considered and no
material impact on the carrying value, useful lives or residual
values have been identified.
1.11 Intangible assets
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and
recognised separately from goodwill are initially recognised at
their fair value at the acquisition date (which is regarded as
their cost).
Subsequent to initial recognition, intangible assets acquired in
a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis
as intangible assets that are acquired separately.
Customer lists are valued based on the forecast net present
value of the future economic relationship with those customers,
adjusted for forecast retention rates. Technology based 'know how'
assets are valued based on the expected cost to reproduce or
replace the asset, adjusted for the physical deterioration and
functional or economic obsolescence, if present and measurable.
Software is stated at cost less accumulated amortisation.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.11 Intangible assets (continued)
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful life of an asset. The
estimated useful lives are as follows:
Software - 2 to 7 years
Customer lists - 10 years
Technology based know-how - 10 years
Amortisation methods, useful lives and residual values are
reviewed at each balance sheet date.
Expenditure on Software as a Service ('SaaS') customisation and
configuration that is distinct from access to the cloud software
can only be capitalised to the extent it gives rise to an asset,
i.e. where the Group has the power to obtain the future economic
benefits and can restrict others' access to those benefits,
otherwise such expenditure in relation to developing SaaS for use
is expensed.
The impact of climate change, particularly in the context of
risks identified in the Task Force on Climate Related Financial
Disclosures ('TCFD') scenario analysis have been considered and no
material impact on the carrying value, useful lives or residual
values have been identified.
1.12 Leases
On completion of a lease, the Group recognises a right-of-use
asset, representing its right to use the underlying asset and a
lease liability, representing its obligation to make lease
payments. The lease liability is measured at the present value of
the lease payments over the term of the lease, discounted using the
interest rate implicit in the lease, or if that rate cannot be
readily determined, the Group's incremental borrowing rate. The
rate implicit in the lease cannot be readily determined and
therefore a rate based on the Group's incremental borrowing rate is
used. This rate is adjusted to take into account the risk
associated with the length of the lease. Lease payments will
include any fixed payments, including as a result of stepped rent
increases.
The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
payments made at or before the lease commencement date and any
lease incentives received or premiums paid. In the current period
the Group has received a lease incentive of GBP22m (2022: GBPnil)
in relation to the new distribution centre. The cash received has
been included within cash flows from financing activities on the
basis that it is associated with the payments for the lease
liability.
The Group has lease contracts in relation to property and
equipment. There are recognition exemptions for low-value assets
and short-term leases with a lease term of 12 months or less. Any
leases under a short-term licence agreement are excluded as they
fall into the lease term of 12 months or less. The Group recognises
the lease payments associated with these leases as an expense on a
straight-line basis over the term of the lease. The total value of
leases where the Group has taken a recognition exemption is
disclosed in note 12.
The Group has a small number of leases where it is an
intermediate lessor. For these leases, it accounts for the interest
in the head lease and sub-lease separately. It assesses the lease
classification of the sub-lease with reference to the right-of-use
asset arising from the head lease, not with reference to the
underlying asset.
The Group currently receives rental income from related Joint
Venture veterinary practices which are located within the Group's
retail stores. These rental incomes are disclosed in note 3. Under
IFRS16, the lease classification of sub-leases is assessed by
reference to the right-of-use asset under the head lease rather
than the underlying asset. This rental income is presented in other
income in the Consolidated Income Statement.
Right-of-use assets may be impaired if the lease becomes
onerous. Impairment costs would be charged to administrative
expenses if this occurred.
1.13 Business combinations
Business combinations are accounted for by applying the
acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group.
Acquisitions on or after 26 March 2010
For acquisitions on or after 26 March 2010, the Group measures
goodwill at the acquisition date as:
-- Scenario 1: Reduction on Group like-for-like sales growth assumptions
of 1% in each year throughout the forecast period, but ordinary dividends
continue to be paid.
-- Scenario 2: Using scenario 1 outcomes and further impacted by a conflated
risk impact of GBP26.5m on sales and GBP13.25m on PBT per annum (using
specific financial risks taken from Group risk register with sales and
PBT financial impact quantified), with dividends held at 12.8p per share
per annum.
-- Scenario 3: Group like-for-like sales growth declines to 0% in each year
and a conflated risk impact of GBP84.5m on sales and GBP42.0m on PBT is
applied (using the top risks from Group risk register with sales and PBT
impact quantified), with dividends cut to nil to conserve cash.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured, and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss. If contingent consideration is payable and is dependent on
future employment, it is recognised as an expense over the relevant
period as a cost of continuing employment.
Any contingent deferred consideration receivable is recognised
at fair value.
On a transaction-by-transaction basis, the Group elects to
measure non-controlling interests, which have both present
ownership interests and are entitled to a proportionate share of
net assets of the acquiree in the event of liquidation, either at
its fair value or at its proportionate interest in the recognised
amount of the identifiable net assets of the acquiree at the
acquisition date. All other non-controlling interests are measured
at their fair value at the acquisition date.
Acquisitions prior to 26 March 2010 (date of adoption of
IFRS)
IFRS1 grants certain exemptions from the full requirements of
Adopted IFRS for first time adopters. In respect of acquisitions
prior to 26 March 2010, goodwill is included on the basis of its
deemed cost.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.14 Assessment of control with regard to Joint Ventures
The Group has assessed, and continually assesses, whether the
level of an individual Joint Venture veterinary practice's
indebtedness to the Group, particularly those with high levels of
indebtedness, implies that the Group has the practical ability to
control the Joint Venture, which would result in the requirement to
consolidate. In making this judgement, the Group reviewed the terms
of the Joint Venture agreement and the question of practical
ability, as a provider of working capital to control the activities
of the practice. This included consideration of barriers to the
Group's ability to exercise such practical or other control which
include difficulty in replacing Joint Venture Partners due to the
shortage of veterinarians in the UK and reputational damage within
the veterinary network should the Group attempt to exercise
control, as well as potential barriers to the Joint Venture Partner
exercising their own power over the activities of the practice. We
note that under the terms of the Joint Venture agreement, the
partners run their practices with complete operational and clinical
freedom. The Group is satisfied that on the balance of evidence
from the Group's experience as shareholder and provider of working
capital support to the practices, it does not have the current
ability to exercise control over those practices to which operating
loans are advanced, and therefore non consolidation is
appropriate.
1.15 Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is based on the weighted average cost principle and
includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs in bringing them to
their existing location and condition, less rebates and
discounts.
Provision is made against specific inventory lines where market
conditions identify an issue in recovering the full cost of that
Stock Keeping Unit ("SKU"). The provision focuses on the age of
inventory and the length of time it is expected to take to sell and
applies a progressive provision against the gross inventory based
on the numbers of days' stock on hand. Where necessary, further
specific provision is made against inventory lines, where the
calculated provision is not deemed sufficient to carry the
inventory at net realisable value.
To the extent that the ageing profile of gross inventory as
calculated by this provision methodology results in a material
provision, it will be disclosed as an estimate that may have an
impact on subsequent periods. To the extent this is material, it
will be disclosed in note 1.22.
1.16 Impairment excluding inventories and deferred tax
assets
Financial assets (including receivables)
Measurement of Expected Credit Losses ('ECLs') and definition of
default
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
Group in accordance with the contract and the cash flows that the
Group expects to receive). ECLs are discounted at the effective
interest rate of the financial asset.
The definition of default is applicable to intercompany and
related party receivables but not relevant to trade receivables
where the lifetime expected credit loss is considered. The Group
considers Joint Venture receivables (operating loans) to be in
default when the underlying veterinary practice is significantly
under-performing against its business plan, assessed based on
future cashflow forecasts for the individual practices which
utilise consistent assumptions across all practices. Any shortfall
in repayment of the Joint Venture loans and receivables following
the 10-year forecast period are considered to be in default. Loss
given default is also determined based on the forecast shortfall
amount. Those within the performing credit risk category are deemed
to have low credit risk. Practices categorised within the in
default credit risk categories are those considered to be in
default based on their cashflow forecast. Significant increase in
credit risk is not applicable to Joint Venture operating loans due
to the on-demand payment terms.
The Group considers initial set up loans to Joint Ventures to be
in default when the loan remains outstanding once the practice has
reached 15 years of age. Significant increase in credit risk is
defined as any practice which has an operating loan which is in
default as defined above. All other loans are considered to be
performing and have low credit risk.
The Group considers other intercompany and related party assets
to be in default when the entity does not have the forecasted
future funds available to repay the balance, if recalled.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities at FVOCI are
credit-impaired. A financial asset is 'credit-impaired' when one or
more events that have a detrimental impact on the estimated future
cash flows of the financial asset have occurred.
Write-offs
The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no
realistic prospect of recovery. Details of these provisions are
explained in note 16.
Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the asset's
recoverable amount is estimated. For goodwill, and intangible
assets that have indefinite useful lives or that are not yet
available for use, the recoverable amount is estimated each period
at the same time.
The recoverable amount of an asset or cash-generating unit as
defined by IAS36 is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
post-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets
(the 'cash-generating unit'). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to
cash-generating units ('CGUs'). Subject to an operating segment
ceiling test, for the purposes of goodwill impairment testing, CGUs
to which goodwill has been allocated are aggregated so that the
level at which impairment is tested reflects the lowest level at
which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups
of CGUs that are expected to benefit from the synergies of the
combination.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.16 Impairment excluding inventories and deferred tax assets
(continued)
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
1.17 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the Group pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
income statement in the periods during which services are rendered
by employees.
Short term benefits
Short term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
Share-based payments
A number of employees of the Company's subsidiaries (including
Directors) receive an element of remuneration in the form of
share-based payments, whereby employees render services in exchange
for shares in Pets at Home Group Plc or rights over shares.
Share-based payments are measured at fair value at the date of
grant. The fair value of transactions involving the granting of
shares is determined by the share price at the date of grant. The
fair value of transactions involving the granting of share options
is calculated by an external valuer based on a binomial model. In
valuing share-based payments, no account is taken of any
performance conditions, other than conditions linked to the price
of the shares of Pets at Home Group Plc ('market conditions').
The cost of share-based payments is recognised, together with a
corresponding increase in equity, on a straight-line basis over the
vesting period based on the Company's estimate of how many of the
awards will eventually vest. No expense is recognised for awards
that do not ultimately vest, except for awards where vesting is
conditional upon a market condition, which are treated as vesting
irrespective of whether or not the market condition is satisfied,
provided that all other performance conditions are satisfied. Where
the terms of a share-based payment award are modified, as a
minimum, an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in
the value of the transaction as a result of the modification, as
measured at the date of the modification.
Where a share-based payment award is cancelled, it is treated as
if it had vested on the date of cancellation and any expense not
yet recognised for the award is recognised immediately. However, if
a new award is substituted for the cancelled award and designated
as a replacement award on the date that it is granted, the
cancelled and new awards are treated as if they were a modification
to the original award, as described in the previous paragraph. The
dilutive effect of outstanding options is reflected as additional
share dilution in the computation of diluted earnings per
share.
Employee Benefit Trust
T he assets and liabilities of the Employee Benefit Trust
('EBT') have been included in the Group and Company accounts. The
assets of the EBT are held separately from those of the Company.
Neither the purchase nor sale of own shares leads to a gain or loss
being recognised in the Group consolidated statement of
comprehensive income.
Investments in the Company's own shares held by the EBT are
presented as a deduction from reserves and the number of such
shares is deducted from the number of shares in issue when
calculating the diluted earnings per share. The trustees of the
holdings of Pets at Home Group Plc shares under the Pets at Home
Group Employee Benefit Trust have waived or otherwise foregone any
and all dividends paid.
1.18 Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects risks specific to
the liability.
1.19 Revenue and cost of sales
Revenue represents the total amount receivable for goods and
services, net of discounts, coupons, returns and excluding value
added tax, sold in the ordinary course of business, and arises
substantially from activities in the United Kingdom.
Revenue is recognised when the Group transfers control of goods
or services to a customer at the amount to which the Group expects
to be entitled, and substantially all of the Group's performance
obligations have been fulfilled. Depending on whether certain
criteria are met, revenue is recognised either over time, in a
manner that best reflects the Group's performance, or at a point in
time, when control of the goods or services is transferred to the
customer.
Sale of goods in-store and online
Retail revenue from the sale of goods is recorded net of value
added tax, colleague discounts, coupons, vouchers, returns and the
free element of multi-save transactions. Sale of goods represents
food and accessories sold in-store and online, with revenue
recognised at the point in time the customer obtains control of the
goods and substantially all of the Group's performance obligations
have been fulfilled, which is when the transaction is completed
in-store and at point of delivery to the customer for online
orders. Revenue is adjusted to account for estimates for
anticipated returns and a provision is recognised within trade and
other payables. Estimates for anticipated returns are calculated
using past data for both in-store and online transactions. No
separate asset has been recognised (with no corresponding
adjustment to cost of sales) in relation to the value of products
to be recovered from the customer as the products are not always in
a resaleable condition.
Gift vouchers and cards
Revenue from the sale of gift vouchers and cards is deferred
until the voucher is redeemed, at which point performance
obligations have been fulfilled. In line with IFRS15 the value of
revenue deferred is based on expected redemption rates. The Group
continues to assess the appropriateness of the expected redemption
rates against actual redemptions.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.19 Revenue and cost of sales (continued)
VIP loyalty scheme
Under the VIP loyalty scheme, points are earned by customers
upon the purchase of goods and services. These points can be
converted by nominated charities into gift cards for redemption
against goods and services in-store and online. The sales value of
the points earned under the VIP scheme are treated as deferred
income; the sales are only recognised once the points have been
redeemed by the charities, at which point performance obligations
have been fulfilled. The points do not expire and have no value to
the customer.
Subscription orders
Revenue for subscription orders is recognised at the point of
delivery of each incremental order to the customer at which point
performance obligations have been fulfilled. Subscription services
primarily relate to the repeat order of flea and worm products sold
online and in-store.
Provision of services
Revenue from the provision of services is recorded net of value
added tax, colleague discounts, coupons and vouchers. Provision of
services represents veterinary group income, grooming revenue and
insurance commissions, with revenue recognised upon provision of
the service to the customer at the point at which the Group has
substantially fulfilled its performance obligations.
i) Veterinary Group income
Veterinary Group income represents revenue from the provision of
veterinary services from Company managed practices and income from
the provision of administrative support services to Joint Venture
veterinary practices. Revenue received for the provision of
veterinary services is recognised at the point of provision of the
service and is recognised net of value added tax, colleague
discounts, coupons and vouchers. Fee income received from the Joint
Venture veterinary practice companies for administrative support
services is recognised in the period the services relate to and
recorded net of value added tax. Fee income received from Joint
Venture companies in relation to network purchasing arrangements is
recognised as the contractual commitments are fulfilled to create
an entitlement to the revenue. The Group also receives revenue in
relation to business development for the Joint Venture companies
and recognises this within operating income.
Revenue derived from care plans is recognised on an apportioned
basis relative to delivery of the service. Revenue on annual
'Complete Care' plans is deferred and recognised at the point at
which treatment and/or services are provided against the plan at an
amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. Once the
plan has expired, any unutilised deferred revenue will be
recognised as revenue. Revenue from 'Vac4Life' plans is deferred
when payment is received and then recognised in reducing
proportions over the first three years of the plan when
vaccinations/boosters are provided.
Rental income received from in-store Joint Venture veterinary
practices is disclosed within note 3 and is categorised as other
income.
ii) Grooming revenue
Grooming revenue is recognised net of value added tax, colleague
discounts, coupons and vouchers, at the point of provision of the
service to the customer. Deposits received are deferred until the
grooming service has been performed.
iii) Insurance commissions
Insurance commissions are recognised on a pro-rated basis over
the period the insurance policy relates to.
Accrued income
Accrued income relates to income in relation to fees from Joint
Venture veterinary practices, and overrider and promotional income
from suppliers which has not yet been invoiced . Accrued income has
been classified as current as it is expected to be invoiced and
received within 12 months of the period end. Supplier income is
recognised on an accruals basis, based on the expected entitlement
that has been earned up to the balance sheet date for each relevant
supplier contract.
Cost of sales
Cost of sales includes costs of goods sold and other directly
attributable costs, promotional income and rebate income received
from suppliers, including costs to deliver administrative support
services to Joint Venture veterinary practices and costs to deliver
grooming services.
Supplier income
A number of different types of supplier income are negotiated
with suppliers via the joint business planning process in
connection with the purchase of goods for resale, the largest of
which being overrider income and promotional income, which are
explained below. The supplier income arrangements are typically not
coterminous with the Group's financial period, instead running
alongside the calendar year. Such income is only recognised when
there is reasonable certainty that the conditions for recognition
have been met by the Group, and the income can be measured reliably
based on the terms of the contract. This income is recognised as a
credit within gross margin to cost of sales and, to the extent that
the rebate relates to unsold stock purchases, as a reduction in the
cost of inventory.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract. The accrued incentives,
rebates and discounts receivable at period end are included within
trade and other receivables.
Given the presence of the joint business plans, on the basis of
the historic recoverability of accrued balances, and as amounts are
typically agreed with suppliers prior to recognition, supplier
income is not considered to be an area of significant estimation
that could impact on the following financial year.
Supplier income comprises:
Overrider income
Overrider income comprises three main elements:
1.Fixed percentage-based income: These relate largely to
volumetric rebates based on the joint business plan agreements with
suppliers. The income accrued is based on the Group's latest
forecast volumes and the latest contract agreed with the supplier.
Income is not recognised until the Group has reasonable certainty
that the joint business agreement will be fulfilled, with the
amount of income accrued regularly reassessed and remeasured
throughout the contractual period, based on actual performance
against the joint business plan.
Notes (forming part of the financial statements) continued
1 Significant accounting policies (continued)
1.19 Revenue and cost of sales (continued)
2. Fixed lump sum income: These are typically guaranteed lump
sum payments made by the supplier and are not based on volume.
Fixed lump sum income is usually predicated on confirmation of a
supplier contract and typically includes performance conditions
upon the Group, such as marketing and promotional campaigns. These
amounts are recognised periodically when contractual milestones
have been met such as the promotion being run or marketing
in-store.
3. Growth income: These are tiered volumetric rebates relating
to growth targets agreed with the supplier in the joint business
planning process. These are retrospective rebates based on sales
volumes or purchased volumes. Income is recognised to the extent
that it is reasonably certain that the conditions will be achieved,
with such certainty increasing in the latter part of the calendar
year.
Promotional income
Promotional income relates to supplier funded rebates specific
to promotional activity run in agreement between the Group and its
suppliers. Rebates are agreed at an individual inventory article
level for agreed periods of time and are systemically calculated
based on article sales information. No estimation is applied in
calculating the promotional income receivable.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract. The accrued incentives,
rebates and discounts receivable at period end are included within
trade and other receivables.
1.20 Expenses
Financing income and expenses
Financing expenses comprise interest payable under the effective
interest rate method, incorporating amortisation of loan
arrangement fees, finance charges on shares classified as
liabilities, unwinding of the discount on provisions, interest on
lease liabilities and net foreign exchange gains or losses that are
recognised in the income statement (see foreign currency accounting
policy). Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that takes a
substantial time to be prepared for use are capitalised as part of
the cost of that asset. Financing income comprises interest
receivable on funds invested, dividend income, and net foreign
exchange gains.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Dividend
income is recognised in the income statement on the date the
entity's right to receive payment is established. Foreign currency
gains and losses are reported on a net basis.
1.21 Taxation
Tax on the profit or loss for the period comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the period, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
1.22 Accounting estimates and judgements
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions concerning the future that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. These judgements are
based on historical experience and management's best knowledge at
the time and the actual results may ultimately differ from these
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis and revisions to accounting estimates are recognised
in the period in which the estimates are revised and in any future
periods affected.
The estimates and assumptions that have significant risk of
causing a material adjustment to the carrying value of assets and
liabilities are explained below.
Impairment of goodwill and other intangibles (estimate)
Determining whether goodwill and other intangibles are impaired
requires an estimation of the value in use of the cash-generating
units to which goodwill and other intangible assets have been
allocated. The value in use calculation requires estimation of
future cash flows expected to arise from the cash-generating unit
(CGU) and a suitable discount rate in order to calculate present
value. Details of CGUs as well as further information about the
assumptions made are disclosed in note 13. The Directors consider
that it is not reasonably possible for the assumptions for the
current financial year to change so significantly to warrant
inclusion as a significant estimate but acknowledge that there is
estimation uncertainty over the assumptions used in future
financial periods when calculating future cash flows.
