TIDMPETS
RNS Number : 8280G
Pets At Home Group Plc
29 July 2021
FOR IMMEDIATE RELEASE, 29 JULY 2021
Pets at Home Group plc: Q1 FY22 Trading Statement
Continuation of strong sales momentum
Pets at Home Group plc, the UK's leading pet care business, is
pleased to provide a trading update covering the 16 week period
from 26 March to 15 July 2021, compared to the 16 week period from
27 March to 16 July 2020.
Financial highlights
LFL Sales Growth(#) FY20 FY21 FY22
--------------------- ------------------------------- ------
Q1 Q1 Q2 Q3 Q4 Q1
--------------------- ------- ------ ------ ------ ------
1-year LFL:
Retail 8.2% 0.4% 12.5% 17.5% 6.1% 29.1%
Vet Group 6.2% (9.3)% 14.2% 17.8% 16.3% 44.7%
Group 8.0% (0.7)% 12.7% 17.6% 6.9% 30.2%
--------------------- ------ ------- ------ ------ ------ ------
2-year LFL(#) (#) :
Retail 13.8% 8.6% 20.7% 25.9% 22.9% 29.6%
Vet Group 19.6% (4.2)% 21.7% 27.2% 13.1% 25.9%
Group 14.4% 7.2% 20.8% 26.0% 22.1% 29.4%
--------------------- ------ ------- ------ ------ ------ ------
(#) All like-for-like (LFL) sales figures are based on statutory
revenue. Within the Vet Group this includes Joint Venture (JV) fee
income, sales from company managed practices, and sales from our
Specialist Group up until the date of disposal, 31 December 2020.
(##) The start of the comparative quarter coincided almost exactly
with implementation of the first national lockdown, resulting in a
period that was impacted by wide-ranging operational and regulatory
restrictions across both our stores and services. We are,
therefore, presenting comparative numbers on both a one and
two-year basis to aid meaningful comparison.
-- Total Group revenue growth of 25.7% to GBP377.8m, with Group
like-for-like(1) (LFL) revenue up 30.2%, or 29.4% on a 2-year
basis, reflecting broad-based growth throughout the quarter and
continued strong growth across both retail and veterinary
operations.
o Retail revenue growth of 29.1%, and LFL(1) revenue up 29.1%
(29.6% on a 2-year basis) with good growth across both food and
accessories, instore and online, despite the re-opening of
non-essential retail and hospitality sectors during the
quarter.
o Omnichannel(2) revenue growth of 21.4%, or 107.5% on a 2-year
basis. Participation of Retail revenue of 15.6% across the quarter,
compared to 16.6% in the comparative period and 15.8% for FY21.
o Vet Group LFL(1) revenue growth of 44.7%, with 2-year LFL(1)
revenue growth of 25.9%. Our programme of fee adjustments fully
annualised as planned during FY21, resulting in closer alignment of
LFL(1) growth in Joint Venture (JV) customer sales and JV fee
income in the current quarter, at 44.5% and 48.1% respectively.
The strong performance across our veterinary operations
continued through the quarter, with customer sales across First
Opinion practices approximately 30% higher on a 2-year basis. The
number of profitable practices continued to increase, with the
balance of operating loans reducing further post year end.
-- Notwithstanding an increasingly challenging cost environment,
including the ongoing impact of the pandemic on operating costs,
which we continue to estimate at GBP9m this financial year, we
maintained our price competitiveness through the quarter, with good
profit and cash conversion reflecting a higher number of store
transactions and strong growth in accessories sales, as well as the
strong sales performance from the Vet Group.
-- Based on trading year to date we now anticipate that
full-year Group underlying pre-tax profit will be GBP130m, at the
top end of the current range of analyst expectations*, representing
a GBP42.5m (+49%) increase on the prior year.
(*) As at 28 July 2021, the company-compiled consensus estimate
of analyst expectations for the 53-weeks FY22 full-year post
IFRS-16 underlying pre-tax profit was GBP126m, with a range of
GBP123m to GBP130m.
Strategic highlights
The UK pet care market is robust, with the ongoing increase in
pet ownership, combined with the prevailing trends of pet renewal,
humanisation and premiumisation, creating a long-term tailwind for
growth across both the underlying market and our business. During
the quarter, we continued to invest in our ecosystem and implement
initiatives to drive productivity gains across our operations.
I. Continued growth across our pet care ecosystem
-- The number of active VIPs increased 17% YoY to 6.6m.
-- 26% of all VIPs shopped across more than one channel during the quarter, up 18% YoY.
-- The number of Puppy and Kitten Club members grew 167% YoY,
with our TV campaign helping to generate our strongest ever week of
new sign-ups during the quarter.
-- New client registrations across our First Opinion veterinary
practices remained strong, averaging over 10,000 per week.
-- The number of subscription plans(4) across the Group grew 24%
YoY to over 1.3m, generating over GBP100m in annualised recurring
customer sales.
II. Investing to grow the Pets at Home ecosystem
We continue to be laser-focused in the execution of our
strategic priorities to become the best pet care business in the
world.
-- We are mobilising on "Polestar", our digital transformation
programme, and, with our first three agile squads of engineers and
designers now formed and our partners on-boarded, have commenced
the initial sprints to create this transition in our digital
capability. "Polestar" is an agile programme which is planned to
deliver customer value through defined phases over the next 18
months, starting with the development of our mobile customer app,
to make shopping with us easier and more convenient, and a single
customer login to enable frictionless access to all of our pet care
services.
