Pets at Home laps up customer spending to invest in its premises
Pets at Home is continuing to plough capital into its new distribution centre and store refurbishment programme as customer spending remains resilient.
The company saw profits for the half-year fall by 9% to £59m compared with the first half last year, which it attributed to increased freight and energy costs and the year-on-year increase in investment in digital assets.
However, the boom in pet ownership seen during the coronavirus pandemic continues to feed through to sales. Customer spending remains robust and pushed revenue for the half-year to 13 October up by 7% to £727m.
Pets at Home is continuing to plough capital into its new distribution centre and store refurbishment programme as customer spending remains resilient.
The company saw profits for the half-year fall by 9% to £59m compared with the first half last year, which it attributed to increased freight and energy costs and the year-on-year increase in investment in digital assets.
However, the boom in pet ownership seen during the coronavirus pandemic continues to feed through to sales. Customer spending remains robust and pushed revenue for the half-year to 13 October up by 7% to £727m.
New chief executive Lyssa McGowan said: “We continue to expect full-year group underlying profit before tax to be in line with analyst consensus, despite the challenging macroeconomic environment. Consensus is currently £131m, with a range of £121m-£136m. The business remains highly cash generative, and we expect to finish the year in a net cash position.”
McGowan said the company’s new 760,000 sq ft distribution centre, which is being developed by Stoford at the Stafford North Business Park, is still on course to open in summer 2023.
It is also investing in its stores, with 65 of its 457 outlets being refurbished and plans in place to revamp a further 40 per year and launch five new pet care centres per year over the medium term.
The business also operates 444 veterinary general practices located both within its stores and in stand-alone locations and is working to further integrate these with its retail operation.
Matt Walton, retail analyst at GlobalData, said: “Higher levels of pet ownership and Pets at Home’s ability to recruit and retain shoppers has helped it record a buoyant top line performance [for the half-year].” He highlighted the success of its Puppy and Kitten Club, which offers new pet owners advice and offers and averaged 29,000 sign-ups per week in Q2, and its VIP programme, which now boasts 7.6m members.
Walton added: “With spend coming under greater pressure, having this reserve of loyal customers becomes especially pertinent, as they offer a consistent revenue stream but can also help recruit future customers through recommendations.”
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