1.23 Dividends
Final dividends are recognised in the Group's financial
statements as a liability in the period in which the dividends are
approved by shareholders such that the Company is obliged to pay
the dividend. Interim equity dividends are recognised in the period
in which they are paid.
1.24 Non-underlying items
Income or costs considered by the Directors to be non-underlying
are disclosed separately to facilitate year-on-year comparison of
the underlying trade of the business. The Directors consider
non-underlying costs to be those that are not generated from
ordinary business operations, infrequent in nature and unlikely to
reoccur in the foreseeable future.
1.25 Alternative Performance Measures
The Directors measure the performance of the Group based on a
range of financial measures, including measures not recognised by
UK-adopted IFRS. These Alternative Performance Measures may not be
directly comparable with other companies' Alternative Performance
Measures and the Directors do not intend these to be a substitute
for, or superior to, IFRS measures. Further information can be
found in the Glossary on page 77.
Notes (forming part of the financial statements) continued
2. Segmental Reporting
The Group has three reportable segments, Retail, Vet Group and
Central, which are the Group's strategic business units. The
Group's operating segments are based on the internal management
structure and internal management reports, which are reviewed by
the Executive Directors on a periodic basis. The Executive
Directors are considered to be the Chief Operating Decision
Makers.
The Group is a pet care business with the strategic advantage of
being able to provide products, services and advice, addressing all
pet owners' needs. Within this strategic umbrella, the Group has
three reportable segments, Retail, Vet Group and Central, which are
the Group's strategic business units. The strategic business units
offer different products and services, are managed separately and
require different operational and marketing strategies.
The operations of the Retail reporting segment comprise the
retailing of pet products purchased online and in-store, pet sales,
grooming services and insurance products. The operations of the Vet
Group reporting segment comprise General Practice veterinary
practices. Central includes veterinary telehealth business, Group
costs and finance expenses. Revenue and costs are allocated to a
segment where reasonably possible. For the purposes of goodwill
allocation, the veterinary telehealth business (hereafter known as
TVC) is classed as a separate CGU which sits within the central
operating segment.
The following summary describes the operations in each of the
Group's reportable segments. Performance is measured based on
segment underlying operating profit as included in the management
reports that are reviewed by the Executive Directors. These
internal reports are prepared in accordance with IFRS accounting
policies consistent with these financial statements. All material
operations of the reportable segments are carried out in the UK and
all revenue is from external customers.
52 week period ended 30 March 2023
----------------------------------- ----------------------------------------------
Retail Vet Group Central Total
Income statement GBPm GBPm GBPm GBPm
----------------------------------- ------- ----------- --------------- -------
Revenue 1,278.7 122.8 2.7 1,404.2
Underlying gross profit 601.5 65.6 1.2 668.3
Underlying operating profit/(loss) 109.9 51.7 (11.9) 149.7
Non-underlying operating expenses (10.1) - (2.8) (12.9)
------------------------------------- ------- ----------- --------------- -------
Segment operating profit/(loss) 99.8 51.7 (14.7) 136.8
Underlying net financing expense (11.1) (0.8) (1.4) (13.3)
Non-underlying financing expense (1.0) - - (1.0)
Profit/(loss) before tax 87.7 50.9 (16.1) 122.5
------------------------------------- ------- ----------- --------------- -------
Total non-underlying items 11.1 - 2.8 13.9
------------------------------------- ------- ----------- --------------- -------
Underlying profit/(loss)
before tax 98.8 50.9 (13.3) 136.4
------------------------------------- ------- ----------- --------------- -------
Non-underlying operating expenses in the periods ended 30 March
2023 and 31 March 2022 are explained in note 3.
53 week period ended 31 March 2022
----------------------------------- ----------------------------------------
Retail Vet Group Central Total
Income statement GBPm GBPm GBPm GBPm
----------------------------------- -------- ------------ ------- -------
Revenue 1,206.9 108.4 2.5 1,317.8
Underlying gross profit 589.9 56.5 1.5 647.9
Underlying operating profit/(loss) 112.5 43.2 (11.2) 144.5
Non-underlying items - 0.1 19.2 19.3
------------------------------------- -------- ------------ ------- -------
Segment operating profit 112.5 43.3 8.0 163.8
------------------------------------- -------- ------------ ------- -------
Underlying net financing expense (11.1) (0.1) (3.2) (14.4)
Non-underlying financing expense - - (0.7) (0.7)
Profit before tax 101.4 43.2 4.1 148.7
------------------------------------- -------- ------------ ------- -------
Total non-underlying items - (0.1) (18.5) (18.6)
------------------------------------- -------- ------------ ------- -------
Underlying profit/(loss)
before tax 101.4 43.1 (14.4) 130.1
------------------------------------- -------- ------------ ------- -------
Notes (forming part of the financial statements) continued
2 Segmental Reporting (continued)
52 week period ended 30 March 2023
-------------------------------- ------ -----------------------------------------------
Segmental revenue analysis Retail Vet Group Central Total
by revenue stream GBPm GBPm GBPm GBPm
-------------------------------- ------ ---------------- ----------- ------- -------
Retail - Food 744.8 - - 744.8
Retail - Accessories 486.4 - - 486.4
Retail - Services 47.5 - - 47.5
Vet Group - Joint Venture fee
income - 77.2 - 77.2
Vet Group - Company managed
practices - 37.5 - 37.5
Vet Group - Other income - 8.1 - 8.1
Central - Veterinary telehealth
services - - 2.7 2.7
----------------------------------------- ---------------- ----------- ------- -------
Total 1,278.7 122.8 2.7 1,404.2
----------------------------------------- ---------------- ----------- ------- -------
53 week period ended 31 March 2022
-------------------------------- ------ -----------------------------------------------
Segmental revenue analysis Retail Vet Group Central Total
by revenue stream GBPm GBPm GBPm GBPm
-------------------------------- ------ ---------------- ----------- ------- -------
Retail - Food 668.8 - - 668.8
Retail - Accessories 490.6 - - 490.6
Retail - Services 47.5 - - 47.5
Vet Group - Joint Venture fee
income - 69.9 - 69.9
Vet Group - Company managed
practices - 31.2 - 31.2
Vet Group - Other income - 7.3 - 7.3
Central - Veterinary telehealth
services - - 2.5 2.5
----------------------------------------- ---------------- ----------- ------- -------
Total 1,206.9 108.4 2.5 1,317.8
----------------------------------------- ---------------- ----------- ------- -------
Notes (forming part of the financial statements) continued
3 Expenses and auditor's remuneration
Included in operating profit are the following:
52 week 53 week
period period ended
ended 30 31 March
March 2023 2022(reclassified)(1)
GBPm GBPm
-------------------------------------------------------------- ----------- ----------------------
Non-underlying items
Provisions for voluntary redundancies for colleagues
at existing Distribution Centres 2.1 -
Provisions for retention bonuses for colleagues at
existing Distribution Centres 1.8 -
Pre-opening costs for new Distribution Centre 4.0 -
Dual running costs of operating new and existing Distribution
Centres 0.4 -
Project management costs of opening new Distribution
Centre 0.7 -
Depreciation of property plant and equipment (dual
running costs) 0.4 -
Depreciation of right-of-use assets (dual running costs) 0.7 -
Group restructure costs 2.7 -
Aborted transaction costs 0.1 -
Costs associated with the purchase of Joint Venture
veterinary practices - (0.1)
Profit on disposal of subsidiary - (19.2)
Total non-underlying items 12.9 (19.3)
Underlying items
Impairment gains on receivables (2.0) (0.7)
Software as a service (SaaS) expense 29.9 24.0
Depreciation of property, plant and equipment 25.7 25.4
Amortisation of intangible assets 9.8 8.8
Depreciation of right-of-use assets 66.8 69.7
Rentals under operating leases:
Expenses relating to short term or low value leases 0.1 0.1
Other income
Rental income from sub-leasing right-of-use assets
to third parties (0.3) (0.3)
Rental and other occupancy income from related parties(1) (12.2) (11.7)
Share-based payment charges 4.9 4.9
-------------------------------------------------------------- ----------- ----------------------
(1) Rental and other occupancy income from related parties is
included in other income. Following the change in the current
period presentation and to aid comparability, the Directors have
also reclassified the comparative amounts for the 53 week period
ended 31 March 2022 and so GBP11.7m has been reclassified from
selling and distribution expenses to other income.
Non-underlying items in operating profit
New Distribution Centre
The Group is in the process of building a new Distribution
Centre which is due to become fully operational in summer 2023.
This will replace the existing Distribution Centres. The process is
a significant operational change for the Group, outside of the
ordinary course of business. As part of the transition, the Group
has incurred operational and payroll costs which it has classed as
non-underlying. The items are split out as follows:
GBP2.1m of non-underlying charges relate to a provision for
voluntary redundancies for colleagues employed within the existing
Distribution Centres.
GBP1.8m of non-underlying charges relate to a provision for
retention bonuses for colleagues at the existing Distribution
Centres to remain employed by the Group until the point at which
the sites close.
GBP4.0m of non-underlying charges relate to pre-opening costs
for the new Distribution Centre such as rent and utilities which
have been incurred despite the site not yet being fully
operational.
GBP1.5m of non-underlying charges relate to costs incurred
whilst the existing Distribution Centres and the new distribution
centre are both in operation. These 'dual running' costs incurred
are temporary, and won't continue after the closure of the existing
distribution centres. A further GBP1.0m of dual running costs
relates to the interest expense on the lease liabilities of the
Distribution Centres. This is shown within finance expenses below
operating profit on the consolidated income statement.
GBP0.7m of non-underlying charges relate to project management
costs of opening the new Distribution Centre, including the
transfer of inventory from the existing Distribution Centres.
The remaining non-underlying items relate to:
GBP2.7m of non-underlying charges relate to costs for a
restructure within the Group Support Office. These have been
finalised and have either been paid or are due for payment in the
following financial year.
GBP0.1m of non-underlying charges relate to aborted transaction
costs.
The non-underlying credit of GBP0.1m recognised in the 53 week
period ended 31 March 2022 relates to the reversal of the
impairment of a right-of-use asset previously recognised on
acquisition of a Joint Venture veterinary practice. The property
has now been sub-leased, and therefore the impairment has been
reversed. The credit has been treated as a non-underlying item
since the original impairment was also treated in this way.
Notes (forming part of the financial statements) continued
3 Expenses and auditor's remuneration (continued)
During the 52 week period ended 25 March 2021, the Group
disposed of its 100% shareholding in the subsidiary Pets at Home
Veterinary Specialist Group Limited, and its subsidiaries Northwest
Veterinary Specialists Limited, Anderson Moores Veterinary
Specialists Limited, Eye-Vet Limited, Dick White Referrals Limited
and Veterinary Specialists (Scotland) Limited (collectively
referred to as the Specialist Referral Centres). The profit on
disposal of GBP19.2m reported in the non-underlying items in the 53
week period ended 31 March 2022 represented contingent deferred
consideration received as a result of the Specialist Referral
Centres achieving certain key performance indicators.
During the 53 week period ended 31 March 2022, the Group has
also recognised non-underlying charges of GBP0.7m in net financing
expense. These related to the acceleration of amortisation on debt
issue costs, as a consequence of the related senior finance
facilities being replaced on 31 March 2022.
Income or costs considered by the Directors to be non-underlying
are disclosed separately to facilitate year-on-year comparison of
the underlying trade of the business. The Directors consider
non-underlying costs to be those that are not generated from
ordinary business operations, infrequent in nature and unlikely to
reoccur in the foreseeable future.
Underlying items
The rentals under short term leases disclosed in relation to the
52 week period ended 30 March 2023 and the 53 week period ended 31
March 2022 relate to leases under short-term agreements or of low
value. These fall under the short-term and low value exemptions so
are excluded from the requirements of IFRS16 on the basis that the
lease terms are 12 months or less.
Auditor's remuneration
52 week 53 week
period ended period ended
30 March 31 March
2023 2022
GBPm GBPm
------------------------------------------------------ ---------------- -------------
Audit of the parent company financial statements 0.0 0.0
Amounts receivable by the Company's auditor and its
associates in respect of:
Audit of financial statements of subsidiaries pursuant
to legislation 1.3 1.0
Review of interim financial statements 0.1 0.1
Other assurance services 0.0 0.2
----------------------------------------------------------- ----------- -------------
1.4 1.3
----------------------------------------------------------- ----------- -------------
4 Colleague numbers and costs
The average number of persons employed by the Group (including
Directors) during the period, analysed by category, was as
follows:
53 week
52 week period period ended
ended 30 March 31 March
2023 2022 (restated)(1)
Number Number
--------------------------------- ---------------- --------------------
Sales and distribution - FTE 7,063 6,859
Administration - FTE 960 869
--------------------------------- ---------------- --------------------
8,023 7,728
--------------------------------- ---------------- --------------------
Sales and distribution - total 10,371 9,869
Administration - total 1,006 926
--------------------------------- ---------------- --------------------
11,377 10,795
--------------------------------- ---------------- --------------------
(1) The number of colleagues and FTE for the 53 week period ended
31 March 2022 have been restated to show the average number and FTE
of colleagues across the financial period.
-------------------------------------------------------------------------
The aggregate payroll costs of these persons were as
follows:
53 week
52 week period period ended
ended 30 March 31 March
2023 2022
GBPm GBPm
---------------------------------------------------- --------------- -------------
Wages and salaries 261.9 235.2
Social security costs 23.0 21.7
Contributions to defined contribution pension plans 8.6 7.9
---------------------------------------------------- --------------- -------------
293.5 264.8
---------------------------------------------------- --------------- -------------
Notes (forming part of the financial statements) continued
4 Colleague numbers and costs (continued)
Remuneration of Directors and Executive Management Team
53 week
52 week period period ended
ended 30 March 31 March
2023 2022
GBPm GBPm
---------------------------------------------------- --------------- -------------
Executive Directors' emoluments 2.9 2.8
Non-Executive Directors' emoluments 0.6 0.5
Executive Directors' amounts receivable under share
options 1.3 1.6
Executive Directors' pension contributions 0.1 0.1
---------------------------------------------------- --------------- -------------
Total Directors' remuneration 4.9 5.0
---------------------------------------------------- --------------- -------------
Executive Management Team emoluments 7.1 6.7
Executive Management Team amounts receivable under
share options 2.7 1.9
Executive Management Team pension contributions 0.2 0.3
---------------------------------------------------- --------------- -------------
Total Executive Management Team remuneration 10.0 8.9
---------------------------------------------------- --------------- -------------
In the opinion of the Board, the key management as defined under
revised IAS24 Related Party Disclosures are the Executive
Directors, Non-Executive Directors and the Executive Management
Team. Executive Directors' emoluments are also included within the
Executive Management Team emoluments disclosed above.
5 Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
period.
Diluted earnings per share is calculated by dividing the net
profit for the period attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
period plus the weighted average number of ordinary shares that
would be issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
52 week period 53 week period ended
ended 30 March 2023 31 March 2022
------------------------------------------- --------------------------- --------------------------------
After
Underlying non-underlying Underlying After non-underlying
trading items trading items
------------------------------------------- ---------- --------------- ---------- --------------------
Profit attributable to equity shareholders
of the parent (GBPm) 112.0 100.7 105.8 124.5
------------------------------------------- ---------- --------------- ---------- --------------------
Basic weighted average number of
shares 491.9 491.9 500.0 500.0
Dilutive potential ordinary shares 6.5 6.5 7.4 7.4
------------------------------------------- ---------- --------------- ---------- --------------------
Diluted weighted average number of
shares 498.4 498.4 507.4 507.4
------------------------------------------- ---------- --------------- ---------- --------------------
Basic earnings per share 22.8p 20.5p 21.2p 24.9p
Diluted earnings per share 22.5p 20.2p 20.8p 24.5p
------------------------------------------- ---------- --------------- ---------- --------------------
6 Finance income
52 week 53 week
period period
ended 30 ended 31
March 2023 March 2022
GBPm GBPm
--------------------------------------------------------- ----------- -----------
Interest receivable on loans to Joint Venture veterinary
practices 0.4 0.2
Other interest receivable 2.3 0.0
Total finance income 2.7 0.2
--------------------------------------------------------- ----------- -----------
Notes (forming part of the financial statements) continued
7 Finance expense
52 week 53 week
period period
ended 30 ended 31
March 2023 March 2022
GBPm GBPm
------------------------------------------------------ ----------- -----------
Bank loans at effective interest rate 4.6 3.2
Underlying interest expense on lease liability 11.4 11.4
Non-underlying interest expense on lease liability 1.0 -
Non-underlying accelerated amortisation on debt issue
costs - 0.7
Total finance expense 17.0 15.3
------------------------------------------------------ ----------- -----------
8 Taxation
Recognised in the income statement
52 week 53 week
period period
ended 30 ended 31
March 2023 March 2022
GBPm GBPm
------------------------------------------------------ ----------- -----------
Current tax expense
Current period 24.2 23.6
Adjustments in respect of prior periods (0.9) (0.6)
------------------------------------------------------ ----------- -----------
Current tax expense 23.3 23.0
------------------------------------------------------ ----------- -----------
Deferred tax expense
Origination and reversal of temporary differences (0.6) 1.1
Impact of difference between deferred and current tax
rates (0.1) 0.2
Adjustments in respect of prior periods (0.8) (0.1)
------------------------------------------------------ ----------- -----------
Deferred tax expense (1.5) 1.2
------------------------------------------------------ ----------- -----------
Total tax expense 21.8 24.2
------------------------------------------------------ ----------- -----------
The UK corporation tax standard rate for the period was 19%
(2022: 19%). Deferred tax at 30 March 2023 has been calculated
based on the rate of 25% which is the rate at which the majority of
items are expected to reverse. This is due to the increase in the
main rate of corporation tax to 25% from April 2023, which was
substantively enacted on 24 May 2021.
Deferred tax recognised in comprehensive income
52 week 53 week
period period
ended 30 ended 31
March 2023 March 2022
GBPm GBPm
-------------------------------------------------------- ----------- -----------
Effective portion of changes in fair value of cash flow
hedges (note 22) (1.3) 1.2
-------------------------------------------------------- ----------- -----------
Notes (forming part of the financial statements) continued
8 Taxation (continued)
Reconciliation of effective tax rate
52 week period ended 53 week period ended
30 March 2023 31 March 2022
--------------------------------- ---------------------------------
Underlying Non-underlying Underlying Non-underlying
trading items Total trading items Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ---------- -------------- ----- ---------- -------------- -----
Profit for the period 112.0 (11.3) 100.7 105.8 18.7 124.5
Total tax expense/(credit) 24.4 (2.6) 21.8 24.3 (0.1) 24.2
----------------------------------- ---------- -------------- ----- ---------- -------------- -----
Profit excluding taxation 136.4 (13.9) 122.5 130.1 18.6 148.7
----------------------------------- ---------- -------------- ----- ---------- -------------- -----
Tax using the UK corporation
tax rate for the period of
19%
(53 week period ended 31 March
2022: 19%) 25.9 (2.6) 23.3 24.7 3.5 28.2
Impact of difference between
deferred and current tax rates (0.1) - (0.1) 0.2 - 0.2
Depreciation on expenditure
not eligible for tax relief 0.8 - 0.8 0.6 - 0.6
Capital allowances super-deduction (1.7) - (1.7) (0.8) - (0.8)
Expenditure not eligible for
tax relief 1.1 - 1.1 0.3 - 0.3
Non-taxable income - - - - (3.6) (3.6)
Adjustments in respect of
prior periods (1.6) - (1.6) (0.7) - (0.7)
----------------------------------- ---------- -------------- ----- ---------- -------------- -----
Total tax expense 24.4 (2.6) 21.8 24.3 (0.1) 24.2
----------------------------------- ---------- -------------- ----- ---------- -------------- -----
The UK corporation tax standard rate for the 52 week period
ended 30 March 2023 was 19% (53 week period ended 31 March 2022:
19%). The effective tax rate before non-underlying items for the 52
week period ended 30 March 2023 was 17.9% (53 week period ended 31
March 2022: 18.7%).
9 Dividends paid and proposed
Group and Company
----------------------------
52 week 53 week
period ended period ended
30 March 31 March
2023 2022
GBPm GBPm
-------------------------------------------------------- ------------- -------------
Declared and paid during the period
Final dividend of 7.5p per share (2021: 5.5p per share) 37.0 27.2
Interim dividend of 4.5p per share (2022: 4.3p per
share) 21.7 21.3
-------------------------------------------------------- ------------- -------------
Proposed for approval by shareholders at the AGM
Final dividend of 8.3p per share (2022: 7.5p per share) 40.1 37.5
-------------------------------------------------------- ------------- -------------
The trustees of the following holdings of Pets at Home Group Plc
shares under the Pets at Home Group Employee Benefit Trust have
waived or otherwise foregone any and all dividends paid in relation
to the periods ended 30 March 2023 and 31 March 2022 and to be paid
at any time in the future (subject to the exceptions in the
relevant trust deed) on its respective shares for the time being
comprised in the trust funds:
Computershare Nominees (Channel Islands) Limited (holding at 30
March 2023: 5,323,525 shares; holding at 31 March 2022: 3,363,989
shares).