-- Development of our new storage and distribution facility in
Stafford commenced at the end of the quarter. Scheduled to become
fully operational in Summer 2023, our design initiatives
incorporate a modular approach to automation, giving maximum
flexibility in stock holding and fulfilment capacity, as well as a
clear focus on sustainability, targeting a BREEAM rating for the
build of "Excellent" and including the use of LED lighting, solar
energy, rainwater harvesting and maximising biodiversity.
Consolidation of our two legacy distribution facilities will be
carefully timed to minimise operational disruption.
-- Our store regeneration programme continued during the
quarter, with two new pet care centres in Handforth and
Clacton-on-Sea featuring our latest thinking on digital
functionality, multi-use event space and our services proposition.
The Handforth pet care centre is also the first to incorporate our
new vet operating concept, using innovation to deliver clinical
working efficiencies and an enhanced client experience. We are also
progressing our store rollout opportunity within Greater London,
with two new sites scheduled for opening during the second half of
this year.
III. Initiatives to drive productivity gains across our
operations
We, like many others, are witnessing a number of inflationary
pressures across the supply chain, most notably on freight rates,
and are proactively mitigating these challenges through specific
initiatives to increase operational efficiency across our
business.
-- Our programme of rent renegotiations continues, with recently
negotiated reductions typically in excess of 20%.
-- Our work to reduce the costs of goods not for resale (GNFR)
continues and a new project to improve product availability and
lower fulfilment costs commenced during the quarter.
-- Our trial to deliver orders placed online from store stock,
utilising our store estate more effectively as a distribution
network, commenced at the end of July, and, once scaled, is
expected to generate cost efficiencies relative to our existing,
centrally fulfilled model.
IV. Continuing to meet our obligations as a responsible
corporate citizen
Meeting our obligations as a responsible corporate citizen
remains paramount and we made encouraging progress in the quarter
across our three pillars of planet, pets and people.
-- Planet: We commenced the rollout of in-store recycling units
for pet food packaging during the quarter, utilising an
industry-first pyrolysis process to recycle flexible, rigid and
complex plastics, and plan to extend these units into the majority
of our stores over the next 18 months.
-- Pets: The Pets at Home Foundation awarded 28 grants to
charities totalling GBP0.3m during the quarter. The Foundation
recently broadened the number of charities it could support to
include those which help people through pets.
-- People: In partnership with the Prince's Trust, Pets at Home
is supporting the Government's Kickstart programme to provide work
opportunities to young people. We currently have 71 "kickstarters"
working in a variety of roles across our business, and plan to
extend this to over 200 roles this year.
Peter Pritchard, Group Chief Executive Officer, commented:
It is pleasing to note that many of the positive trends from our
last financial year have accelerated in the current quarter. Key
indicators point to continued growth in pet ownership, providing a
supportive backdrop to long-term growth across the underlying
market and our business, and we continue to see strong growth in
new customers, subscription plans and veterinary clients. I remain
incredibly grateful to all our colleagues and Partners across the
Group for their continuous hard work and excellent customer
service.
Our unique, omnichannel pet care strategy continues to deliver,
with strong momentum across both sides of our business, as well as
good progress against our strategic priorities, meaning we look to
the future with much confidence.
- End of announcement -
Conference call
A conference call for analysts and investors will be held at
09.00am today. To join the call in listen-only mode, please click
on the following link ( https://brrmedia.news/PETS_FY22Q1 ). Those
wishing to participate in the Q&A session should email
petsathome-Maitland@maitland.co.uk for details. A recording will be
available at http://investors.petsathome .
Strategic Key Performance Indicators
Q1 FY22 Q1 FY21 YoY change
Number of customer transactions
(m) 20.4 15.2 34.6%
------------------------------------ -----------
Customer sales(3) from services(5) 33.2% 31.8% 141bps
------------------------------------ -----------
VIP customer sales(3,6) (GBPm) 1,002.9 798.5 25.6%
------------------------------------ -------- -------- -----------
Customer sales(3) per colleague
(GBPk) 63.8 48.9 30.5%
------------------------------------ -------- -------- -----------
1. Like-for-like growth 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.
2. Defined as orders placed online at petsathome.com and
in-store using our order-in-store service, plus subscriptions to
monthly flea & worm treatments via the 'Subscribe & Save'
platform.
3. Defined as statutory Group revenue, but excluding Joint
Venture fee income recognised within Vet Group revenue and
including the gross customer sales made by these Joint Venture
practices instead
4. Defined as total number of plans across Vet Group health
plans, or omnichannel subscription platforms Easy Repeat and
Subscribe & Save
5. Defined as gross customer sales made by JV vet practices,
revenue from our Specialist Referral centres (up until the date of
disposal on 31 December 2020) and company managed vet practices,
grooming services, subscriptions, pet sales and pet insurance
commissions
6. VIP customer sales are shown on a rolling 12 month basis rather than a year-to-date basis
Investor Relations Enquiries
Pets at Home Group plc:
Roger Tejwani, Director of Investor Relations & External
Communication
+44 (0)1279 927022
Chris Ridgway, Head of Investor Relations
+44 (0)7788 783925
Media Enquiries
Pets at Home Group plc:
Natalie Cullington, Head of Media & Corporate Affairs
+44 (0)7786 927811
Maitland/AMO:
Clinton Manning
+44 (0)7711 972662
Joanna Davidson
+44 (0)7827 254567
About Pets at Home
Pets at Home Group plc is the UK's leading pet care business;
our commitment is to make sure pets and their owners get the very
best advice, products and care. Pet products are available online
or from our 452 stores, many of which also have vet practices and
grooming salons. Pets at Home also operates a UK leading small
animal veterinary business, with 442 First Opinion practices
located both in our stores 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.
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