Pets at Home’s new distribution centre in Stafford is now fulfilling deliveries to all of its stores throughout the UK after experiencing early disruption issues after opening in April.

The largest pet retail group in the country admitted in its half-year financial figures that sales were impacted by short-term availability issues caused by problems at the distribution centre. However, the impact was contained and swiftly corrected with availability having now normalised.

Pets at Home’s Chief Executive Officer, Lyssa McGowan, at the opening of the group's £93m distribution centre in April.

Lyssa McGowan, Chief Executive Officer, said “H1 has been a critical period in laying the foundations of our platform for future growth. This was the period of high activity when we relaunched our brand, launched our new DC, built our new digital platform, and made progress expanding and improving our physical assets across Retail and Vets. This period has not been without challenges, but we have been able to manage these well and are on track to finish FY24 with a refreshed, modernised infrastructure, fit to deliver growth for many years to come.

“I am incredibly proud of how our colleagues across the business have come together using their expertise and ingenuity to navigate this demanding period. I was particularly proud to see this recognised as we were voted “Best Place to Work” in the WorkL awards. We remain absolutely committed to keeping Pets at Home an inclusive and rewarding place to work and made pleasing progress in H1 increasing diversity.

As we stand today, through our point of peak investment, with the benefits of our new DC and new digital platform still ahead of us, we look to the future with confidence that we can deliver our plan, to build the world’s best pet care platform.”

Pets at Home Group Plc: FY24 Interim Results (for the 28-week period to 12 October 2023)

Highlights

• H1 was the period of highest execution risk in building our Petcare Platform as we relaunched our brand, transitioned our stores to the new Stafford Distribution Centre (DC) and continued to build a new digital platform.
• H1 consumer revenue# grew 8.6%, ahead of our 7% ambition, to £1.0bn, with all channels in growth and further progress in retaining and acquiring new customers. Underlying consumer demand was resilient with structural trends underpinning sustained market growth.
• We finished H1 with 7.8m active VIP members, up 3% YoY. Puppy & Kitten sign ups continued to normalise as expected. However, new sign-ups in our vets remained strong at over 18k per week, as early life pet acquisition was increasingly complemented by winning new clients with older pets, attracted by our compelling consumer proposition.
• Total Group revenue growth of 6.5% to £774.2m, with Group like-for-like# (LFL) revenue up 6.2%.
• Vet Group revenue grew 19.0%, and LFL# up 17.3%, accelerating in Q2, with record sales supported by higher Average Transaction Value (ATV), mix and visits as we increased vet capacity through improved attraction, retention, and productivity.
• Retail revenue grew 5.2%, and LFL# up 5.2%. After Q1 LFL growth of 7.1%, sales in Q2 were impacted by short term availability issues as the DC ramped up, causing LFL growth to dip to 2.7%.
• The impact was contained and swiftly corrected with availability having now normalised and the early weeks of Q3 showing a c4% LFL.
• Underlying PBT# of £47.8m is down 19.3%, impacted by continued investment in the platform with higher logistics costs (c£8m) and our brand relaunch (c£2m). This shape of H1/H2 profits was broadly as expected, as we outlined at Q1.
• Statutory PBT was £34.7m, down 35.2% reflecting the decline in underlying PBT and non-underlying costs of £13.1m associated with our DC transition, the consolidation of our support offices and a write down of our investment in Tailster.
• Underlying basic EPS was 7.4p, down 22.9%, and statutory basic EPS was 5.2p, down 40.2%.
• Interim dividend per share held at 4.5p.
• Free cash flow# down 44.3% to £23.1m reflecting YoY profit shape and the phasing of investments into our key strategic growth areas.
• Balance sheet remains robust with net cash# of £12.1m (before lease liabilities of £398.1m). Cash and cash equivalents £60.4m at the end of H1, down £82.7m YoY.
• First £25m tranche of our buyback is completed, with the second £25m tranche to commence shortly.