Notes (forming part of the financial statements) continued
10 Business combinations
In the 52 week period ended 30 March 2023, the Group has
acquired 100% of the 'A' shares of six veterinary practices, which
were previously accounted for as Joint Venture veterinary
practices. These practices were previously accounted for as Joint
Venture veterinary practices as the Group only held 100% of the
non-participatory 'B' ordinary shares, equating to 50% of the total
shares. Acquisition of the 'A' shares has led to the control and
consolidation of these practices. A detailed explanation for the
basis of consolidation can be found in note 1.4.
In the 52 week period ended 30 March 2023, GBP2.0m of operating
loans relating to these practices were written off in advance of
the acquisitions.
Up to the date of acquisition and in the comparative period
being the 53 week period ending 31 March 2022, these entities
listed below were all accounted for as a Joint Venture veterinary
practice where the Group held 100% of the non-participatory 'B'
ordinary shares. Acquisition of the 'A' shares has led to the
control and consolidation of these practices on the dates below,
leading to control from the date of acquisition and consolidation
from that date forward.
Subsidiaries acquired in the 52 week period ended 30 March
2023
Total proportion
Proportion of voting
of voting equity instruments Cash consideration
Principal Date of equity instruments owned following transferred
activity acquisition acquired the acquisition GBPm
--------------------------- ----------- ------------- ------------------- -------------------- ------------------
Accrington Vets4Pets Veterinary
Limited practice 16/06/2022 50% 100% 0.0
Companion Care (Banbury) Veterinary
Limited practice 24/06/2022 50% 100% 0.0
Companion Care (Chippenham) Veterinary
Limited practice 28/06/2022 50% 100% 0.0
Bangor Wales Vets4Pets Veterinary
Limited practice 19/10/2022 50% 100% 0.0
Newtownards Vets4Pets Veterinary
Limited practice 24/11/2022 50% 100% 0.0
Companion Care
(Llantrisant) Veterinary
Limited practice 07/03/2023 50% 100% 0.5
--------------------------- ----------- ------------- ------------------- -------------------- ------------------
Assets acquired and liabilities recognised at the date of
acquisition
The amounts recognised in respect of identifiable assets and
liabilities relating to the acquisitions are as follows. The
acquisition disclosures have been combined as each acquisition is
considered to be individually immaterial to the Group. On
acquisition, assets and liabilities are revalued to fair value. Pre
existing relationships between the Group and acquired Joint Venture
practice are not considered part of the business combination and
have been removed from the fair values of assets and liabilities
recognised on acquisition
Fair value
Book value of assets of assets and
and Adjustments liabilities
liabilities acquired on acquisition acquired
GBPm GBPm GBPm
---------------------------- ------------------------ --------------- --------------
Current assets
Cash and cash equivalents 0.1 - 0.1
Trade and other receivables 0.1 - 0.1
Inventories 0.1 - 0.1
Non-current assets
Tangible fixed assets 0.3 - 0.3
Intangible assets 0.1 0.3 0.4
Non-current liabilities
Lease liabilities 0.0 - 0.0
Current liabilities
Bank loans (0.2) - (0.2)
Overdrafts (0.2) - (0.2)
Partner loans (0.4) 0.4 -
Trade and other payables (2.4) 2.1 (0.3)
Net (liabilities)/assets (2.5) 2.8 0.3
------------------------------- --------------------- --------------- --------------
Notes (forming part of the financial statements) continued
10 Business combinations (continued)
Goodwill arising on acquisition
GBPm
------------------------------------- ------
Consideration 0.5
Less: Fair value of assets acquired (0.3)
------------------------------------- ------
Goodwill arising on acquisition 0.2
------------------------------------- ------
Impairment of goodwill -
------------------------------------- ------
Carrying value of goodwill 0.2
------------------------------------- ------
The consideration shown within the table above relates to both
consideration for the purchase of A-shares and cash settlement of
'A' shareholder Joint Venture Partner loans, which were repaid to
the 'A' shareholder at the point of acquisition.
The goodwill acquired on the purchase of the six Joint Venture
practices has been allocated to the Vet Group CGU.
In line with IFRS3, the right-of-use asset has been brought on
at a value equal to the lease liability, adjusted for any
unfavourable market conditions. These leases relate to standalone
veterinary practices.
In the 53 week period ended 31 March 2022, the Group acquired
100% of the 'A' shares of 11 veterinary practices, which were
previously accounted for as Joint Venture veterinary practices.
These practices were previously accounted for as Joint Venture
veterinary practices as the Group only held 100% of the
non-participatory 'B' ordinary shares, equating to 50% of the total
shares. Acquisition of the 'A' shares has led to the control and
consolidation of these practices. A detailed explanation for the
basis of consolidation can be found in note 1.4.
In the 53 week period ended 31 March 2022, GBP2.3m of operating
loans relating to these practices were written off in advance of
the acquisitions.
Subsidiaries acquired in the 53 week period ended 31 March
2022
Total proportion
Proportion of voting
of voting equity instruments Cash consideration
Principal equity instruments owned following transferred
activity Date of acquisition acquired the acquisition GBPm
-------------------- ----------- -------------------- ------------------- -------------------- ------------------
South Shields Quays Veterinary
Vets4Pets Limited practice 8 April 2021 50% 100% -
Companion Care
(Barnsley Veterinary
Cortonwood) Limited practice 29 April 2021 50% 100% -
Crewe Vets4Pets Veterinary
Limited practice 20 July 2021 50% 100% -
Lancaster Vets4Pets Veterinary 19 August
Limited practice 2021 50% 100% 0.9
Companion Care (Ely) Veterinary 13 September
Limited practice 2021 50% 100% 0.7
Kendal Vets4Pets Veterinary 29 October
Limited practice 2021 50% 100% -
Denbigh Vets4Pets Veterinary 15 November
Limited practice 2021 50% 100% -
Runcorn Vets4Pets Veterinary 20 December
Limited practice 2021 50% 100% -
Huddersfield
Vets4Pets Veterinary
Limited practice 16 March 2022 50% 100% -
Blackpool Warbreck Veterinary
Vets4Pets Limited practice 18 March 2022 50% 100% 0.5
Northwich Vets4Pets Veterinary
Limited practice 22 March 2022 50% 100% -
-------------------- ----------- -------------------- ------------------- -------------------- ------------------
Notes (forming part of the financial statements) continued
10 Business combinations (continued)
Assets acquired and liabilities recognised at the date of
acquisition
The amounts recognised in respect of identifiable assets and
liabilities relating to the acquisitions are as follows. The
acquisition disclosures have been combined as each acquisition is
considered to be individually immaterial to the Group.
Fair value
Book value of assets of assets and
and Adjustments liabilities
liabilities acquired on acquisition acquired
GBPm GBPm GBPm
---------------------------- ------------------------ --------------- --------------
Current assets
Cash and cash equivalents 0.7 - 0.7
Trade and other receivables 0.0 - 0.0
Inventories 0.1 - 0.1
Non-current assets
Tangible fixed assets 0.9 - 0.9
Right-of-use assets 0.8 - 0.8
Intangible assets - 0.7 0.7
Non-current liabilities
Lease liabilities (0.8) - (0.8)
Current liabilities
Bank loans (1.5) - (1.5)
Overdrafts (0.3) - (0.3)
Trade and other payables (3.2) - (3.2)
Net (liabilities)/assets (3.3) 0.7 (2.6)
------------------------------- --------------------- --------------- --------------
Goodwill arising on acquisition of veterinary practice
subsidiaries in 53 week period ended 31 March 2022
GBPm
------------------------------------- ------
Consideration 2.1
Less: Fair value of assets acquired 2.6
------------------------------------- ------
Goodwill arising on acquisition 4.7
------------------------------------- ------
Impairment of goodwill (3.7)
------------------------------------- ------
Carrying value of goodwill 1.0
------------------------------------- ------
The consideration shown within the table above relates to both
consideration for the purchase of A-shares and cash settlement of
'A' shareholder Joint Venture Partner loans, which were repaid to
the 'A' shareholder at the point of acquisition. The impairment of
goodwill relates to loss making practices.
In line with IFRS3, the right-of-use asset has been brought on
at value equal to the lease liability, adjusted for any
unfavourable market conditions. These leases relate to standalone
veterinary practices.
The goodwill acquired on the purchase of the 11 Joint Venture
practices has been allocated to the Vet Group CGU.
During the 52 week period ended 30 March 2023, the Group
invested GBP1.0m in Project Blu Ltd, a sustainable pet product
company, and acquired 8.7% of the shares.
During the 53 week period ended 31 March 2022, the Group
invested GBP0.0m in Dog Stay Limited. The Group's percentage stake
in Dog Stay Limited has remained unchanged at 12% following the
investment.
Notes (forming part of the financial statements) continued
11 Property, plant and equipment
Fixtures,
fittings,
Freehold Leasehold tools and Assets under
property improvements equipment construction Total
GBPm GBPm GBPm GBPm GBPm
------------------------- --------- ------------- ---------- ------------- -----
Cost
Balance at 31 March 2022 2.4 65.7 261.6 12.7 342.4
Additions - 11.7 34.5 19.1 65.3
On acquisition (note
10) - 0.2 0.1 - 0.3
Brought into use - 0.8 0.8 (1.6) -
Transfers(1) - - - (1.7) (1.7)
Disposals - (0.4) (0.6) - (1.0)
------------------------- --------- ------------- ---------- ------------- -----
Balance at 30 March
2023 2.4 78.0 296.4 28.5 405.3
------------------------- --------- ------------- ---------- ------------- -----
Depreciation
Balance at 31 March 2022 0.4 32.9 200.2 - 233.5
Depreciation charge for
the period 0.0 4.4 21.7 - 26.1
Disposals - (0.6) (0.6) - (1.2)
------------------------- --------- ------------- ---------- ------------- -----
Balance at 30 March
2023 0.4 36.7 221.3 - 258.4
------------------------- --------- ------------- ---------- ------------- -----
Net book value
At 31 March 2022 2.0 32.8 61.4 12.7 108.9
------------------------- --------- ------------- ---------- ------------- -----
At 30 March 2023 2.0 41.3 75.1 28.5 146.9
------------------------- --------- ------------- ---------- ------------- -----
(1) Included within the cost of assets under construction
brought forward at 31 March 2022 was GBP1.7m which related to
software assets under construction. These have been reallocated to
intangible assets as at 30 March 2023.
Fixtures,
fittings,
Freehold Leasehold tools and Assets under
property improvements equipment construction Total
GBPm GBPm GBPm GBPm GBPm
--------------------- --------- ------------- ---------- ------------- -----
Cost
Balance at 25 March
2021 2.4 62.4 245.3 - 310.1
Additions - 6.7 17.6 9.3 33.6
On acquisition (note
10) - 0.8 0.1 - 0.9
Transfers(1) - (3.4) - 3.4 -
Disposals - (0.8) (1.4) - (2.2)
--------------------- --------- ------------- ---------- ------------- -----
Balance at 31 March
2022 2.4 65.7 261.6 12.7 342.4
--------------------- --------- ------------- ---------- ------------- -----
Depreciation
Balance at 25 March
2021 0.3 29.4 180.8 - 210.5
Depreciation charge
for the period 0.1 4.1 21.2 - 25.4
Disposals - (0.6) (1.8) - (2.4)
--------------------- --------- ------------- ---------- ------------- -----
Balance at 31 March
2022 0.4 32.9 200.2 - 233.5
--------------------- --------- ------------- ---------- ------------- -----
Net book value
At 25 March 2021 2.1 33.0 64.5 - 99.6
--------------------- --------- ------------- ---------- ------------- -----
At 31 March 2022 2.0 32.8 61.4 12.7 108.9
--------------------- --------- ------------- ---------- ------------- -----
(1) Included within the cost of leasehold improvements brought
forward at 25 March 2021 was GBP3.4m which related to assets under
construction. These have been reallocated to assets under
construction as at 31 March 2022.
Notes (forming part of the financial statements) continued
12 Leases
As Lessee
Property, plant and equipment comprise owned and leased assets
that do not meet the definition of investment property.
The majority of the Group's trading stores, standalone
veterinary practices, Distribution Centres and Support Offices are
leased under operating leases with remaining lease terms of between
1 and 20 years. The Group also has a number of non-property
operating leases relating to vehicle, equipment and material
handling equipment with remaining lease terms of between 1 and 6
years.
Right-of-use assets
Property Equipment Total
GBPm GBPm GBPm
----------------------------------- -------- --------- -----
Cost
Balance at 31 March 2022 531.6 16.6 548.2
Additions 83.4 4.0 87.4
Cost reallocation(1) (0.2) - (0.2)
Disposals - (0.3) (0.3)
Balance at 30 March 2023 614.8 20.3 635.1
----------------------------------- -------- --------- -----
Depreciation
Balance at 31 March 2022 199.2 8.9 208.1
Depreciation charge for the period 64.1 3.4 67.5
Cost reallocation(1) 0.2 - 0.2
Disposals - (0.3) (0.3)
Balance at 30 March 2023 263.5 12.0 275.5
----------------------------------- -------- --------- -----
Net book value
At 31 March 2022 332.4 7.7 340.1
----------------------------------- -------- --------- -----
At 30 March 2023 351.3 8.3 359.6
----------------------------------- -------- --------- -----
(1) Included within the cost of property right-of use assets
brought forward at 31 March 2022 was GBP0.2m which related to
accumulated amortisation. This has been reallocated to accumulated
amortisation and has no impact on net book value.
The costs relating to leases for which the Group applied the
practical expedient described in paragraph 5a of IFRS16 (leases
with a contract term of less than 12 months) amounted to GBP0.1m in
the 52 week period ended 30 March 2023.
Property Equipment Total
GBPm GBPm GBPm
----------------------------------- -------- --------- -----
Cost
Balance at 25 March 2021 493.5 14.7 508.2
Additions 37.6 2.9 40.5
On acquisition (note 10) 0.8 - 0.8
Disposals (0.3) (1.0) (1.3)
Balance at 31 March 2022 531.6 16.6 548.2
----------------------------------- -------- --------- -----
Depreciation
Balance at 25 March 2021 132.8 6.7 139.5
Depreciation charge for the period 66.5 3.2 69.7
Disposals (0.1) (1.0) (1.1)
Balance at 31 March 2022 199.2 8.9 208.1
----------------------------------- -------- --------- -----
Net book value
At 25 March 2021 360.7 8.0 368.7
----------------------------------- -------- --------- -----
At 31 March 2022 332.4 7.7 340.1
----------------------------------- -------- --------- -----
The costs relating to leases for which the Group applied the
practical expedient described in paragraph 5a of IFRS16 (leases
with a contract term of less than 12 months) amounted to GBP0.1m in
the 53 week period ended 31 March 2022.
Notes (forming part of the financial statements) continued
12 Leases (continued)
The following table sets out the maturity analysis of lease
payments, showing the undiscounted lease payments to be paid after
the reporting date:
Maturity analysis - contractual undiscounted cash flows
At 31 March
At 30 March 2023 2022
GBPm GBPm
--------------------------------------------- ---------------- ------------
Less than one year 83.3 78.3
Between one and three years 145.3 137.9
Between three and five years 99.5 99.0
Between five and ten years 103.9 94.3
More than ten years 59.4 13.8
Total undiscounted lease liabilities 491.4 423.3
--------------------------------------------- ---------------- ------------
Carrying value of lease liabilities included
in the statement of financial position 421.4 383.0
Current 83.3 78.3
Non-current 338.1 304.7
--------------------------------------------- ---------------- ------------
For the lease liabilities at 30 March 2023 a 0.1% change in the
discount rate used would have increased the carrying value of lease
liabilities by GBP1.8m (31 March 2022: GBP1.4m).
Following increases in Bank of England interest rates in the 52
week period ended 30 March 2023, the Group has reviewed and
subsequently revised the interest rates implicit in new leases and
lease extensions in line with IFRS 16. The revised rates used are
between 4.8% and 5.4 % and vary according to the length of the
lease.
Surplus leases
The Group has a small number of leases on properties from which
it no longer trades. A small number of these properties are
currently vacant or the sublet is not for the full term of the
lease and there is deemed to be a risk on the sublet. These leases
are included within the lease balances disclosed on the face of the
balance sheet and a related provision has been made for other
property costs relating to these properties.
Short term leases
The Group has a small number of leases on properties from which
it no longer trades, or a subsection of a trading retail store.
These properties are sublet to third parties at contracted
rates.
In line with IAS36, the carrying value of the right-of-use asset
will be assessed for indicators of impairment and an impairment
charge will be recognised if necessary. An onerous lease provision
was recognised where management believed there was a risk of
default or where the property remained vacant for a period of time.
As part of this review the Group has assessed the ability to
sub-lease the property and the right-of-use asset has been written
down to GBPnil where the Group does not consider a sublease
likely.
13 Intangible assets
Customer
lists and Software
Goodwill 'know-how' Software under construction Total
GBPm GBPm GBPm GBPm GBPm
---------------------------------- --------- ----------- -------- ------------------- ---------
Cost
Balance at 31 March 2022 959.1 6.7 68.3 - 1,034.1
Additions - - 5.5 4.5 10.0
On acquisition (note 10) 0.2 0.4 - - 0.6
Transfers(1) - - (4.0) 5.7 1.7
Brought into use - - 1.9 (1.9) -
Disposals - (0.1) - - (0.1)
Balance at 30 March 2023 959.3 7.0 71.7 8.3 1,046.3
----------------------------------- -------- ----------- -------- ------------------- ---------
Amortisation
Balance at 31 March 2022 0.1 1.0 45.9 - 47.0
Amortisation charge for the period - 0.7 9.1 - 9.8
Balance at 30 March 2023 0.1 1.7 55.0 - 56.8
----------------------------------- -------- ----------- -------- ------------------- ---------
Net book value
At 31 March 2022 959.0 5.7 22.4 - 987.1
----------------------------------- -------- ----------- -------- ------------------- ---------
At 30 March 2023 959.2 5.3 16.7 8.3 989.5
----------------------------------- -------- ----------- -------- ------------------- ---------
(1) Included within the cost of assets under construction in
fixed assets brought forward at 31 March 2022 was GBP1.7m which
related to software assets under construction. These have been
reallocated to intangible assets as at 30 March 2023. A further
GBP4.0m of software assets under construction were classified as
software assets in use at 31 March 2022. These have been
reallocated to software assets under construction.
Notes (forming part of the financial statements) continued
13 Intangible assets (continued)
Customer
lists and
Goodwill 'know-how' Software Total
GBPm GBPm GBPm GBPm
----------------------------------- -------- ----------- -------- -------
Cost
Balance at 25 March 2021 958.5 6.2 55.7 1,020.4
Additions - - 15.5 15.5
On acquisition (note 10) 1.0 0.7 - 1.7
Disposals (0.4) (0.2) (2.9) (3.5)
Balance at 31 March 2022 959.1 6.7 68.3 1,034.1
----------------------------------- -------- ----------- -------- -------
Amortisation
Balance at 25 March 2021 0.1 0.4 40.4 40.9
Amortisation charge for the period - 0.7 8.1 8.8
Disposals - (0.1) (2.6) (2.7)
----------------------------------- -------- ----------- -------- -------
Balance at 31 March 2022 0.1 1.0 45.9 47.0
----------------------------------- -------- ----------- -------- -------
Net book value
At 25 March 2021 958.4 5.8 15.3 979.5
----------------------------------- -------- ----------- -------- -------
At 31 March 2022 959.0 5.7 22.4 987.1
----------------------------------- -------- ----------- -------- -------
Impairment testing
Cash generating units ('CGUs'), as defined by IAS36, within the
Group are considered to be aligned to three operating segments as
shown in the table below. Within the Retail operating segment, the
CGU comprises the body of stores, online operations, grooming
operations and insurance operations. Within the Vet Group operating
segment, the CGU comprises the General Practice veterinary
practices. The veterinary telehealth business, hereafter disclosed
as The Vet Connection (TVC) CGU, forms part of the Central
operating segment. Revenue and costs are allocated to a segment and
CGU where reasonably possible.
