Pets at Home profits spike in ‘strong’ first half

The retailer’s pre-tax profits surged more than four-fold on a statutory basis during the 28 weeks to October 10. Including the impact of new IFRS16 accounting measures, pre-tax profit surged to £34m from £8m a year ago.

On an underlying basis, pre-tax profit increased 10.2% to £41.7m.

Pets at Home said group revenue, including its growing services business, advanced 9.4% to £546.3m during the six month-period. On a like-for-like basis, revenues were up 7.6%.

The pet specialist hailed “sustained momentum” in its core retail business, where like-for-likes surged 7.8% and total sales increased 8.1% to £479.8m.

Revenues from its veterinary division jumped 19.6% to £66.5m.

Pets at Home has been driving that services proposition as a crucial part of its plan to become “the best pet care business in the world”.

The retailer launched the strategy a year ago and said it was delivering “strong results” despite the “backdrop of continued consumer uncertainty”.

It ultimately plans to rake in 50% of group sales from pet services such as vets, its specialist referral division and grooming parlours.

Pets at Home also hailed the impact of its VIP loyalty club. The number of VIP customers who purchase both products and services from the business grew 22% year-on-year, with around 16% of all active VIP members now spending across both divisions of the business.

It added that the number of subscription customers has now reached 790,000 as it bids to create loyalty among its shopper base.

Pets at Home boss Peter Pritchard said: “I am very pleased with what we have achieved in the first half of the year. We have executed our plans well, and this has been reflected in the strong customer sales growth across the group.”

Pritchard added: “We have much to look forward to in FY20 and beyond, and we now expect to return to profit growth a year ahead of our original plan. In the meantime, we will remain focussed on serving our customers, their pets and our partners better than ever before.”

As part of the results statement, Pets at Home revealed that chair Tony DeNunzio would be stepping down after almost 10 years in the role.

The former Asda boss said now was the “appropriate time to commence a succession plan”.

Pets at Home said it would consider external candidates as well as current non-executive directors, but did not give a timeline on when a new chair would be appointed. DeNunzio will continue in the role until a successor is found.