Pets at Home Group Plc, announced its preliminary results for the 53 week period to 31 March 2016 showing profits before tax at £97.3 million, up 9.6% on the previous year and more growth plans for 2017.
According to the statement operational highlights included the VIP club reaching 4.5m members, rollout targets were acheived through opening 20 Pets at Home superstores, 6 Barkers stores and 1 Whiskers ‘n Paws trial format. 50 veterinary practices and 60 grooming salons were added to the business. The company also acquired two specialist veterinary referral centres and a further two post year end.
Ian Kellett, Group Chief Executive Officer, commented: “I am pleased to report another year of good progress. Despite some seasonal challenges to our Health & Hygiene sales, we have seen excellent performance in our strategic growth drivers of Advanced Nutrition, VIP, vet and grooming services. Together with refinancing benefits, this contributed to pre-exceptional earnings per share growth of 11.2%. Our strong cashflow has enabled us to increase the ordinary dividend to shareholders by 39%, to a payout ratio of 50% of earnings, whilst investing for growth through acquisitions of veterinary specialist referral centres.
“We have enjoyed 25 very successful years as a business and enter our 26th year confident in the future. Our colleagues have been central to our success and I thank them for their significant contribution to our results.The pet market has proved over time to be more resilient than general retail, so whilst consumer confidence may be more fragile, we believe our drive to become more specialist and most loved by customers will deliver further progress.”
Included in the results statement is a glimpse at the targets Pets at Home are working towards for this financial year which includes rollout of another 15-20 Pets at Home superstores, 45-55 vet practices, 50-60 grooming salons. it also states: "We are confident in our ability to execute on our strategy through growing like-for-like revenue and rolling out new space. Whilst margins this year will see the impact of weaker sterling and the National Living Wage, over the medium to longer term we believe these challenges will be outweighed by the support from our growing services business, which is still maturing. Trading to date in the first quarter of FY17 is in line with our expectations."
Here are the numbers from the preliminary statement:
Financial summary and highlights
GBPm | FY16 | FY16 | FY15 | Growth |
| Audited 53 weeks to 31March 2016 | Proforma 52 weeks to 24March 2016 | Audited 52 weeks to 26 March 2015 | On proforma 52 weeks to 24March 2016 |
Group like-for-like revenue growth1 | 2.1% | 2.2% | 4.2% | |
Merchandise like-for-like | 1.4% | 1.5% | 3.7% | |
Services like-for-like | 10.0% | 10.4% | 10.7% | |
| | | | |
Group revenue | 793.1 | 777.8 | 729.1 | 6.7% |
Merchandise revenue | 710.2 | 696.5 | 666.1 | 4.6% |
Services revenue | 82.9 | 81.3 | 63.0 | 29.2% |
| | | | |
Group gross margin | 54.5% | 54.5% | 54.2% | 31 bps |
Pre exceptional EBITDA2 | 127.4 | 124.7 | 119.6 | 4.2% |
Pre exceptional PBT3 | 97.3 | 95.3 | 87.0 | 9.6% |
Statutory PBT | 92.1 | 90.2 | 87.0 | 3.7% |
Pre exceptional basic EPS3 (pence) | 15.4 | 15.1 | 13.5 | 11.2% |
1. “52 weeks” represents LFL sales for the 52 week period to 24 March 2016 compared with the 52 week period to 26 March 2015. “53 weeks” represents LFL sales for the 53 week period to 31 March 2016, compared with the 53 week period to 2 April 2015
2. Excludes £0.8m of M&A related exceptional expenses 3. Excludes £0.8m of M&A related exceptional expenses and an exceptional finance expense of £4.3m associated with the amortisation of capitalised fees from the previous finance facility
· Merchandise: Food revenue growth 6.4%, including Advanced Nutrition revenue up 12.3%. Accessories revenue growth 2.4% (52 week)
· Services: Fee income from Joint Venture veterinary practices up 22.3% (52 week)
· Strong free cashflow generation of £77.8m, deleveraging to 1.2x net debt/EBITDA2 (52 week)
· Total dividend payable 7.5 pence per share, up 39%, reflecting payout ratio increased to 50% of earnings