As at 30 March 2023 and 31 March 2022, the Group is deemed to
have CGUs as follows:
Goodwill
---------- ------------------------
At 30 March At 31 March
2023 2022
GBPm GBPm
---------- ----------- -----------
Retail 586.1 586.1
TVC 11.1 11.1
Vet Group 362.0 361.8
---------- ----------- -----------
Total 959.2 959.0
---------- ----------- -----------
The recoverable amount of the CGU has been calculated with
reference to its value in use. The key assumptions of this
calculation are shown below:
52 week period 53 week period
ended ended
30 March 2023 31 March 2022
---------------------------------------------- ------------------------- ----- ----------------
Vet Vet
Retail Group TVC Retail Group TVC
---------------------------------------------- ------ ------ ----- --------- ------- -------
Period on which management approved forecasts
are based (years) 5 5 5 5 5 5
Growth rate applied beyond approved forecast
period 2.0% 3.5% 2.0% 2.0% 3.5% 2.0%
Discount rate (pre-tax) 12% 11% 11% 11% 11% 11%
Like-for-like sales growth 8% 10% 34% 7% 10% 35%
Gross profit margin (average over next
5 years) 46% 61% 61% 48% 63% 59%
---------------------------------------------- ------ ------ ----- --------- ------- -------
The goodwill is considered to have an indefinite useful economic
life and the recoverable amount is determined based on
'value-in-use' calculations. These calculations use a post-tax cash
flow projection based on a five-year plan approved by the Board.
For the purposes of intangible asset impairment testing, the model
removes all cash flows associated with business units (for example
stores or practices yet to open, but within the planning horizon)
which the Group has a strategic intention to invest capital in, but
has not yet done so, thus ensuring that the future cash flows used
in modelling for impairment exclude any cash flows where the
investment is yet to take place, in accordance with the
requirements of IAS36 to exclude capital expenditure to improve
asset performance. Contributions from and costs associated with new
stores and veterinary practices which are already operational at
the impairment test date are included in the cash flows. The Group
reviews components within CGUs such as stores and veterinary
practices for indicators of impairment. This approach is consistent
with impairment reviews carried out in the 2022 financial
statements.
Notes (forming part of the financial statements) continued
13 Intangible assets (continued)
Impairment testing (continued)
The key assumptions in the business plans for the Retail, Vet
Group and TVC CGUs are like-for-like sales growth and gross profit
margin. The Retail forecast assumptions reflect continual
innovation and our deep understanding of our customers,
incorporating assumptions based on past experience of the industry,
products and markets in which the CGU operates, in order to
generate the detailed assumptions used in the annual budget setting
process, and five year strategic planning process. The Vet Group
forecast assumptions are based on a deep understanding of the
maturity profile of the practices and their performance,
incorporating assumptions based on past experience of the industry,
services and markets in which the CGU operates in order to generate
the detailed assumptions used in the annual budget setting process,
and five year strategic planning process. The TVC forecast
assumptions are based on building on the linkages between the three
operating segments and increasing the Group's service offering.
These linkages are embedded in the revenue growth assumption as a
result of offering online veterinary consultations as an additional
service to Joint Venture veterinary practices. The projections are
based on all available information and growth rates do not exceed
growth rates experienced in prior periods. A different set of
assumptions may be more appropriate in future years depending on
changes in the macro-economic environment and the industry in which
each CGU operates. The Group has considered the impact of climate
change and in particular the risks identified in the Task Force on
Climate Related Financial Disclosures ('TCFD') scenario analysis
conducted in undertaking this assessment.
The discount rate was estimated based on past experience and a
market participant weighted average cost of capital. A post tax
discount rate was used within the value in use calculation and
adjustments made to calculate the pre-tax discount rate which is
disclosed above in line with IAS36 requirements.
The Directors have assumed a growth rate projection beyond the
five-year period based on market growth rates based on past
experience within the Group, taking into account the economic
growth forecasts within the relevant industries. The long-term
growth rate in the Vet Group and TVC CGUs exceed the long-term
average for the UK but is an appropriate rate due to the growth in
the petcare industry.
The total recoverable amount in respect of goodwill for the CGU
group as assessed by the Directors using the above assumptions is
greater than the carrying amount and therefore no impairment charge
has been recorded in each period.
Within the Retail, Vet Group and TVC CGUs, a number of
sensitivities have been applied to the assumptions in reaching this
conclusion including:
Reduction in growth rate applied beyond forecast period by 100
bps
Increasing the discount rate by 100 bps
Reduction in gross margin percentage of 100 bps
None of the above, considered reasonably possible changes in
assumptions, would result in impairment when applied either
individually or collectively.
The Directors consider that it is not reasonably possible for
the assumptions to change so significantly as to eliminate the
excess of the recoverable amount over the carrying value.
14 Inventories
At 30 March At 31 March
2023 GBPm 2022 GBPm
--------------- ----------- -----------
Finished goods 108.6 84.5
--------------- ----------- -----------
The cost of inventories recognised as an expense and included in
'cost of sales' is GBP642.6m (53 week period ended 31 March 2022:
GBP585.3m).
Inventory expensed to cost of sales includes the cost of the
Stock Keeping Units ('SKUs') sold, supplier income, stock wastage
and foreign exchange variances.
At 30 March 2023 the inventory provision amounted to GBP4.0m (31
March 2022: GBP3.9m). The inventory provision is calculated by
reference to the age of the SKU and the length of time it is
expected to take to sell. The provision percentages applied in
calculating the provision are as follows:
-- Discontinued stock greater than 365 days: 100%
-- Current stock greater than 365 days with a use by date: 50%
-- Current stock within 180 and 365 days with a use by date: 25%
-- Greater than 180 days with no use by date: 25%
In addition, a provision is held to account for store stock
losses during the period since which the SKU was last counted.
The value of inventory against which an ageing provision is held
is GBP8.4m (31 March 2022: GBP10.3m).
In the 52 week period ended 30 March 2023, the value of
inventory written off to the income statement amounted to GBP9.6m
(53 week period ended 31 March 2022: GBP7.6m).
Notes (forming part of the financial statements) continued
15 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the
following:
At 30 March 2023 At 31 March 2022
-------------------------------------- -------------------------- --------------------------
Assets Liabilities Total Assets Liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Property, plant and equipment - (2.2) (2.2) 1.9 - 1.9
Financial assets 1.0 - 1.0 (0.0) - (0.0)
Financial liabilities - (0.5) (0.5) - (0.8) (0.8)
Other short term timing
differences 3.4 (0.9) 2.5 0.9 (4.0) (3.1)
Share based payments 1.1 - 1.1 3.1 - 3.1
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Net deferred tax assets/(liabilities) 5.5 (3.6) 1.9 5.9 (4.8) 1.1
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Movement in deferred tax during the period
31 March Recognised Recognised 30 March
2022 in income in equity 2023
GBPm GBPm GBPm GBPm
Property, plant and equipment 1.9 (4.1) - (2.2)
Net financial assets/(liabilities) (0.8) - 1.3 0.5
Other short term timing differences (3.1) 5.6 - 2.5
Share based payments 3.1 - (2.0) 1.1
1.1 1.5 (0.7) 1.9
Other short-term timing differences primarily relate to
inventory provisions.
Movement in deferred tax during the prior period
25 March Recognised Recognised 31 March
2021 in income in equity 2022
GBPm GBPm GBPm GBPm
Property, plant and equipment 3.5 (1.6) - 1.9
Net financial assets/(liabilities) 0.4 - (1.2) (0.8)
Other short-term timing differences (3.5) 0.4 - (3.1)
Share based payments 3.4 - (0.3) 3.1
3.8 (1.2) (1.5) 1.1
Company
Movement in deferred tax during the period
31 March Recognised Recognised 30 March
2022 in income in equity 2023
GBPm GBPm GBPm GBPm
---------- --------
Net financial liabilities (0.3) - (0.1) (0.4)
Other short term timing differences - 2.1 - 2.1
Share based payments 3.1 - (2.0) 1.1
---------- --------
2.8 2.1 (2.1) 2.8
---------- --------
The rate used to calculate deferred tax assets and liabilities
is 25% based on the rate at which the majority of items are
expected to reverse.
Movement in deferred tax during the period
25 March Recognised Recognised 31 March
2021 in income in equity 2022
GBPm GBPm GBPm GBPm
---------- --------
Net financial assets/(liabilities) 0.3 - (0.6) (0.3)
Share based payments 3.4 - (0.3) 3.1
---------- --------
3.7 - (0.9) 2.8
---------- --------
The rate used to calculate deferred tax assets and liabilities
is 22% based on a blended rate at which the majority of items are
expected to reverse.
Notes (forming part of the financial statements) continued
16 Other financial assets and liabilities
Group Company
At 30 March At 31 March At 30 March At 31 March
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
----------- ----------- ----------- -----------
Non-current assets
Investments in Joint Venture veterinary
practices 0.4 0.2 - -
Loans to Joint Venture veterinary
practices - initial set up loans 6.6 8.6 - -
Loans to Joint Venture veterinary
practices - other loans 1.2 2.1 - -
Other investments 2.1 1.1 - -
Other receivables 0.6 0.5 - -
Interest rate swaps - 1.6 - 1.6
Fuel forward contracts - 0.0 - -
10.9 14.1 - 1.6
Investments in Joint Venture veterinary practices
Investments represent GBP0.4m (2022: GBP0.2m) of the 'B' share
capital in Joint Venture veterinary practice companies. These
investments are held at cost less impairment. The fair values of
investments in unlisted equity securities are considered to be
their carrying value as the impact of discounting future cash flows
has been assessed as not material and the investment is
non-participatory. The share capital of the veterinary practice
companies is split equally into 'A' ordinary shares (held by Joint
Venture Partners) and 'B' ordinary shares (held by the Group). Any
operational decisions require the agreement of the Joint Venture
Partner.
Under the terms of the agreements, the Group ('B' shareholder)
is not entitled to any profits, losses or dividends, or any surplus
on winding up or disposal, although it is entitled to appoint
Directors to the Board and carry the same shareholder voting rights
as 'A' ordinary shareholders.
The agreements entitle the Group to receive income in relation
to support services offered in such areas as clinical development,
promotion and methods of operation as well as service activities
including accountancy, legal and property.
Loans to Joint Venture veterinary practices - initial set up
loans
Loans to Joint Venture veterinary practices of GBP6.6m (2022:
GBP8.6m) are provided to Joint Venture veterinary practice
companies trading under the Companion Care and Vets4Pets brands, in
which the Group's share interest is non-participatory. These loans
represent a long-term investment in the Joint Venture, supporting
their initial set up and working capital, and are held at amortised
cost under IFRS9. The carrying value is cost as the impact of
discounting future cash flows at a market rate of interest has been
assessed as not material. Under the terms of the loans provided to
veterinary companies trading under the Companion Care and Vets4Pets
brands the loans attract varying interest rates between 2% and 3%.
There is no set date for repayment of the loans due to the
Group.
The balances are shown net of an expected credit loss ('ECL') of
GBP1.0m (2022: GBP1.2m).
Gross Carrying
loan Expected value of
value credit loss loan
GBPm GBPm GBPm
As at 31 March 2022 9.8 (1.2) 8.6
Net repayment and further advances (2.2) - (2.2)
Provisions utilised during the period - 0.2 0.2
------ ---------
As at 30 March 2023 7.6 (1.0) 6,6
------ ---------
Analysis of expected credit loss by risk category
The following table presents an analysis of the credit risk and
credit impairment of initial set up loans held at amortised cost.
The loans are categorised as performing, significant increase in
credit risk or in default in accordance with the policy set out in
note 1.16. The loss allowance is calculated depending on the credit
risk of each loan, the Group's expectations of future cash flow
recoverability and practice age in accordance with the policy set
out in note 1.16.
Credit risk At 30
March At 31 March
2023 2022
GBPm GBPm
Performing 6.6 8.1
Significant increase in
credit risk 1.0 1.7
Gross carrying amount 7.6 9.8
Loss allowance (1.0) (1.2)
Net carrying amount 6.6 8.6
Notes (forming part of the financial statements) continued
16 Other financial assets and liabilities (continued)
Loans to Joint Venture veterinary practices - other loans
Loans to Joint Venture veterinary practices - other loans of
GBP1.2m (2022: GBP2.1m) represent loan balances to Joint Venture
veterinary practices. These loans are unsecured, typically for five
to seven years and attract an interest rate of SONIA plus 2.8%. The
loans are accounted for at amortised cost under IFRS9. The carrying
value is considered to be cost as the impact of discounting future
cash flows at a market rate of interest has been assessed as not
material. The loans are typically to support capacity expansion.
The balances have been assessed under the criteria in note 1.16 as
fully performing. Any expected credit losses are immaterial (2022:
GBPnil).
Gross Expected Carrying
loan credit value of
value loss loan
GBPm GBPm GBPm
As at 31 March 2022 2.1 - 2.1
Net repayment and further advances (0.9) - (0.9)
Provisions made during the period - - -
---------
As at 30 March 2023 1.2 - 1.2
---------
Other investments
Other investments are held at fair value through other
comprehensive income ('FVOCI'). The fair values of investments in
unlisted equity securities are considered to be their carrying
value as the impact of discounting future cash flows has been
assessed as not material and the investment is
non-participatory.
Group Company
At 30 March At 31 March At 30 March At 31 March
Other financial assets 2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
-----------
Non-current assets
Interest rate swaps - 1.6 - 1.6
- 1.6 - 1.6
Group Company
At 30 March At 31 March At 30 March At 31 March
Other financial assets 2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
-----------
Current assets
Fuel forward contracts - 0.5 - -
Interest rate swaps 2.0 - 2.0 -
Forward exchange contracts - 2.2 - -
Other receivables 0.2 0.3 - -
2.2 3.0 2.0 -
Group Company
At 30 March At 30 March
2023 At 31 March 2023 At 31 March
Other financial liabilities GBPm 2022 GBPm GBPm 2022 GBPm
-----------
Current liabilities
Fuel forward contracts (0.3) - - -
Forward exchange contracts (3.4) (0.0) - -
(3.7) (0.0) - -
Group Company
At 30 March At 30 March
2023 At 31 March 2023 At 31 March
GBPm 2022 GBPm GBPm 2022 GBPm
Non-current liabilities
Interest rate swaps (0.4) - (0.4) -
(0.4) - (0.4) -
Notes (forming part of the financial statements) continued
17 Trade and other receivables
Group Company
At 30 March At 31 March At 30 March At 31 March
2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
Current assets
Trade receivables 13.5 14.9 - -
Amounts owed by Joint Venture veterinary
practices - operating loans 10.4 15.2 - -
Amounts owed by Joint Venture veterinary
practices - trading balances 11.5 - - -
Other receivables 5.7 13.1 - -
Prepayments 3.4 1.7 - -
Accrued income 7.3 8.8 - -
Non-current assets
Amounts owed by Group undertakings - - 578.4 600.2
51.8 53.7 578.4 600.2
----------- -----------
Trade and other receivables
The impairment of trade and other receivables is assessed in
line with IFRS9. As at 30 March 2023 and 31 March 2022 the impact
of expected credit loss on these balances was deemed to be
immaterial and as such no provision has been made.
The Group apply the simplified approach under IFRS9 and default
to lifetime expected credit loss. The ECL is immaterial on the
trade receivables balance for the 52 week period ended 30 March
2023 (53 week period ended 31 March 2022: GBPnil).
Amounts owed by Joint Venture veterinary practices
Amounts owed by Joint Venture veterinary practices represent
trading balances and operating loans owed by J oint Venture
veterinary practices to the Group.
The impairment of amounts owed by Joint Venture Veterinary
practices relating to trading balances are assessed in line with
IFRS 9. As at 30 March 2023 and 31 March 2022, the impact of
expected credit loss on these balances was deemed to be immaterial
due to the short term nature of these balances and as such no
provision has been made.
Operating loans are provided on a short-term monthly cycle to
the extent that a practice requires additional funding above their
external bank loan. Practices generate cash on a monthly basis
which is applied to the repayment of brought forward operating
loans. For immature practices, loan balances may increase due to
operating requirements. Based on a projected cash flow forecast on
a practice by practice basis, the funding is expected to be
required for a number of years, however as cash is applied against
opening loan balances, the Group's expectation is that the brought
forward balance will be repaid in cash within 12 months. The loans
have been classified as current on this basis and the Group has
chosen not to charge interest on these balances, and they are
initially recognised under IFRS9 at their nominal value as the
effect of discounting the expected cash flows based on the
effective interest rate at the market rate of interest is not
material. The loans advanced to the practices are interest free and
either repayable on demand or repayable within 90 days of demand.
No facility exists and the levels of loans are monitored in
relation to review of the practices' performance against business
plan and a number of financial and non-financial KPIs in accordance
with the policy set out in note 1.16.
For those practices in default, a credit impairment charge is
recognised under IFRS9 taking into account the Group's expectations
of future cash flow recoverability. For other practices, a credit
impairment charge is recognised under IFRS9, taking into account
both the probability of loss and the loss proportion given
default.
The balances above are shown net of allowances for expected
credit losses held for operating loans of GBP3.4m (2022: GBP5.0m).
The basis for this allowance and the movement in the period is set
out below.
Group
Expected Carrying
Gross loan credit value of
value loss loan
GBPm GBPm GBPm
As at 31 March 2022 20.2 (5.0) 15.2
Loans written off (2.0) - (2.0)
Net repayment and further advances (4.4) - (4.4)
Utilisation of provision - 1.3 1.3
Release of impairment recognised during the period - 0.3 0.3
As at 30 March 2023 13.8 (3.4) 10.4
During the 52 week period ended 30 March 2023, GBP2.0m of
operating loans which were deemed to be in default were written off
in advance of the acquisition of the 'A' shares (53 week period
ended 31 March 2022: GBP2.3m) which led to the control and
consolidation of these practices. Further details of these
acquisitions are provided in note 10.
The Group holds expected credit losses of GBP3.4m against
operating loans of GBP13.8m (31 March 2022: ECLs of GBP5.0m against
operating loans of GBP20.2m). The movements are shown in the table
above. The Group continues to work with a number of Joint Venture
Partners, where the partners choose to follow the Group's
recommendations on remediation plans aimed at improving practice
performance. Further details regarding credit risk are provided in
note 1.16.
Notes (forming part of the financial statements) continued
17 Trade and other receivables (continued)
The following table presents an analysis of the credit risk and
credit impairment of operating loans held at amortised cost. Based
on their future cashflow forecast, loans are categorised as
performing or in default. The loss allowance is calculated in
accordance with the policy set out in note 1.16, depending on the
credit risk of each loan.
Credit risk At 31 March
At 30 March 2023 2022
GBPm GBPm
Performing 9.1 9.5
In default 4.7 10.7
Gross carrying amount 13.8 20.2
Loss allowance (3.4) (5.0)
Net carrying amount 10.4 15.2
Should forecast cash flows, as defined by the risk criteria in
note 1.16, decrease by 0.5% over the 10-year time horizon, this
would lead to an increase in the required provision for operating
loans of GBP0.8m (31 March 2022: GBP1.2m). This sensitivity is
considered by management to represent a reasonably possible range
of estimation uncertainty, based on the variance in current trading
performance within these Joint Venture veterinary practices. The
factors which give rise to the estimation uncertainty include
macro-economic and industry specific factors, including the level
of industry growth, as well as gross margin percentages achieved
within the industry, which contain a number of factors including
the availability of suitably qualified veterinary personnel.
Further details are provided in note 27.
Accrued income
Accrued income relates to income in relation to fees to Joint
Venture veterinary practices and overrider and promotional income
from suppliers which have not yet been invoiced . Accrued income is
classified as current as it is expected to be invoiced and received
within 12 months of the period end date. Supplier income is
recognised on an accruals basis, based on the expected entitlement
that has been earned up to the balance sheet date for each relevant
supplier contract. As detailed in note 1.19, supplier income is
recognised as a credit within gross margin to cost of sales and is
outside of the scope of IFRS15 and therefore a contract asset has
not been separately recognised. Further detail of the Group's
revenue recognition policy is provided in note 1.19.
Company
Amounts owed by Group undertakings
Amounts owed by Group undertakings are repayable on demand
bearing no interest but there is no valid expectation that it will
be settled within the next 12 months.
