FOR
IMMEDIATE RELEASE, 30 JANUARY 2024
Pets at Home Group Plc: Q3
FY24 Trading Statement
For the
12 week period to 4 January 2024
Resilient peak demand but
below our expectations
Financial Highlights
|
•
|
Q3 consumer revenue1 up
6.0% on last year and 15.4% on a 2-year basis. Growth was supported
by growing average customer spend and growth in active VIP members,
up 2% YoY to 7.7m.
|
|
•
|
Group revenue up 4.3% in Q3 to
£362.4m, with Group like-for-like2 (LFL) revenue up
4.4%.
|
|
|
ᵒ
|
Continued strong performance in our
Vet Group with Q3 revenue up 13.4%, and LFL2 up 13.3%,
supported by good progress in adding vet talent and by sustained
growth in average spend, driven by a blend of price and a shift to
more advanced procedures.
|
|
|
ᵒ
|
Retail saw Q3 revenue up 3.5% and
LFL2 up 3.7%, resilient against very strong performance
last year, however this growth fell below our expectations. We were
pleased to see volume growth and share gains across food, against a
slowing market backdrop, showing the business remains fundamentally
well positioned. However, discretionary accessories trends remained
soft and inflation across Retail slowed to 3.2% (from 5.6% in
Q2).
|
|
•
|
Gross margin performance improved
sequentially from H1, with strong sell through of seasonal ranges
meaning we exited Q3 with a clean inventory position. Our
availability levels and pricing position remain very strong, the
latter improving further through the quarter.
|
Current Trading & Outlook
|
•
|
While Q3 saw resilient growth against
a challenging comparative, growth in our Retail business was not at
the levels we had expected. As such we now expect FY24 Group
underlying PBT3 to be c£132m, which assumes no
sequential improvement in our Retail business LFL run rate through
Q4 as we trade against a period of exceptionally strong trading
last year. Our expectations of our Vet Group performance are
unchanged.
|
|
•
|
Our balance sheet remains robust and
we expect to finish the year in a net cash4 position,
having returned over £100m to shareholders via ordinary dividends
and our ongoing share buyback.
|
Strategic Highlights
|
•
|
Our new digital platform build has
progressed well and we will launch it to consumers in the coming
weeks, having successfully trialled and tested it with a group of
colleagues. The new platform offers a much improved customer
experience and functionality across our app and website and is a
key foundation for future growth, enabling us to deliver a
succession of improvements in the years ahead.
|
|
•
|
Returning accessories to growth is a
key priority for the business and innovation will play a central
role in this. In Q3 we introduced new premium brands including
Lords & Labradors and Cocopup, and launched extended lifestyle
ranges from Pawsome Paws Boutique. Innovation and the introduction
of new ranges that stretch our brand appeal will remain a focus
over the coming year.
|
|
•
|
We continue to drive innovation in
food, introducing new raw dog food brands across the estate, and
will soon commence the roll out of Butternut Box. The transfer to
Cranswick has now successfully completed.
|
|
•
|
Year to date we have now opened 4 new
pet care centres, and completed 33 refits. Within vets, we have
opened 3 new practices, completed 16 extensions and converted 8
company-owned practices to Joint Venture ownership.
|
|
•
|
Strong progress within vet talent,
with improvements in recruitment, vacancy rate (down 33% YoY), and
vet turnover, all underpinning robust consumer revenue performance.
Our third physical clinical academy hub is in progress and we have
made significant strides in our international
recruitment.
|
|
•
|
We have selected our partner for our
new PMS system, Provet, a leading, cloud-based system that will
unlock productivity benefits for our practice partners and enable
better integration of our vets into our pet care platform. Rollout
of the PMS will begin in FY25, after an initial pilot, and take 2
years to complete.
|
|
•
|
In the year, we have fed over 1m pets
for a day through our foodbank partnership with Blue Cross, and
raised over £6m for charities.
|
Lyssa McGowan, Chief Executive Officer,
commented:
"Our colleagues came together over our peak trading period to
deliver a record sales performance, growing against a very strong
performance in the prior year. While a slower market over peak
meant our sales growth didn't quite hit the levels we expected, the
business remains well positioned to benefit from long term growth
in the sector as we continue to win share and grow volumes across
food and deliver differentiated performance through our unique vets
business.
Importantly, we will shortly follow up launching our new
distribution centre with the launch of our new digital platform, in
line with our target. Our new digital platform is a key foundation
of our growth strategy, bringing vastly improved user experience to
our consumers, and creating opportunities to improve cross-sell
into accessories and further grow share of wallet. With these
foundations now in place we are well positioned for the
future."
Conference
Call
Management will host a Q&A
conference call for analysts and investors at 9.30am. To join the
call in
listen-only mode, please click on the
following link (https://brrmedia.news/PETS_Q3FY24).
Those wishing to participate in the Q&A session should email
pets@accordience.com for call details. A
recording will be available at https://www.petsathomeplc.com/investors/results-presentations/.
Our
next scheduled update will be a pre-close update at the end of
March.
|
1.
|
Consumer revenue includes total revenue across the Group
including consumer sales made by Joint Venture vet practices, and
therefore differs to the fee income recognised within Vet Group
revenue.
|
|
2.
|
Like-for-like revenue comprises total revenue in a financial
period compared to revenue achieved in a prior period, for stores,
omnichannel operations, grooming salons, and vet practices that
have been trading for 52 weeks or more.
|
|
3.
|
Underlying profit before tax (PBT) is based on pretax profit
before the impact of 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 nonrecurring
nature, in order to reflect management's view of the performance of
the Group.
|
|
4.
|
Net cash is defined as cash and cash equivalents less loans
and borrowings.
|
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
|
Pets at Home Group Plc:
|
|
|
Natalie Cullington, Head of
Communications
|
+44 (0)
7974 594 701
|
|
Citigate Dewe Rogerson:
|
|
|
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 over 450 pet care centres, many of which also have
vet practices and grooming
salons. The Group also operates a
leading small animal veterinary business, with over 440 veterinary
general practices located both
in our pet care centres and in
standalone locations. For more information visit:
https://www.petsathomeplc.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.
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.