18 Cash and cash equivalents
Group Company
At 30 March At 31 March At 30 March At 31 March
2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
-----------
Cash and cash equivalents 178.0 166.0 0.4 -
----------- -----------
19 Other interest-bearing loans and borrowings
Group Company
At 30 March At 31 March At 30 March At 31 March
2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
----------- -----------
Non-current liabilities
Unsecured bank loans 97.3 96.9 97.3 96.9
Asset backed loans 22.0 - - -
----------- -----------
Total 119.3 96.9 97.3 96.9
----------- -----------
Group Company
At 30 March At 31 March At 30 March At 31 March
2023 GBPm 2022 GBPm 2023 GBPm 2022 GBPm
----------- ----------- -------------
Current liabilities
Asset backed loans 1.2 - - -
-----------
Terms and debt repayment schedule
Face
value Carrying Face value Carrying
at 30 amount at 31 amount
Nominal March at 30 March March at 31 March
interest Year of 2023 2023 2022 2022
Currency rate maturity GBPm GBPm GBPm GBPm
--------- ------------ ---------- ------------
Revolving credit
facility GBP SONIA +1.35% 2027 100.0 97.3 100.0 96.9
SONIA +
Asset backed loan GBP 1.50% 2030 23.3 23.2 - -
--------- ------ ------------ ---------- ------------
Notes (forming part of the financial statements) continued
19 Other interest-bearing loans and borrowings (continued)
The drawn amount on the GBP300.0m revolving credit facility was
GBP100.0m at 30 March 2023 (drawn amount on the GBP300m revolving
credit facility was GBP100.0m at 31 March 2022) and this amount is
reviewed each month. Interest is charged at SONIA plus a margin
based on leverage on a pre-IFRS16 basis (net debt: EBITDA). The
loan also has ESG linked metrics which will be reflected in the
margin payable, which is +/- 5bps. Face value represents the
principal value of the revolving credit facility. The facility is
unsecured.
On 27 March 2023, the Group entered into a loan agreement to
fund the purchase of capital items. The drawn amount on the GBP26m
facility at 30 March 2023 was GBP23.3m. Interest is charged on the
amount drawn at SONIA plus 1.5%. The Group will make monthly
repayments until the loan matures on 27 March 2030. The repayments
do not begin until the full facility has been drawn.
Interest-bearing borrowings are recognised initially at fair
value, being the principal value of the loan net of attributable
transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at a carrying value, which
represents the amortised cost of the loans using the effective
interest method.
The analysis of repayments on the loans is as follows:
At 30 March At 31 March
2023 2022
GBPm GBPm
--------------------------------------- -----------
Within one year or repayable on demand 1.2 -
Between one and two years 3.7 -
Between two and five years 111.2 100.0
Greater than five years 7.2 -
----------- -----------
123.3 100.0
----------- -----------
The GBP100m revolving credit facility at 30 March 2023 is held
by the Company. The GBP23.3m of asset backed loan are held by Pets
at Home Limited, a 100% owned subsidiary company.
The Group's policy with regard to interest rate risk is to hedge
the appropriate level of borrowings by entering into fixed rate
agreements. The Group has fixed interest rate swap agreements over
a total of GBP100.0m of the senior facility borrowings at the
balance sheet date at a blended fixed rate of 0.811% which expire
on 25 September 2023. From 25 September 2023 the Group has new
fixed interest rate swap agreements covering GBP50.0m of senior
facility borrowing at a blended fixed rate of 5.058%.
The hedges are structured to hedge at least 70% of the forecast
outstanding debt for the next 12 months.
Analysis of changes in net debt
At
At Non-cash 30 March
31 March Cash flow movement 2023
2022 GBPm GBPm GBPm GBPm
--------------------------------------- ---------- --------- --------- ---------
Cash and cash equivalents 166.0 12.0 - 178.0
Debt due within one year at face value - (1.2) - (1.2)
Debt due after one year at face value (100.0) (22.1) - (122.1)
--------------------------------------- ---------- --------- --------- ---------
Net debt 66.0 (11.3) - 54.7
--------------------------------------- ---------- --------- --------- ---------
20 Trade and other payables
Group Company
At 30 March At 31 March At 30 March
2023 2022 2023 At 31 March
GBPm GBPm GBPm 2022 GBPm
Current
Trade payables 155.5 118.5 - -
Accruals and deferred income 68.5 62.8 1.5 0.4
Amounts owed to Joint Venture veterinary
practices 4.5 9.2 - -
Other payables including tax and
social security 33.0 34.3 - -
Amounts owed to Group undertakings - - 616.5 552.5
261.5 224.8 618.0 552.9
Amounts owed to Joint Venture veterinary practices that relate
to trading balances are interest free and repayable on demand.
Within accruals and deferred income above, contract liabilities
under IFRS15 of GBP0.5m (2022: GBP0.7m) relate to advanced
consideration received from customers in relation to gift vouchers,
cards and points redeemable by charities. This revenue will be
recognised as the vouchers, cards and points are redeemed, which is
expected to be over the next two years.
Within accruals above, contract liabilities under IFRS15 of
GBP1.9m (2022: GBP1.6m) relate to advanced consideration received
from customers in relation to online orders which have not yet been
delivered. This revenue will be recognised as the online orders are
delivered to customers, which is expected to be in less than one
week from the balance sheet date.
Notes (forming part of the financial statements) continued
21 Provisions
Provisions
for exit Provision
and closure for exit
costs relating and closure
to Joint costs relating
Venture to existing
Dilapidation Closed stores veterinary Distribution
provision provision practices Centres Total
GBPm GBPm GBPm GBPm GBPm
Balance at 31 March 2022 7.9 1.3 4.0 - 13.2
Provisions made during
the period 1.6 - 0.6 3.7 5.9
Provisions utilised during
the period (0.3) (0.1) (1.9) - (2.3)
Provisions reclassified - (0.5) 0.5 - -
Balance at 30 March 2023 9.2 0.7 3.2 3.7 16.8
At 30 March At 31 March
2023 GBPm 2022 GBPm
Current 3.9 6.5
Non-current 12.9 6.7
-----------
16.8 13.2
-----------
As a result of the planned closure of the existing Distribution
Centres, at 30 March 2023, the Group has a provision of GBP2.0m for
voluntary redundancies for colleagues employed at those sites. The
Group also holds a provision of GBP1.7m for retention bonuses
payable to colleagues at the existing Distribution Centres provided
they remain employed by the Group until the sites close. Further
information is provided in note 3.
The closed stores provision relates to the rates, service charge
and utilities payable on vacant stores. The timing of the
utilisation of these provisions is variable dependent upon the
lease expiry dates of the properties concerned, which vary between
one and three years. Market conditions have a significant impact
and hence the assumptions on future cash flows are reviewed
regularly and revisions to the provision made where necessary.
The dilapidations provision relates to the expected cost of
repairs on leased properties at future lease expiry dates. The
timing of the utilisation of these provisions is variable depending
on the expiry dates of the property leases concerned.
The provision is discounted in line with the discount rates used
to calculate the value of a right-of-use asset. A decrease in this
rate of 100 bps would increase the provision by GBP0.0m.
The provisions for exit and closure costs relating to Joint
Venture veterinary practices relate to expenses for any Joint
Venture veterinary practices that the Group has bought out or has
offered to buy out from Joint Venture Partners, and therefore which
have been provided for under IAS37. The timing of the utilisation
of these provisions is variable dependent upon the lease expiry
dates of the properties concerned, which vary between 3 and 14
years. Market conditions have a significant impact and hence the
assumptions on future cash flows are reviewed regularly and
revisions to the provision made where necessary.
22 Capital and reserves
Share capital
Group
Share capital Share capital
Number GBPm
----------------- ------------- -------------
At 25 March 2021 500,000,000 5.0
At 31 March 2022 500,000,000 5.0
At 30 March 2023 483,197,785 4.8
------------- -------------
Company
Share
capital
30 March
2023
GBPm
---------
At beginning of period 5.0
Nominal value of shares cancelled in year following purchase
by the Group (0.2)
On issue at period end - authorised 4.8
---------
In the 52 week period ended 30 March 2023, the Company bought
back and cancelled 16,802,215 ordinary shares for total
consideration including stamp duty of GBP50.3m, at an average
market value of 298 pence per share.
Share capital
31 March
2022
GBPm
-------------
At beginning of period 5.0
On issue at period end - authorised 5.0
-------------
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
Notes (forming part of the financial statements) continued
22 Capital and reserves (continued)
Consolidation and Merger reserves
The consolidation reserve and the merger reserve arose as a
result of the creation of Pets at Home Group Plc and its purchase
of the existing group of companies as part of the Initial Public
Offering in 2014. As part of the IPO, a number of shares in Plc
were issued in exchange for various instruments or cash. The
premium arising on the issue was allocated between the share
premium and merger reserve. A consolidation reserve was also
created which reflected the difference between Plc reserves and the
consolidated equity of PAH Lux S.a.r.l as part of the IPO in
2014.
Capital redemption reserve
The capital redemption reserve comprised the par value of the
16.8m shares purchased and cancelled as part of the share buyback
programme completed in the 52 week period ended 30 March 2023.
Translation reserve
The translation reserve comprises all foreign exchange
differences arising since 21 November 2011, the date of
incorporation of Pets at Home Asia Ltd where the functional
currency differs from that of the rest of the Group.
Cash flow hedging reserve
The cash flow hedging reserve comprises the effective portion of
the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet
occurred.
Retained earnings
Included within the Group is Pets at Home Employee Benefit Trust
(EBT). The EBT purchases shares to fund the share option schemes.
As at 30 March 2023, the EBT held 5,766,243 ordinary shares (31
March 2022: 3,363,989) with a cost of GBP19,546,982 (2022:
GBP12,833,137). The average market value of these shares as at 30
March 2023 was 367.2 pence per share (31 March 2022: 361.40 pence
per share).
Other comprehensive income
30 March 2023
Cash flow Total other
Translation hedging comprehensive
reserve reserve income
GBPm GBPm GBPm
----------- --------- --------------
Other comprehensive income (0.1) - (0.1)
Effective portion of changes in fair value of
cash flow hedges - (10.6) (10.6)
Deferred tax on changes in fair value of cash
flow hedges - 1.3 1.3
--------- --------------
Total other comprehensive income (0.1) (9.3) (9.4)
--------- --------------
31 March 2022
Cash flow Total other
Translation hedging comprehensive
reserve reserve income
GBPm GBPm GBPm
--------- --------------
Other comprehensive income (0.0) - (0.0)
Effective portion of changes in fair value of cash
flow hedges (0.0) 7.9 7.9
Deferred tax on changes in fair value of cash flow
hedges 0.0 (1.2) (1.2)
--------- --------------
Total other comprehensive income (0.0) 6.7 6.7
--------- --------------
23 Financial instruments
Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, fair value interest
rate risk and cash flow interest rate risk), credit risk and
liquidity risk.
Risk management framework
Risk management in respect of financial risk is carried out by
the Group Treasury function under policies approved by the Board of
Directors. The Board of Directors has overall responsibility for
the establishment and oversight of the Group's risk management
framework. The Board provides written principles through its Group
Treasury Policy for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial
instruments and non-derivative financial instruments, and
investment of excess liquidity.
The main objectives of the Group Treasury function are:
-- To ensure shareholder and management expectations are managed on
cash flow and earnings volatility resulting from financial market
movements;
-- To protect the expected cash flow and earnings from interest rate
and foreign exchange fluctuations to within parameters acceptable
to the Board and shareholders; and
-- To control banking costs and service levels.
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Market risk
Foreign currency risk
The Group sources a significant level of purchases in foreign
currency, in the region of US$105m each financial year, and
monitors its foreign currency requirements through short, medium
and long-term cash flow forecasting. The value of purchases in US
dollars continues to increase each year and the risk management
policy has evolved with this increased risk.
At 30 March 2023, the Group's policy is to hedge up to 95% of
the next 12 months and additionally up to 60% of the following six
months out to 18 months forecast foreign exchange transactions,
using foreign currency bank accounts and forward foreign exchange
contracts. The transactions are deemed to be 'highly probable' and
are based on historical knowledge and forecast purchase and sales
projections.
The Group's exposure to foreign currency risk is as follows.
This is based on the carrying amount for monetary financial
instruments, except for derivatives which are based on notional
amounts:
30 March 2023
Euro US Dollar HKD Total
GBPm GBPm GBPm GBPm
--------------------------- ----- --------- ----- ------
Cash and cash equivalents 0.3 6.8 - 7.1
Trade payables (2.9) (7.2) - (10.1)
Forward exchange contracts 0.0 (3.3) - (3.3)
--------------------------- ----- --------- ----- ------
Balance sheet exposure (2.6) (3.7) - (6.3)
--------------------------- ----- --------- ----- ------
31 March 2022
Euro US Dollar HKD Total
GBPm GBPm GBPm GBPm
--------------------------- ----- --------- ----- -----
Cash and cash equivalents 0.0 0.2 0.0 0.2
Trade payables (2.1) (5.2) - (7.3)
Forward exchange contracts 0.0 2.2 - 2.2
--------------------------- ----- --------- ----- -----
Balance sheet exposure (2.1) (2.8) 0.0 (4.9)
--------------------------- ----- --------- ----- -----
Sensitivity analysis
A 5% weakening of the following currencies against the pound
sterling at the period end date in both years would have increased
profit or loss or equity by the amounts shown below. This
calculation is post the impact of hedging and assumes that the
change occurred at the balance sheet date and had been applied to
risk exposures existing at that date.
This analysis assumes that all other variables, in particular
other exchange rates and interest rates, remain constant.
Equity Profit or loss
----------
30 March 31 March 30 March 31 March
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
---------- -------- -------- -------- --------
US Dollar 0.2 (0.1) (0.0) 0.2
Euro (0.0) - (0.0) 0.1
---------- -------- -------- -------- --------
A 5% strengthening of the above currencies against the pound
sterling in any period would have had the equal but opposite effect
on the above currencies to the amounts shown above, on the basis
that all other variables remain constant.
Managing interest rate benchmark reform and associated risks
The Group's exposure to sterling SONIA designated in hedging
relationships is GBP123.3m at 30 March 2023, GBP100.0m of which
represents the nominal amount of the hedging interest rate swap and
the principal amount of the hedged sterling-denominated revolving
credit facility.
(ii) Interest rate risk
Cash flow and fair value interest rate risk
The Group's interest rate risk arises from long-term borrowings.
As at 30 March 2023 the Group had a revolving credit facility with
a face value totalling GBP100.0m and an asset backed loan with a
face value of GBP23.3m. The Group's borrowings as at 30 March 2023
incur interest at a rate of 1.35% to 1.50% plus SONIA at the
leverage prevalent in the period, which exposes the Group to cash
flow interest rate risk. The analysis of loan repayments is
detailed in note 19.
The Group's policy with regard to interest rate risk is to hedge
the appropriate level of borrowings by entering into fixed rate
agreements. The Group has fixed interest rate swap agreements over
a total of GBP100.0m of the senior facility borrowings at the
balance sheet date at a blended fixed rate of 0.811% which
commenced on 31 March 2021 and will expire on 25 September 2023.
From 25 September 2023 the Group has new fixed interest rate swap
agreements covering GBP50.0m of senior facility borrowing at a
blended fixed rate of 5.058% which expires on 25 September 2024.
The hedge is structured to hedge at least 70% of the forecast
outstanding debt for the next year.
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Profile
At the balance sheet date the interest rate profile of the
Group's interest-bearing financial instruments was:
Group Company
Book value Book value
At 30 March At 31 March Book value Book value
2023 2022 At 30 March At 31 March
GBPm GBPm 2023 GBPm 2022 GBPm
------------ ------------ ------------
Fixed rate instruments
Financial liabilities 100.0 100.0 100.0 100.0
Variable rate instruments
Financial liabilities 23.3 - - -
------------ ------------
Total financial liabilities 123.3 100.0 100.0 100.0
------------ ------------ ------------
All borrowings bear a variable rate of interest based on SONIA.
Group policy is to hedge at least 70% of the loan to ensure a fixed
rate of interest. Therefore, designated above is the portion of the
loan hedged by a fixed rate interest rate swap, which at the 30
March 2023 is GBP100.0m which is 100% of the drawn down revolving
credit facility, and the remaining un-hedged portion is designated
as variable rate.
Sensitivity analysis
A change of 50 basis points in interest rates at the period end
date would have increased/(decreased) equity and profit or loss by
the amounts shown below post hedging. This calculation assumes that
the change occurred at the balance sheet date and had been applied
to risk exposures existing at that date.
This analysis assumes that all other variables, in particular
foreign currency rates, remain constant and considers the effect of
financial instruments with variable interest rates, financial
instruments at fair value through profit or loss or available for
sale with fixed interest rates and the fixed rate element of
interest rate swaps. The analysis is performed on the same basis
for the comparative period.
At 30 March
2023 At 31 March
GBPm 2022 GBPm
Equity
Increase 0.5 0.5
Decrease (0.5) (0.5)
Profit or loss
Increase 0.1 -
Decrease (0.1) -
Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers, investment securities and operating
loans to Joint Venture veterinary practices.
Credit risk also arises from cash and cash equivalents,
derivative financial instruments and deposits with banks and
financial institutions. The Group ensures that the banks used for
the financing of the revolving credit facilities and interest rate
swap agreements hold an acceptable risk rating by independent
parties.
The Group has in place certain guarantees over the bank loans
taken out by a number of Joint Venture veterinary practice
companies in which it holds an investment. Further details of these
guarantees are disclosed in note 27. The performance of the Joint
Venture veterinary practice companies is reviewed on an ongoing
basis.
Exposure to credit risk
The Group's maximum exposure to credit risk, being the carrying
amount of financial assets, is summarised in the table within the
fair values section below.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
Management prepares and monitors rolling forecasts of the
Group's cash balances based on expected cash flows to ensure, as
far as possible, that it will have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions
without risking damage to the Group's reputation. Covenants are
monitored on a regular basis to ensure there is no risk or breach
which would lead to an 'Event of Default' and compliance
certificates are issued as required to the syndicate agent.
The following are the contractual maturities of financial
liabilities including estimates of interest payable based on SONIA
rates at the end of the financial period:
Group
30 March 2023
1 to <2
Carrying Contractual 1 year years 2 to 5 years
amount cash flows or less <5 years and over
GBPm GBPm GBPm GBPm GBPm GBPm
-------- ----------- --------- -------
Non-derivative financial
liabilities
Bank loans (note 19) 120.5 140.5 6.6 7.5 118.8 7.6
Trade payables (note
20) 155.5 155.5 155.5 - - -
276.0 296.0 162.1 7.5 118.8 7.6
-------- ----------- --------- -------
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
31 March 2022
2 to <5
Carrying Contractual 1 year 1 to <2 years 5 years
amount cash flows or less years and over
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 96.9 100.0 - - 100.0 -
Trade payables (note 20) 118.5 118.5 118.5 - - -
215.4 218.5 118.5 - 100.0 -
------------------------- ----------- --------- ------- ------------- ---------
Company
30 March 2023
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 97.3 111.9 4.0 2.7 105.2 -
97.3 111.9 4.0 2.7 105.2 -
------------------------- ----------- --------- ------- ------------- ---------
31 March 2022
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 96.9 100.0 - - 100.0 -
96.9 100.0 - - 100.0 -
------------------------- ----------- --------- ------- ------------- ---------
Liquidity risk and cash flow hedges
Cash flow hedges
The following table indicates the periods in which the cash
flows associated with cash flow hedging instruments are expected to
occur and to affect profit or loss:
Group
30 March 2023
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Current assets (note 16) 2.0 2.0 2.0 - - -
Non-current liabilities
(note 16) (0.4) (0.4) - (0.4) - -
Forward exchange contracts:
Current liabilities (note
16) (3.4) (3.4) (3.4) - - -
Fuel forward contracts:
Current liabilities (note
16) (0.3) (0.3) (0.3) - - -
(2.1) (2.1) (1.7) (0.4) - -
---------------------------- ----------- -------- ------- ------------- ---------
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
31 March 2022
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 1.6 1.6 - 1.6 - -
Forward exchange contracts:
Assets (note 16) 2.2 2.2 2.2 - - -
Fuel forward contracts:
Assets (note 16) 0.5 0.5 0.5 - - -
4.3 4.3 2.7 1.6 - -
---------------------------- ----------- -------- ------- ------------- ---------
Company
30 March 2023
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 2.0 2.0 2.0 - - -
Liabilities (note 16) (0.4) (0.4) - (0.4) - -
1.6 1.6 2.0 (0.4) - -
---------------------- ----------- -------- ------- ------------- ---------
31 March 2022
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 1.6 1.6 - 1.6 - -
1.6 1.6 - 1.6 - -
--------------------- ----------- -------- ------- ------------- ---------
Fair values of financial instruments
Investments
The fair values of investments are considered to be their
carrying value as the impact of discounting future cash flows has
been assessed as not material and the investment is
non-participatory.
Trade and other payables and receivables
The fair values of these items are considered to be their
carrying value as the impact of discounting future cash flows has
been assessed as not material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand (such as term deposits), then the fair
value is estimated at the present value of future cash flows,
discounted at the market rate of interest at the balance sheet
date.
Long term and short term borrowings
The fair value of bank loans and other loans approximates their
carrying value as they have interest rates based on SONIA. The
impact of credit risk has an immaterial impact on the fair
value.
Short term deposits
The fair value of short term deposits is considered to be their
carrying value as the balances are held in floating rate accounts
where the interest rate is reset to market rates.
Derivative financial instruments
The fair values of forward exchange contracts and interest rate
swap contracts are calculated by management based on external
valuations received from the Group's bankers and are based on
forward exchange rates and anticipated future interest yield
respectively.
Contingent consideration
Contingent consideration on acquisition or disposal of a
subsidiary is valued at fair value at the time of acquisition or
disposal. Any subsequent changes in fair values are recognised in
profit or loss.
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Fair values
The fair values of all financial assets and financial
liabilities by class together with their carrying amounts shown in
the balance sheet are as follows:
Fair value hierarchy
The table below shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels
in the fair value hierarchy.
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs)
30 March 2023
Fair Financial
value FVOCI assets Other Total
- hedging - equity at amortised financial carrying
instruments instruments cost liabilities amount
Carrying amount GBPm GBPm GBPm GBPm GBPm
Financial assets measured at fair
value
Other investments (note 16) - 2.1 - - 2.1
Interest rate swaps used for hedging
(note 16) 2.0 - - - 2.0
2.0 2.1 - - 4.1
Financial assets not measured at
fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.4 - 0.4
Current trade and other receivables
(note 17) - - 19.2 - 19.2
Amounts owed by Joint Venture veterinary
practices - funding, trading and
operating loans (note 17) - - 21.9 - 21.9
Cash and cash equivalents (note 18) - - 178.0 - 178.0
Loans to Joint Venture veterinary
practices - initial set up loans
(note 16) - - 6.6 - 6.6
Loans to Joint Venture veterinary
practices - other loans (note 16) - - 1.2 - 1.2
Non-current other receivables (note
16) - - 0.6 - 0.6
- - 227.9 - 227.9
Financial liabilities measured at
fair value
Fuel forward exchange contracts used
for hedging (note 16) (0.3) - - - (0.3)
Forward exchange contracts used for
hedging (note 16) (3.4) - - - (3.4)
Interest rate swaps used for hedging
(note 16) (0.4) - - - (0.4)
(4.1) - - - (4.1)
Financial liabilities not measured
at fair value
Current lease liabilities (note 12) - - - (83.3) (83.3)
Non-current lease liabilities (note
12) - - - (338.1) (338.1)
Trade payables (note 20) - - - (155.5) (155.5)
Amounts owed to Joint Venture veterinary
practices (note 20) - - - (4.5) (4.5)
Other interest-bearing loans and
borrowings (note 19) - - - (120.5) (120.5)
- - - (701.9) (701.9)
30 March 2023
Level Level Level
1 2 3 Total
Fair value GBPm GBPm GBPm GBPm
Financial assets measured at fair value
Other investments (note 16) - - 2.1 2.1
Interest rate swaps used for hedging (note
16) - - 2.0 2.0
Financial assets not measured at fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.4 0.4
Amounts owed by Joint Venture veterinary
practices - funding, trading and operating
loans (note 17) - - 21.9 21.9
Loans to Joint Venture veterinary practices
- initial set up loans (note 16) - - 6.6 6.6
Loans to Joint Venture veterinary practices
- other loans (note 16) - - 1.2 1.2
Non-current other receivables (note 16) - - 0.6 0.6
Financial liabilities not measured at fair
value
Other interest-bearing loans and borrowings
(note 19) - (123.3) - (123.3)
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
31 March 2022
Fair Financial
value FVOCI assets Other Total
- hedging - equity at amortised financial carrying
instruments instruments cost liabilities amount
Carrying amount GBPm GBPm GBPm GBPm GBPm
Financial assets measured at fair
value
Other investments (note 16) - 1.1 - - 1.1
Forward exchange contracts used for
hedging (note 16) 2.2 - - - 2.2
Fuel forward contracts used for hedging
(note 16) 0.5 - - - 0.5
Interest rate swaps used for hedging
(note 16) 1.6 - - - 1.6
4.3 1.1 - - 5.4
Financial assets not measured at
fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.2 - 0.2
Current trade and other receivables
(note 17) - - 28.0 - 28.0
Amounts owed by Joint Venture veterinary
practices - funding, trading and
operating loans (note 17) - - 15.2 - 15.2
Cash and cash equivalents (note 18) - - 166.0 - 166.0
Loans to Joint Venture veterinary
practices - initial set up loans
(note 16) - - 8.6 - 8.6
Loans to Joint Venture veterinary
practices - other loans (note 16) - - 2.1 - 2.1
Non-current other receivables (note
16) - - 0.5 - 0.5
Current other receivables (note 16) - - 0.3 - 0.3
- - 220.9 - 220.9
Financial liabilities measured at
fair value
Forward exchange contracts used for
hedging (note 16) (0.0) (0.0) - - (0.0)
(0.0) (0.0) - - (0.0)
Financial liabilities not measured
at fair value
Current lease liabilities (note 12) - - - (78.3) (78.3)
Non-current lease liabilities (note
12) - - - (304.7) (304.7)
Trade payables (note 20) - - - (118.5) (118.5)
Amounts owed to Joint Venture veterinary
practices (note 20) - - - (9.2) (9.2)
Other interest-bearing loans and
borrowings (note 19) - - - (96.9) (96.9)
- - - (607.6) (607.6)
31 March 2022
Level Level Level
1 2 3 Total
Fair value GBPm GBPm GBPm GBPm
Financial assets measured at fair value
Other investments (note 16) - - 1.1 1.1
Interest rate swaps used for hedging (note
16) - - 2.0 2.0
Financial assets not measured at fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.2 0.2
Amounts owed by Joint Venture veterinary
practices - funding and operating loans
(note 17) - - 15.2 15.2
Loans to Joint Venture veterinary practices
- initial set up loans (note 16) - - 8.6 8.6
Loans to Joint Venture veterinary practices
- other loans (note 16) - - 2.1 2.1
Non-current other receivables (note 16) - - 0.5 0.5
Other receivables (note 16) - - 0.3 0.3
Financial liabilities not measured at fair
value
Other interest-bearing loans and borrowings
(note 19) - (100.0) - (100.0)
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Changes in liabilities arising from financing activities
Group
Lease
Loans and borrowings liabilities Total
GBPm GBPm GBPm
Balance at 31 March 2022 96.9 383.0 479.9
Changes from financing cash flows
Proceeds from loans and borrowings 123.3 - 123.3
Repayment of borrowings (100.0) - (100.0)
Lease incentives received 22.0 22.0
Payment of lease liabilities - (83.1) (83.1)
Total changes from financing cash flows 23.3 (61.1) (37.8)
Other changes
Interest expense on lease liabilities - 12.4 12.4
Additions to lease liabilities - 87.4 87.4
Disposal of lease liabilities - (0.3) (0.3)
Capitalisation of debt issue costs (0.1) - (0.1)
Amortisation of debt issue costs 0.4 - 0.4
Total other changes 0.3 99.5 99.8
Balance at 30 March 2023 120.5 421.4 541.9
Lease
Loans and borrowings liabilities Total
GBPm GBPm GBPm
Balance at 25 March 2021 98.7 409.7 508.4
Changes from financing cash flows
Proceeds from loans and borrowings 100.0 - 100.0
Repayment of borrowings (100.0) - (100.0)
Payment of lease liabilities - (78.2) (78.2)
Total changes from financing cash flows - (78.2) (78.2)
Other changes
Interest expense on lease liabilities - 11.5 11.5
Additions to lease liabilities - 41.3 41.3
Disposal of lease liabilities - (1.3) (1.3)
Capitalisation of debt issue costs (3.3) - (3.3)
Accelerated amortisation of debt issue costs 0.7 - 0.7
Amortisation of debt issue costs 0.8 - 0.8
Total other changes (1.8) 51.5 49.7
Balance at 31 March 2022 96.9 383.0 479.9
Company
Loans and borrowings Total
GBPm GBPm
Balance at 31 March 2022 96.9 96.9
Changes from financing cash flows
Proceeds from loans and borrowings 100.0 100.0
Repayment of borrowings (100.0) (100.0)
Total changes from financing cash flows - -
Other changes
Amortisation of debt issue costs 0.4 0.4
Total other changes 0.4 0.4
Balance at 30 March 2023 97.3 97.3
At march Total
GBPm GBPm
Balance at 25 March 2021 98.7 98.7
Changes from financing cash flows
Proceeds from loans and borrowings 100.0 100.0
Repayment of borrowings (100.0) (100.0)
Total changes from financing cash flows - -
Other changes
Capitalisation of debt issue costs (3.3) (3.3)
Accelerated amortisation of debt issue costs 0.7 0.7
Amortisation of debt issue costs 0.8 0.8
Total other changes (1.8) (1.8)
Balance at 31 March 2022 96.9 96.9
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Cash flow hedge
reserve
2023 2022
GBPm GBPm
Foreign currency risk
Inventory purchases (2.5) 1.7
Commodity price risk -
Fuel purchases (0.3) 0.4
-
Interest rate risk
Variable rate instruments 1.2 1.3
Commodity Foreign currency Interest rate
price risk risk risk
Forward exchange Forward exchange Interest rate
contracts- contracts- swaps
fuel inventory
2023 2022 2023 2022 2023 2022
GBPm GBPm GBPm GBPm GBPm GBPm
Nominal amount
Carrying amount- asset 0.0 0.5 0.0 2.2 2.0 1.6
Carrying amount- liability (0.3) - (3.4) (0.0) (0.4) -
Changes in the value of hedging
instrument recognised in OCI
Amount of hedging reserve transferred
to cost of inventory 0.5 0.1 2.2 (0.4) 1.6 (1.5)
The following table provides a reconciliation by risk category
of hedging reserve and analysis of OCI items, net of tax, resulting
from cash flow hedging accounting:
2023 2022
GBPm GBPm
Balance at 31 March 2022/25 March 2021 3.4 (1.5)
Changes in fair value
Foreign currency risk- inventory purchase (5.5) 2.6
Commodity risk- fuel (0.9) 0.5
Interest rate risk 0.1 3.0
Tax on movements on reserves during the year 1.3 (1.2)
Balance at 30 March 2023/31 March 2022 (1.6) 3.4
Notes (forming part of the financial statements) continued
23 Financial instruments (continued)
Measurement of fair values
The following table shows the valuation techniques used in
measuring Level 2 and Level 3 fair values at the balance sheet
dates, as well as the significant unobservable inputs used.
Type Valuation technique Significant Inter-relationship
unobservable between significant
inputs unobservable inputs
and fair value measurement
Investment The fair values of investments Not applicable Not applicable
in equity in unlisted equity securities
securities are considered to be
their carrying value
as the impact of discounting
future cash flows has
been assessed as not
material and the investment
is non-participatory.
Forward exchange Market comparison technique Not applicable Not applicable
contracts - the fair values are
and interest based on broker quotes.
rate swaps Similar contracts are
traded in an active market
and the quotes reflect
the actual transactions
on similar instruments.
Other financial Other financial liabilities Future earnings Fair value linked to
liabilities include the fair values performance increase or decrease
of the put and call options in the best estimate
over the non-controlling of the future earnings
interests of subsidiary performance
undertakings. The fair
values represent the
best estimate of amounts
payable based on future
earnings performance
discounted to present
value.
Hedge accounting
Cash flow hedges
At 30 March 2023 and 31 March 2022, the Group held the following
instruments to hedge exposures to changes in foreign currency and
interest rates.
Maturity
1-6 months 6-12 More 1-6 months 6-12 months More
months than 1 than
year 1 year
2023 2023 2023 2022 2022 2022
Foreign currency risk
Forward exchange contracts
Net exposure (GBPm) 50.1 30.8 - 52.9 21.0 -
Average GBP-USD forward
contract rate 1.16 1.21 - 1.37 1.34 -
Average GBP-EUR forward
contract rate 1.14 1.11 - 1.18 1.18 -
Interest rate risk
Interest rate swaps
Net exposure (GBPm) 100.0 - 50.0 - - 100.0
Average fixed interest
rate 0.811% - 5.058% - - 0.811%
Company
The Company held interest rate swaps as at 30 March 2023 and 31
March 2022 which are valued as above.
Capital management
The Group's objectives when managing capital, which is deemed to
be total equity plus total debt, are to safeguard the Group's
ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders, through the
optimisation of the debt and equity balance, and to maintain a
strong credit rating and headroom on financial covenants. The Group
manages its capital structure and makes appropriate decisions in
light of the current economic conditions and strategic objectives
of the Group.
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the Group.
The funding requirements of the Group are met by the utilisation
of external borrowings together with available cash, as detailed in
note 19.
A key objective of the Group's capital management is to maintain
compliance with the covenants set out in the revolving credit
facility and to maintain a comfortable level of headroom over and
above these requirements.
Management have continued to measure and monitor covenant
compliance throughout the period and the Group has complied with
the requirements set.
Notes (forming part of the financial statements) continued
24 Share-based payments
At 30 March 2023 and 31 March 2022, the Group has four share
award plans, all of which are equity settled schemes.
1 CSOP
On 25 February 2014 the Company adopted the CSOP. Part I of the
CSOP is tax approved under Schedule 4 to the Income Tax (Earnings
and Pensions) Act 2003 and provides for the grant of tax approved
options. Part II of the CSOP provides for the grant of unapproved
options.
The tax approved options under Part I of the CSOP will be
exercisable between the third and tenth anniversary of the date of
grant, subject to continued employment with the Group. These awards
will be granted with an exercise price equal to the market value of
the shares at the grant date (as agreed with HMRC).
(a) Eligibility
All colleagues, including the Executive Directors and Senior
Executives, are eligible to participate in the CSOP, at the
discretion of the Remuneration Committee.
(b) Grant of options
No options may be granted more than ten years after the adoption
of the CSOP. Options under the CSOP will not form part of a
colleague's pensionable earnings.
(c) Vesting and performance
Colleagues who receive options under the CSOP and under the PSP
in connection with Admission will be subject to the same
performance conditions described in Section 1 (d) above in respect
of both grants. Colleagues who only receive options under the CSOP
in connection with Admission will not be subject to performance
conditions.
(d) Exercise price
The price at which an option holder may acquire shares on the
exercise of an option shall be determined by the Board but shall
not be less than the greater of market value of a share at the time
of grant and its nominal value. The exercise price is therefore
fixed at grant date.
(e) Individual limits
No option may be granted to an eligible colleague under Part I
of the CSOP which would result in the aggregate exercise prices of
shares comprised in all outstanding options granted to him/her
under Part I, when aggregated with outstanding options held under
any other tax approved executive share option scheme established by
the Company, exceeding the tax approved limit (currently
GBP30,000).
In addition, (both under Part I and II of the CSOP) the
aggregate exercise price of shares comprised in options granted to
a colleague under the CSOP and the PSP in any financial year shall
not exceed 150% of his/her annual salary for that year.
For the purposes of these limits, market value will be
calculated by reference to the market value of the shares on or
prior to the relevant date of grant as determined by the Board
(following consultation with the Remuneration Committee) and
subject to HMRC approval if applicable.
Part II of the CSOP provides for the grant of unapproved
options. This enables options to be granted under the same terms as
Part I of the CSOP but without complying with the particular
requirements of the legislation applicable to tax approved CSOP
Schemes. The provisions of the CSOP that do not apply under Part II
include the GBP30,000 limit and the need to seek HMRC approval for
the scheme and subsequent amendments (as applicable).
2 PSP
On 25 February 2014 the Company adopted the PSP. Awards under
the PSP were made on 17 March 2014 and annually thereafter up until
2017 after which no further awards were granted. The awards will be
exercisable between the third and tenth anniversary of the grant
date, subject to continued employment with the Group and the
satisfaction of performance conditions. These awards were granted
at nil cost.
(a) Eligibility
Only the Executive Directors, Senior Executives and certain
other senior colleagues were selected to participate in the
PSP.
(b) Grant of awards
Awards under the PSP will not form part of a colleague's
pensionable earnings. Awards are not transferable (other than on
death) without the consent of the Remuneration Committee.
(c) Exercise price
The price at which a colleague may acquire shares on the
exercise or vesting of an award under the PSP shall be determined
by the Remuneration Committee on the date of grant, and may, if the
Remuneration Committee determines, be nil or nominal value
only.
(d) Scheme limits
The number of newly issued shares over which (or in respect of
which) awards may be granted under the PSP on any date shall be
limited so that: (i) the total number of shares issued and issuable
in respect of options or awards granted in any ten year period
under the PSP and any other discretionary share option scheme of
the Company (including the RSA and the CSOP but other than to
satisfy dividend equivalent payments) is restricted to 5% of the
Company's issued shares calculated at the relevant time; and (ii)
the total number of shares issued and issuable pursuant to options
or awards granted in any ten year period under the PSP and any
other employee share scheme operated by the Company (including the
CSOP, SAYE and RSA but other than to satisfy dividend equivalent
payments) is restricted to 10% of the Company's issued shares
calculated at the relevant time.
For the purposes of these limits, no account will be taken of
options or awards granted before, on or in connection with
Admission and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting. Shares held in treasury will be treated as
newly issued shares for the purposes of these limits (as long as
this is required by institutional investor guidelines), but (for
the avoidance of doubt) shares acquired in the market will not.
(e) Individual limits
The aggregate market value of shares comprised in awards granted
to a colleague under the PSP, RSA and the CSOP in any financial
year shall not exceed 150% of their annual salary for that
year.
For the purposes of awards granted on (or before) Admission,
market value for these purposes was calculated by reference to the
Offer Price. For the purposes of awards granted following
Admission, market value for these purposes will be calculated by
reference to the market value of the shares on the relevant date of
grant as determined by the Board (following consultation with the
Remuneration Committee) in its absolute discretion.
Notes (forming part of the financial statements) continued
24 Share-based payments (continued)
(f) Performance
The Matching Awards granted on 17 March 2014 vested subject to
the satisfaction of the performance conditions outlined below. To
the extent that any future awards are granted, different conditions
may apply (in the absolute discretion of the Remuneration
Committee).
The performance conditions were as follows:
-- 75% of the Matching Award was subject to the CAGR in the Company's earnings
per share ('EPS') over three financial years, namely FY15, FY16 and FY17
(together the 'Performance Period') (which, for the avoidance of doubt,
ended on 30 March 2017). If the CAGR in the Company's EPS was 10%, then
10% of the total Matching Award would vest. If the CAGR in the Company's
EPS was 17.5% or more, then 75% of the total Matching Award would vest.
Vesting was on a straight-line basis between these two points. For the
avoidance of doubt, if the CAGR in the EPS was less than 10% over the
Performance Period then the amount of the Matching Award which would vest
under this EPS performance condition would be nil.
-- 25% of the total Matching Award was subject to the Company's total shareholder
return ('TSR') as compared to a comparator group made up of a selected
group of retail companies over the Performance Period. Vesting of 6.25%
of the total Matching Award would occur for median performance. Vesting
of the maximum 25% of the total Matching Award would occur for upper quartile
performance or above. Vesting would occur on a straight-line basis between
these two points. If the Company's TSR performance over the Performance
Period was below median, then the amount of the Matching Award which would
vest under this TSR performance condition would be nil.
-- To the extent vested as to performance, Matching Awards became exercisable
in three equal amounts on the third, fourth and fifth anniversary of 17
March 2014, but subject to continued employment with the Group.
3 SAYE
On 25 February 2014, the Company adopted the SAYE (which was
registered with and self-certified with HMRC on 4 April 2015). The
rules of the SAYE were adopted pursuant to Schedule 3 of the Income
Tax (Earnings and Pensions) Act 2003 and provide for the grant of
tax approved options. In September each year, the Company issues
invitations under the rules of the SAYE which provides eligible
colleagues with an opportunity to receive share options at a 20%
discount to the market price. The maximum monthly savings is GBP500
per month. The Executive Directors have elected to participate in
the SAYE, along with 15.38% of eligible colleagues.
The options are granted once a year, and in normal circumstances
they are not exercisable until completion of a three year savings
period, beginning on 1 December each year, and will then be
exercisable for a period of six months following completion of the
relevant savings period.
(a) Eligibility
All colleagues and full-time Directors of the Group, who have
been in continuous service for such period of time (not exceeding
five years) as may be determined by the Board prior to the relevant
date of grant of an option and who are liable to UK income tax, are
eligible to participate in the SAYE.
Participation may also be offered, at the discretion of the
Board (taking account of the recommendations of the Remuneration
Committee), to other Directors or employees who otherwise do not
satisfy all of the above criteria, although Non-Executive Directors
are not eligible to participate in the SAYE.
(b) Issue of invitations
Invitations to participate in the SAYE may be made during each
42 day period from (and including) (i) the date on which any
amendment to the SAYE is approved or adopted by the Company's
shareholders, (ii) the announcement of the Company's final or
interim results for any financial period, (iii) the occurrence of
an event which the Remuneration Committee considers to be an
non-underlying event concerning the Group or (iv) changes to the
legislation affecting tax approved SAYE option schemes coming into
effect. If any of the above periods is a 'close period' as a result
of the application of the Model Code for Securities Transactions by
Directors of Listed Companies (or as a result of the Company's
equivalent internal share dealing rules) and the Company is
prohibited from issuing invitations and/or granting options as a
result, then invitations may be made within 42 days of the end of
the close period.
Invitations may be issued by the trustee of an employee benefit
trust. No invitations may be issued or options granted more than
ten years after the adoption of the SAYE.
(c) Exercise price
The price at which an option holder may acquire shares on the
exercise of an option shall be determined by the Board but shall
not be less than the greater of 80% of the market value of a share
at the time of grant and its nominal value.
(d) Savings contract
Options may be granted by the Board or the trustee of an
employee benefit trust. Upon applying for an option, the colleague
will be required to enter into an approved savings contract with a
savings institution nominated by the Company which lasts for three
years. The maximum amount which an employee is permitted to
contribute under SAYE contracts is GBP500 per month. The Board may
set lower savings limits than this for different colleagues by
reference to objective criteria such as levels of salary or length
of service. The minimum contribution is GBP5 per month (or such
greater amount as the Board may specify, not to exceed GBP10). The
total exercise price of the shares over which the option is granted
may not exceed the aggregate of the monthly contributions and bonus
payable at the end of the colleague's related SAYE contract.
(e) Scheme limits
The number of newly issued shares over which (or in respect of
which) options may be granted under the SAYE on any date of grant
shall be limited so that the total number of shares issued or
capable of being issued in any ten year period under all the
Company's employee share schemes (including the CSOP, PSP and RSA
but other than to satisfy dividend equivalent payments) is
restricted to 10% of the Company's issued shares calculated at the
relevant time. Any options or rights to acquire shares granted
before, on or in connection with Admission will be excluded from
this limit, and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting.
(f) Exercisability
Options will normally be exercisable during a period of six
months following the allocation of a bonus under the related SAYE
contract and will normally lapse upon cessation of employment.
Earlier exercise is, however, permitted if the colleague dies or
leaves employment through injury, disability, redundancy or
retirement or where a colleague leaves employment of the Group by
reason of his employing company ceasing to be a member of the
Group, or if the undertaking in which he is employed is sold
outside the Group. Early exercise will also be permitted in the
event of a takeover, reconstructions or voluntary winding up of the
Company.
Notes (forming part of the financial statements) continued
24 Share-based payments (continued)
4 RSA
On 20 July 2017 the Company adopted the RSA. Awards under the
RSA were made on 20 July 2017 and annually thereafter and will be
exercisable between the third and tenth anniversary of this date,
subject to continued employment with the Group and the satisfaction
of performance conditions. These awards are granted at nil
cost.
(a) Eligibility
All colleagues, including the Executive Directors and Senior
Executives, are eligible to participate in the RSA, at the
discretion of the Remuneration Committee.
(b) Grant of awards
Awards under the RSA will not form part of a colleague's
pensionable earnings. Awards are not transferable (other than on
death) without the consent of the Remuneration Committee.
(c) Exercise price
The price at which a colleague may acquire shares on the
exercise or vesting of an award under the RSA shall be determined
by the Remuneration Committee on the date of grant, and may, if the
Remuneration Committee determines, be nil or nominal value
only.
(d) Scheme limits
The number of newly issued shares over which (or in respect of
which) awards may be granted under the RSA on any date shall be
limited so that: (i) the total number of shares issued and issuable
in respect of options or awards granted in any ten year period
under the RSA and any other discretionary share option scheme of
the Company (including the PSP and the CSOP but other than to
satisfy dividend equivalent payments) is restricted to 5% of the
Company's issued shares calculated at the relevant time; and (ii)
the total number of shares issued and issuable pursuant to options
or awards granted in any ten year period under the RSA and any
other employee share scheme operated by the Company (including the
CSOP, SAYE and PSP but other than to satisfy dividend equivalent
payments) is restricted to 10% of the Company's issued shares
calculated at the relevant time.
For the purposes of these limits, no account will be taken of
options or awards granted before, on or in connection with
Admission and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting. Shares held in treasury will be treated as
newly issued shares for the purposes of these limits (as long as
this is required by institutional investor guidelines), but (for
the avoidance of doubt) shares acquired in the market will not.
(e) Individual limits
The aggregate market value of shares comprised in awards granted
to a colleague under the RSA, PSP and the CSOP in any financial
year shall not exceed 150% of their annual salary for that year.
Market value for these purposes will be calculated by reference to
the market value of the shares on the relevant date of grant as
determined by the Board (following consultation with the
Remuneration Committee) in its absolute discretion.
Fair value of share awards
The expected volatility is based on historical volatility of a
peer group of companies over a relevant period prior to award. The
expected life is the average expected period to exercise, which has
been taken as three years. The risk free rate of return is the
yield on zero-coupon UK government bonds with a life equal to this
expected life.
Options are valued using a Black-Scholes option-pricing model
for the non-market based (EPS element) performance conditions and a
Monte-Carlo simulation for the market-based (TSR element)
performance conditions.
Special provisions allow early exercise in the case of death,
injury, disability, redundancy, retirement or because the Company
which employs the option holder ceases to be part of the Group or
in the event of a change in control, reconstruction or winding up
of the Company.
Notes (forming part of the financial statements) continued
24 Share-based payments (continued)
The key assumptions used in the fair value of the awards were as
follows:
RSA PSP
2022 2021 2020 2019 2018 2017 2016 2015
At grant date
Share price GBP3.47 GBP4.57 GBP2.28 GBP1.87 GBP1.37 GBP2.59 GBP2.75 GBP2.45
Exercise price GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00
Expected volatility 32% 32% 32% 32% 32% 32% 30% 30%
Option life (years) 10 10 10 10 10 10 10 10
Expected dividend yield 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Risk free interest rate n/a n/a n/a n/a n/a 0.50% 1.07% 1.07%
Weighted average fair value GBP3.47 GBP4.57 GBP2.28 GBP1.87 GBP1.37 GBP2.06 GBP2.06 GBP2.06
of options granted
CSOP SAYE
2017 2016 2015 2022 2021 2020
At grant date
Share price GBP2.59 GBP2.75 GBP2.31 GBP3.05 GBP5.13 GBP2.87
Exercise price GBP2.59 GBP2.75 GBP2.31 GBP2.44 GBP4.10 GBP2.29
Expected volatility 32% 32% 37% 37% 33% 32%
Option life (years) 10 10 10 3 3 3
Expected dividend yield 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Risk free interest rate 0.50% 2.25% 2.25% 1.40% 0.64% 0.20%
Weighted average fair GBP0.65 GBP0.89 GBP0.75 GBP1.16 GBP1.68 GBP0.95
value of options granted
As both the RSA and PSP awards have a nil exercise price the
risk free rate of return does not have any effect on the estimated
fair value.
Movements in awards under share-based payment schemes:
PSP CSOP SAYE RSA Total
000 000 000 000 000
Outstanding at start of year 2 476 3,218 5,925 9,621
Granted - - 2,276 1,778 4,054
Forfeited - (32) (1,102) (855) (1,989)
Exercised - (114) (490) (1,830) (2,434)
Lapsed - (2) (11) (11) (24)
Outstanding at end of year 2 328 3,891 5,007 9,228
Weighted average exercise
price - 2.57 2.55 - NA
The Group income statement charge recognised in respect of
share-based payments for the 52 week period ended 30 March 2023 is
GBP4.9m (53 week period ended 31 March 2022: GBP4.9m).
Notes (forming part of the financial statements) continued
25 Commitments
Capital commitments
At 30 March 2023, the Group is committed to incur capital
expenditure of GBP3.0m (31 March 2022: GBP21.7m). Capital
commitments predominantly relate to the cost of investment in and
refurbishment of the new Pets at Home Distribution Centre.
At 30 March 2023, the Group has a commitment to increase the
loan funding to Joint Venture companies of GBP0.4m (31 March 2022:
GBP0.8m), this increase in funding is written into the Joint
Venture agreements and becomes payable when certain criteria are
met.
26 Contingencies
Veterinary practices
Provisions are maintained by the Group, where necessary, against
certain balances held with the veterinary practices. During the
period, the Group also had in place certain guarantees over the
bank loans taken out by a number of veterinary practice companies
in which it holds an investment in non-participatory share capital.
At the end of the period, the total amount of bank overdrafts and
loans guaranteed by the Group amounted to GBP7.6m (31 March 2022:
GBP11.2m).
The Group is a guarantor for the lease for veterinary practices
that are not located within Pets at Home stores. The Group is also
a guarantor to a small number of third parties where the lease has
been reassigned.
Exemption from audit by parent guarantee
The following wholly owned subsidiaries of the Company are
covered by a guarantee provided by Pets at Home Group Plc and are
consequently entitled to an exemption under s479A from the
requirement of the Act relating to the audit of individual
accounts. Under this guarantee, the Group will guarantee all
outstanding liabilities of these entities. No liability is expected
to arise under the guarantee. The entities covered by this
guarantee are disclosed below.
Company Registered number
Aberdeen Vets4Pets Limited 09393267
Aberdeen North Vets4Pets
Limited 11024679
Accrington Vets4Pets Limited 10015704
Alton Vets4Pets Limited 09639868
Andover Vets4Pets Limited 08132407
Bangor Wales Vets4Pets Limited 08314827
Companion Care (Ballymena)
Limited 08294444
Companion Care (Banbury)
Limited 08606393
Companion Care (Barnsley
Cortonwood) Limited 04141142
Bearsden Vets4Pets Limited 07780175
Bedminster Vets4Pets Limited 09267870
Belfast Stormont Vets4Pets
Limited 09022077
Bicester Vets4Pets Limited 10285804
Blackpool Warbreck Vets4Pets
Limited 08394978
Bonnyrigg Vets4Pets Limited 10757330
Borehamwood Vets4Pets Limited 09319066
Bourne Vets4Pets Limited 10200670
Bracknell Vets4Pets Limited 10605544
Bramley Vets4Pets Limited 04238788
Brighton Vets4Pets Limited 13539268
Carmarthen Vets4Pets Limited 09498169
Companion Care (Chippenham)
Limited 08107702
Clitheroe Vets4Pets Limited 09878308
Corby Vets4Pets Limited 08163294
Craigavon Vets4Pets Limited 08846831
Davidsons Mains Vets4Pets
Limited 07726992
Denbigh Vets4Pets Limited 10976376
Doncaster Vets4Pets Limited 04335358
East Kilbride South Vets4Pets
Limited 09628917
Ellesmere Port Vets4Pets
Limited 09725644
Companion Care (Ely) Limited 04417089
Evesham Vets4Pets Limited 09269582
Companion Care (Exeter) Limited 04930076
Companion Care (Exeter Marsh)
Limited 08314727
Companion Care (Farnborough)
Limited 07673889
Grantham Vets4Pets Limited 08361049
Guildford Vets4Pets Limited 13470077
Handforth Vets4Pets Limited 13371655
Haverfordwest Vets4Pets Limited 09485504
Huddersfield Vets4Pets Limited 07207906
Inverurie Vets4Pets Limited 11056047
Kendal Vets4Pets Limited 10163314
Companion Care (Kirkcaldy)
Limited 07680864
Lancaster Vets4Pets Limited 08536904
Leeds Kirkstall Vets4Pets
Limited 10291543
Leicester St Georges Vets4Pets
Limited 09881176
Linlithgow Vets4Pets Limited 09966547
Liverpool OS Vets4Pets Limited 06959208
Companion Care (Llantrisant)
Limited 08080307
Companion Care (Speke) Limited 07149744
Companion Care (Macclesfield)
Limited 08285995
Maidstone Vets4Pets Limited 05171954
Companion Care (Maidstone)
Limited 05094399
Malvern Vets4Pets Limited 10516552
Market Harborough Vets4Pets
Limited 10602806
Marlborough Vets4Pets Limited 09869384
Monmouth Vets4Pets Limited 10756991
Musselburgh Vets4Pets Limited 10425760
Companion Care (Newport)
Limited 08425358
Newton Mearns Vets4Pets Limited 07957431
Newtownards Vets4Pets Limited 10067571
Northwich Vets4Pets Limited 11107287
Pet Advisory Services Limited 09180974
Prescot Vets4Pets Limited 08878815
Rawtenstall Vets4Pets Limited 09009519
Redditch Vets4Pets Limited 05612150
Runcorn Vets4Pets Limited 11446894
Sheldon Vets4Pets Limited 08822150
Sidcup Vets4Pets Limited 08187232
South Shields Quays Vets4Pets
Limited 09848857
Companion Care (Slough) Limited 07427613
St Neots Vets4Pets Limited 09811640
Staines Vets4Pets Limited 13584062
Companion Care (Stratford-upon-Avon)
Limited 07329166
Sudbury Vets4Pets Limited 09916308
Thamesmead Vets4Pets Limited 09881179
Tiverton Vets4Pets Limited 11023079
Uttoxeter Vets4Pets Limited 11145982
VetsDirect Limited SC230445
Wallasey Bidston Moss Vets4Pets
Limited 09190138
Wellingborough Vets4Pets
Limited 07620413
Wokingham Vets4Pets Limited 09869355
Wrexham Vets4Pets Limited 07103838
Companion Care Management
Services Limited 08878037
Pets at Home (ESOT) Limited 03911784
Pets at Home No.1 Limited 08887355
Pets at Home Holdings Limited 03864149
Pet City Limited 02466773
Pet City Holdings Limited 02342109
Pet City Resources Limited 02634797
Vets4Pets Services Limited 05055601
Vets4Pets Veterinary Group
Limited 04263054
Notes (forming part of the financial statements) continued
27 Related parties
Joint Venture veterinary practice transactions
The Group has entered into a number of arrangements with third
parties in respect of veterinary practices. These veterinary
practices are deemed to be related parties due to the factors
explained in note 1.4.
Financial commitments provided to related party veterinary
practices for funding are set out in note 25.
During the period, the Group had in place certain guarantees
over the bank loans taken out by a number of veterinary practice
companies in which it holds an investment in non-participatory
share capital. At the end of the period, the total amount of bank
overdrafts and loans guaranteed by the Group amounted to GBP7.6m
(31 March 2022: GBP11.2m).
The transactions entered into during the period and the balances
outstanding at the end of the period are as follows:
30 March 2023 31 March 2022
GBPm GBPm
Transactions
Fees for services provided to Joint Venture veterinary
practices 77.2 69.9
Rental and other occupancy charges to Joint Venture
veterinary practices 12.2 11.7
Total income from Joint Venture veterinary practices 89.4 81.6
Acquisitions
Consideration for Joint Venture veterinary practices
acquired (note 10) 0.5 2.1
Balances
Included within trade and other receivables (note
17):
- Operating loans
Gross value of operating loans 13.8 20.2
Allowance for expected credit losses held for
operating loans (3.4) (5.0)
Net operating loans 10.4 15.2
Trading balances 11.5 -
Included within other financial assets and liabilities
(note 16):
Loans to Joint Venture veterinary practices - initial
- set up loans
Gross value of initial set up loans 7.6 9.8
Allowance for expected credit losses held for
initial set up loans (1.0) (1.2)
Net initial set up loans 6.6 8.6
Loans to Joint Venture veterinary practices - other
loans
Gross value of other loans 1.2 2.1
Allowance for expected credit losses held for
other loans - -
Net other loans 1.2 2.1
Included within trade and other payables (note 20):
Trading balances (4.5) (9.2)
Total amounts receivable from veterinary practices
(before provisions) 29.6 22.9
Fees for services provided to related party veterinary practices
are included within revenue and relate to charges for support
services offered in such areas as clinical development, promotion
and methods of operation as well as service activities including
accountancy, legal and property. In accordance with IFRS15, revenue
in the 52 week period ended 30 March 2023 and the 53 week period
ended 31 March 2022 excludes irrecoverable fee income from Joint
Venture veterinary practices.
Funding for new practices represents the amounts advanced by the
Group to support veterinary practice opening costs. The funding is
short term and the related party Joint Venture veterinary practice
draws down their own bank funding to settle these amounts
outstanding with the Group shortly after opening.
Trading balances represent costs incurred and income received by
the Group in relation to the services provided to the Joint Venture
veterinary practices that have yet to be recharged.
Operating loans represent amounts advanced to related party
Joint Venture veterinary practices to support their working capital
requirements and longer term growth. The loans advanced to the
practices are interest free and either repayable on demand or
repayable within 90 days of demand. No facility exists and the
levels of loans are monitored in relation to review of the
practices performance against business plan. Based on the projected
cash flow forecast on a practice by practice's basis, the funding
is often expected to be required for a number of years. As
practices generate cash on a monthly basis it is applied to the
repayment of brought forward operating loans. For immature
practices, loan balances may increase due to operating
requirements. The balances above are shown net of allowances for
expected credit losses held for operating loans of GBP3.4m (31
March 2022: GBP5.0m).
Notes (forming part of the financial statements) continued
27 Related parties (continued)
Loans to Joint Venture veterinary practices for other related
parties - other loans are provided to Joint Venture veterinary
practice companies trading under the Companion Care and Vets4Pets
brands, in which the Group's share interest is non-participatory.
These loans represent a long-term investment in the Joint Venture,
supporting their initial set up and working capital, and are held
at amortised cost under IFRS9. The balances above are shown net of
allowances for expected credit losses held for initial set up loans
of GBP1.0m (31 March 2022: GBP1.2m).
In the 52 week period ended 30 March 2023, the value of loans
written off recognised in the income statement amounted to GBP2.0m
which relates to operating loans. In the 53 week period ended 31
March 2022 the value of loans written off recognised in the income
statement amounted to GBP2.3m, which relates to operating
loans.
At 30 March 2023, the Group had a commitment to increase the
loan funding to Joint Venture companies of GBP0.4m (31 March 2022:
GBP0.8m); this increase in funding is written into the Joint
Venture agreements and becomes payable when certain criteria are
met.
The Group is a guarantor for the leases for veterinary practices
that are not located within Pets at Home stores.
Key management personnel
Details of remuneration paid to key management personnel are set
out in note 4.
28 Investment in subsidiaries
Company
Investments
in subsidiaries
GBPm
----------------
At 30 March 2023 and 31 March 2022 936.2
----------------
Impairment testing
Management have conducted a full impairment review which has
been undertaken on the Group's cash generating units of which the
Company's investments form part. The results of this review are
disclosed in note 13, including a sensitivity analysis. In this
review, the goodwill on consolidation balance of GBP959.2m at 30
March 2023 exceeds the investments held in subsidiary undertakings
of GBP936.2m, and therefore management have concluded that under
IAS36, no impairment has been identified with regard to the
Company's investments in subsidiaries.
Registered office address
Pets at Home (Asia) Limited: Units 704 5A, 7/F, Tower B,
Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong,
Kowloon, Hong Kong
PAH Pty Limited: Herbert Greer and Rundle, Level 21, 385 Bourke
Street, Melbourne, VIC 3000, Australia
Pure Pet Food Limited: Unit 6, Brookmills, Saddleworth Road,
Greetland, Halifax, West Yorkshire, England, HX4 8LZ
Dog Stay Limited: 305 Regents Park Road, Finchley, London,
England, N3 1DP
VetsDirect Limited: Dickson Minto, 16 Charlotte Square,
Edinburgh, Scotland, EH2 4DF
Project Blu Limited: 34 Cardiff Road, Dinas Powys, Wales CF64
4JS
The registered office of all the remaining companies in which
the Group has an interest in the share capital is Epsom Avenue,
Stanley Green, Handforth, Cheshire, England SK9 3RN.
Group
Details of the subsidiary undertakings are as follows:
In the 52 week period ended 30 March 2023, the Group has also
acquired 100% of the 'A' shares of six companies. These practices
were previously accounted for as Joint Venture veterinary practices
as the Group held 100% of the non-participatory 'B' ordinary
shares. Acquisition of the 'A' shares has led to the control and
consolidation of these companies. A detailed explanation for the
basis of consolidation can be found in note 1.4.
Further details of these acquisitions can be found in note
10.
Class of
shares At 30 March At 31 March
Company Holding Country of incorporation held 2023 % 2022 %
Brand Development Limited Indirect Guernsey Ordinary 100 100
Companion Care (Services)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care Management
Services Limited Indirect United Kingdom Ordinary 100 100
Les Boues Limited Indirect Jersey Ordinary 100 100
PAH Pty Limited Indirect Australia Ordinary 100 100
Pet Advisory Services Limited Indirect United Kingdom Ordinary 100 100
Pet Investments Limited Indirect United Kingdom Ordinary 100 100
Pets at Home (Asia) Limited Indirect Hong Kong Ordinary 100 100
PAH Financial Services Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Holdings Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Limited Indirect United Kingdom Ordinary 100 100
Pets at Home No.1 Limited Direct United Kingdom Ordinary 100 100
Pets at Home Superstores
Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Vets Group
Limited Indirect United Kingdom Ordinary 100 100
Pets at Home (ESOT) Limited Indirect United Kingdom Ordinary 100 100
Pet City Holdings Limited Indirect United Kingdom Ordinary 100 100
Pet City Limited Indirect United Kingdom Ordinary 100 100
Pet City Resources Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets (Services) Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets Holdings Limited Indirect Guernsey Ordinary 100 100
Vets4Pets I.P. Limited Indirect Guernsey Ordinary 100 100
Vets4Pets Services Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets UK Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets Limited Indirect Guernsey Ordinary 100 100
Vets4Pets Veterinary Group
Limited Indirect United Kingdom Ordinary 100 100
VetsDirect Limited Indirect United Kingdom Ordinary 100 100
Aberdeen North Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Aberdeen Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Accrington Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Addlestone Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Alton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Andover Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Aylesbury Berryfields Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bangor Wales Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Bearsden Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bedminster Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Belfast Stormont Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bicester Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bishop Auckland Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Blackpool Warbreck Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bodmin Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bolton Central Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bonnyrigg Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Borehamwood Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bourne Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bracknell Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bradford Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bramley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bramley Vets4Pets (Newco)
Limited Indirect United Kingdom Ordinary 100 100
Bridlington Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Brighton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bromborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Cambridge Perne Road Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Canvey Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Carmarthen Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Chorley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Clacton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Clitheroe Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Colchester Layer Road Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Colchester Vets4Pets Advanced
Practice Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Ballymena)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Banbury)
Limited Indirect United Kingdom Ordinary 100 50
Companion Care (Barnsley
Cortonwood) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Chippenham)
Limited Indirect United Kingdom Ordinary 100 50
Companion Care (Ely) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Exeter Marsh)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Exeter)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Farnborough)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Kendal)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Kirkcaldy)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Llantrisant)
Limited Indirect United Kingdom Ordinary 100 50
Companion Care (Macclesfield)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Maidstone)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Newport)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Nottingham)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Slough)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Speke) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Stratford-Upon-Avon)
Limited Indirect United Kingdom Ordinary 100 100
Corby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Coventry Canley Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Craigavon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Crosby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Davidsons Mains Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Denbigh Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Didcot Vets4Pets Limited Indirect United Kingdom Ordinary 100 -
Doncaster Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Dundee Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
East Grinstead Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
East Kilbride South Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Ellesmere Port Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Evesham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Gillingham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Grantham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Great Yarmouth Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Guildford Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Handforth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Haverfordwest Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Hemsworth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Hexham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Horden Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Horsham Vets4Pets Limtied Indirect United Kingdom Ordinary 100 -
Huddersfield Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Inverness Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Inverurie Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Kendal Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Kingswood Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Lancaster Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Leamington Spa Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Leamington Spa Myton Road
Vets4Pets Limited Indirect United Kingdom Ordinary 100 -
Leeds Kirkstall Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Leicester St Georges Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Leven Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Linlithgow Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Littleover Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Liverpool OS Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Long Eaton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Maidstone Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Malvern Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Market Harborough Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Marlborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Melton Mowbray Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Mexborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Milton Keynes Broughton
Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Monmouth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Musselburgh Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newark Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newhaven Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newton Mearns Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Newtownards Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Northwich Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Norwich Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Nottingham Castle Marina
Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Pentland Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Perth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Peterlee Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Poynton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Prescot Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Rawtenstall Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Redditch Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Ripon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Runcorn Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Scunthorpe Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Selby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sheffield Heeley Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Sheldon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Shepton Mallet Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Sidcup Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
South Shields Quays Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
St Austell Vets4Pets Limited Indirect United Kingdom Ordinary 95 95
St Neots Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Staines Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Stocksbridge Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Stoke-On-Trent Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Sudbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Teesside Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Thamesmead Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
The Heart of Dulwich Veterinary
Care Limited Indirect United Kingdom Ordinary 100 100
Thornbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Tiverton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Uckfield Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Uttoxeter Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wallasey Bidston Moss Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Warrington Winnick Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Wellingborough Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
West Drayton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wokingham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wrexham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Investments in Joint Venture practices and other investments
The Group holds an indirect interest in the share capital of the
following companies:
Class of
Country of shares At 30 March At 31 March
Company Holding incorporation held 2023 % 2022 %
Abingdon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
ABTW Limited Indirect United Kingdom Ordinary 50 50
Airdrie Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Alsager Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Altrincham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Amesbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bagshot Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bangor Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnsley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnstaple Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bedford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bedlington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Beeston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Beverley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Biggleswade Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bishops Stortford Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bishopston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bitterne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackburn Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackheath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackpool Squires Gate Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Blackwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bolton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bracknell Peel Centre Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bradford Idle Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Brighouse Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bristol Emerson Green Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bristol Imperial Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bristol Kingswood Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bristol Longwell Green Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bromsgrove Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Buckingham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bulwell Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Burscough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Burton-On-Trent Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bury St Edmunds Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Byfleet Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Caerphilly Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Camborne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cannock Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Canterbury Sturry Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Cardiff Ely Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cardiff Newport Road Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Carlisle Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Carrickfergus Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Castleford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Catterick Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chadwell Heath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cheadle Hulme Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chester Caldy Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chester Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chesterfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cirencester Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clevedon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cleveleys Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clifton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clowne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Coalville Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Colne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Aintree) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Andover) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ashford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ashton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Aylesbury)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ayr) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basildon Pipps
Hill) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basildon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basingstoke)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Beckton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bedford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Belfast) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bishopbriggs)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bletchley)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bolton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bournemouth)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Braintree)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Brentford)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bridgend) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bridgwater)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Brislington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bristol Filton)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Broadstairs)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Burgess Hill)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cambridge Beehive)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cambridge)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cannock) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Canterbury)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cardiff) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Charlton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chatham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chelmsford)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cheltenham)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chesterfield)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chichester)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chingford)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Christchurch)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Colchester)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Corstorphine)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Coventry Walsgrave)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cramlington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Crawley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Crayford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Croydon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Derby Kingsway)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Derby) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Dunstable)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Eastbourne)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Enfield) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Falmouth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fareham Collingwood)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fareham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Farnham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Folkestone)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fort Kinnaird)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Friern Barnet)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Gloucester)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Harlow) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hatfield) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hemel Hempstead)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (High Wycombe)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hove) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Huddersfield)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Huntingdon)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ilford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ipswich Martlesham)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Keighley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Kidderminster)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Kings Lynn)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leicester Beaumont
Leys) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leicester Fosse
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leighton Buzzard)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Linwood) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Lisburn) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Liverpool Penny
Lane) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Livingston)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Merry Hill)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Milton Keynes)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (New Malden)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Newbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Newcastle Kingston
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Northampton
Nene Valley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich Hall
Road) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich Longwater)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oldbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oldham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Orpington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oxford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Perth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Peterborough
Bretton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Peterborough)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Plymouth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Poole) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Portsmouth)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Preston Capitol)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Pudsey) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Reading) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Redditch) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Redhill) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Romford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Rotherham)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Rustington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Salisbury)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Scarborough)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Southampton)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Southend-On-Sea)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stevenage)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stirling) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stockport)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stoke Festival
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Swansea) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Swindon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Tamworth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Taunton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Telford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Truro) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Tunbridge Wells)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Wakefield)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Weston-Super-Mare)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Winchester)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Winnersh) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Woking) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Woolwell) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Worcester)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Wrexham Holt
Road) Limited Indirect United Kingdom Ordinary 50 50
Craigleith Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Crescent Link Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Crewe Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Cross Hands Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cumbernauld Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dagenham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Darlington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Daventry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Denton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dewsbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dorchester Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Dog Stay Limited Indirect United Kingdom Ordinary 12 12
Dover Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Droitwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Drumchapel Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dudley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dumbarton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dunfermline Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Durham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
East Kilbride Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eastleigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eastwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eccleshill Vets4Pets (Newco)
Limited Indirect United Kingdom Ordinary 50 50
Epsom Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Falkirk Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Feltham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Filton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gamston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gateshead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Glasgow Forge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Glasgow Pollokshaws Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Goldenhill Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gosport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gravesend Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Greasby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Greenford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Grimsby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Guernsey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Halesowen Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Halifax Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hamilton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Harrogate New Park Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Harrogate Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hartlepool Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hastings Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Havant Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Haverhill Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hayling Island Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Heanor Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hedge End Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hemel Hempstead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hendon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hereford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hertford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
High Wycombe Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hinckley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hucknall Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Anlaby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Stoneferry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ilkeston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ipswich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Irvine Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kettering Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kidderminster Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kilmarnock Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Kirkby in Ashfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Larne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Launceston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Birstall Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Colton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leigh-On-Sea Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Letchworth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leyland Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lichfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lincoln South Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lisburn Longstone Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Llandudno Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Llanelli Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Llanrumney Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Longton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Loughborough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Loughton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Luton Gipsy Lane Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Luton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lytham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Maidenhead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Maldon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Mansfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Mapperley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Merthyr Tydfil Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middlesbrough Cleveland Park
Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middlesbrough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middleton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Millhouses Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Morpeth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
New Milton Vets4pets Limited Indirect United Kingdom Ordinary 50 50
Newcastle-Upon-Tyne Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Newmarket Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newton Abbot Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newtownabbey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
North Tyneside Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Northallerton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Northampton Riverside Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Northampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Nottingham Chilwell Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Nottingham Netherfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Nuneaton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Oadby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Old Kent Road Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Oxford Cowley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Paisley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Penrith Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Pentland Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Penzance Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Peterborough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Pontypridd Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Poole Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Portishead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Portsmouth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Prenton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Preston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Prestwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Project Blu Limited Indirect United Kingdom Ordinary 9 -
Pure Pet Food Ltd Indirect United Kingdom Ordinary 12 12
Quinton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rayleigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rhyl Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Richmond Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rochdale Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rotherham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rugby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rugby Central Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ruislip Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rushden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Saffron Walden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Salford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Selly Oak Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sevenoaks Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sheffield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sheffield Drakehouse Vets4Pets
Limited Indirect United Kingdom Ordinary 50 100
Sheffield Wadsley Bridge Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Shelfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Shrewsbury Meole Brace Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Shrewsbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sittingbourne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Solihull Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Somercotes Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
South Shields Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southend Airport Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Southend-On-Sea Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
St Albans Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
St Helens Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stafford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stechford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stockton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stourbridge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Street Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sunderland South Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Sunderland Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sutton Coldfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Sutton In Ashfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Swindon Bridgemead Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Swinton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sydenham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Telford Madeley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Thurrock Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Tilehurst Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Torquay Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Totton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Trafford Park Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Trowbridge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wakefield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walkden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walsall Reedswood Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Waltham Abbey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walton on Thames Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Walton Vale Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Warminster Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Warrington Riverside Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Warrington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Washington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Waterlooville Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Watford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
West Bromwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Weymouth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Whitstable Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Widnes Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wigan Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wimbledon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wolverhampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Worksop Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Worthing Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
WSM Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Yate Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Yeovil Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
York Clifton Moor Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
York Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
During the 52 week period ended 30 March 2023, the Group has
sold 100% of the 'A' shares in five companies which were previously
classified as subsidiaries, and subsequent to sale of the 'A'
shares, have been accounted for as Joint Venture veterinary
practices, which has led to the reduction in the holding in five
entities listed above to 50% investment.
Glossary - Alternative Performance Measures
Guidelines on Alternative Performance Measures (APMs) issued by
the European Securities and Markets Authority came into effect for
all communications released on or after 3 July 2016 for issuers of
securities on a regulated market.
In the reporting of financial information, the Directors have
adopted various APMs of historical or future financial performance,
position or cash flows other than those defined or specified under
International Financial Reporting Standards (IFRS).
The Directors measure the performance of the Group based on the
following financial measures which are not recognised under
UK-adopted international accounting standards and consider these to
be important measures in evaluating the Group's strategic and
financial performance. The Directors believe that these APMs assist
in providing additional useful information on the underlying
trends, performance and position of the Group.
APMs are also used to enhance the comparability of information
between reporting periods by adjusting for non-underlying items, to
aid the user in understanding the Group's performance. The number
and appropriateness of APMs presented in the Financial Statements
has been reviewed and reduced from the comparative period to those
considered to be the most relevant for measuring the performance of
the Group.
Consequently, APMs are used by the Directors and management for
performance analysis, planning, reporting and incentive setting
purposes.
All APMs relate to the current period results and comparative
period where provided.
APMs considered by the business to be a key performance
indicator are explained in more detail on page 10 of the Annual
Report.
The key APMs used by the Group are:
'Like-for-Like' sales growth comprises total revenue in a
financial period compared to revenue achieved in a prior period for
stores, online operations, grooming salons and veterinary practices
that have been trading for 52 weeks or more, excluding fee income
from Joint Venture veterinary practices where the Group has bought
out the Joint Venture Partners or will offer to buy out the Joint
Venture Partners in the future
Underlying PBT: Underlying profit before tax (PBT) is based on
pre-tax profit before the impact of non-underlying items, being
certain costs or incomes that derive from events or transactions
that fall outside the normal activities of the Group and are
excluded by virtue of their size and nature in order to reflect
management's view of the performance of the Group.
Free cash flow: Net increase/(decrease) in cash before the
impacts of dividends paid, share buybacks, investments, proceeds
from new loans and repayment of borrowings.
References to Underlying GAAP measures and Underlying APMs
throughout the financial statements are measured before the effect
of non-underlying items.
APM Definition Reconciliation
Consumer Consumer revenue being statutory Consumer revenue (GBPm) FY23 FY22 Note
revenue Group revenue, less Joint Statutory Group revenue 1,404.2 1,317.8 CIS
Venture veterinary practice Joint Venture fee income (77.2) (69.9) 2
fee income (which forms Revenue by Group managed
part of statutory revenue veterinary practices (37.5) (31.2) 2
within the Vet Group), plus Revenue by all veterinary
gross consumer revenue made practices 492.9 457.1
by Joint Venture veterinary Consumer revenue 1,782.4 1,673.8
practices (unaudited). CIS = Consolidated
income statement
Like-for-like 'Like-for-like' revenue Not applicable.
revenue growth comprises total revenue
in a financial period compared
to revenue achieved in a
prior period for stores,
online operations, grooming
salons and veterinary practices
that have been trading for
52 weeks or more, excluding
fee income from Joint Venture
veterinary practices where
the Group has bought out
the Joint Venture Partners
or will offer to buy out
the Joint Venture Partners
in the future.
Underlying Underlying profit before Underlying PBT (GBPm) FY23 FY22 Note
profit before tax (PBT) is based on pre-tax Underlying PBT 136.4 130.1 CIS
tax profit before the impact Non-underlying items (13.9) 18.6 CIS
of certain costs or incomes ----
that derive from events Profit before tax 122.5 148.7
or transactions that fall CIS = Consolidated income statement
outside the normal activities
of the Group and are excluded
by virtue of their size
and nature in order to reflect
management's view of the
performance of the Group.
Underlying Underlying basic earnings Underlying basic
basic EPS per share (EPS) is based EPS (p) FY23 FY22 Note
on earnings per share before Underlying basic EPS 22.8 21.2 5
the impact of certain costs Non-underlying items (2.3) 3.7 5
or incomes that derive from ----
events or transactions that Basic earnings per
fall outside the normal share 20.5 24.9
activities of the Group
and are excluded by virtue
of their size and nature
in order to reflect management's
view of the performance
of the Group.
Free Net increase/(decrease) Free cash flow (GBPm) FY23 FY22 Note
cash flow in cash before the impacts Net increase in cash 12.0 64.6 CFS
of dividends paid, share Remove effects of:
buybacks, investments, proceeds Dividends 58.7 48.5 CFS
from new loans and repayment Acquisition of subsidiary 0.5 1.7 CFS
of borrowings. Proceeds from new
loan (123.3) (100.0) CFS
Repayment of borrowings 100.0 100.0 CFS
Share buyback 50.3 - CFS
Proceeds from sale
of PPE relating to
GVs - (0.6)
Disposal of subsidiaries
net of cash disposed
(non-underlying) - (19.2) CFS
----
Free cash flow 98.2 95.0
CFS = Consolidated
statement of cash
flows
Underlying Cash return on invested Underlying CROIC FY23 FY22 Note
CROIC capital, represents cash Cash returns:
returns divided by the average Underlying operating
of gross capital invested profit 149.7 144.5 2
(GCI) for the last 12 months. Share-based payment
Cash returns represent underlying charges 4.9 4.9 3
operating profit before 154.6 149.4
share-based payments subject Effective tax rate 19% 19%
to tax, then adjusted for Tax charge on above (29.4) (28.4)
depreciation of PPE, right-of-use 125.2 121.0
assets and amortisation. Underlying depreciation
GCI represents gross PPE, and amortisation 102.3 103.9 2
right-of-use assets and Cash returns 227.5 224.9
software, and other intangibles
excluding the goodwill created Gross capital invested
on the acquisition of the (GCI):
Group by KKR (GBP906,445,000) Gross property, plant
plus net working capital, and equipment 405.3 342.4 11
before the effect of non-underlying Gross right-of-use
items in the period. assets 635.1 548.2 12
Intangibles 1,046.3 1,034.1 13
Net working capital movement Less KKR goodwill (906.4) (906.4)
is a measure of the cash Investments 9.1 9.9
required by the business Net working capital: (121.6) (90.7) see definition
to fund its inventory, receivables Debtors 51.8 62.8
and payables. Stock 108.6 84.5
Creditors (265.2) (224.8)
Provisions (16.8) (13.2)
GCI (at period end) 1,067.8 937.5
Average 1,002.7 899.5
Underlying CROIC 22.7% 25.0%
Net cash/(debt) Cash and cash equivalents Net cash/(debt) (GBPm) FY23 FY22 Note
less loans and borrowings. Cash and cash equivalents 178.0 166.0 18
Loans and borrowings (123.3) (100.0) 19
Net cash/(debt) 54.7 66.0
Total indebtedness Cash and cash equivalents Total indebtedness
less loans and borrowings (GBPm) FY23 FY22 Note
plus lease liabilities. Cash and cash equivalents 178.0 166.0 18
Loans and borrowings (123.3) (100.0) 19
Net cash/(debt) 54.7 66.0
Lease liabilities (421.4) (383.0) 12
Total indebtedness (366.7) (317.0)
APM Definition Reconciliation
Pre IFRS Net cash (above) divided Pre IFRS 16 leverage FY23 FY22 Note
16 leverage by underlying EBITDA less Net (cash) (above) (54.7) (66.0)
expected rental charges Statutory operating
pre IFRS 16. profit 136.8 163.8
Underlying depreciation
of property, plant
and equipment 25.7 25.4 3
Underlying depreciation
of right-of-use assets 66.8 69.7 3
Amortisation of intangible
assets 9.8 8.8 3
Non-underlying depreciation
of property, plant
and equipment 0.4 - 3
Non-underlying depreciation
of right-of-use assets 0.7 - 3
Other non-underlying
items in EBITDA 11.8 (19.3) 3
Underlying EBITDA 252.0 248.4
Less:
Proforma rental charges
pre IFRS 16 (79.9) (80.8)
Underlying EBITDA
(pre IFRS 16)(1) 172.1 167.6
----
Pre IFRS 16 leverage (0.3)x (0.4)x
(1) Proforma rental charges pre IFRS
16 cannot be directly referenced in
the financial statements as the balance
represents 52 weeks (FY22: 53 weeks)
of rental charges for each lease held
at the balance sheet date.
Lease adjusted Total indebtedness divided Lease adjusted leverage FY23 FY22 Note
leverage by underlying EBITDA. Total indebtedness
(above) 366.7 317.0
Underlying EBITDA 252.0 248.4
Lease adjusted leverage 1.5x 1.3x
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END
FR AAMBTMTJTMLJ
(END) Dow Jones Newswires
May 25, 2023 02:00 ET (06:00 GMT)
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