Pets at Home profits jump despite dip in retail sales

Pets at Home has seen its pre-tax profits rise by 14.1% to £120.6m in the 12 months to 27 March, up from £105.7m the year before, as the group described it as a year of ‘profound transformation’.

The surge in profits was driven by a strong performance in its vets business, with pre-tax profits up 23% to £75.9m and sales up 13% to £655m.

But the company’s retail business took a hit as consumer sales dropped 1.8% to £1.3bn and profits plunged 16% to £72.9m.

Lyssa McGowan, Chief Executive Officer, said: “The past two years have seen a profound transformation at Pets at Home. We have moved from a business with a strong presence in pet retail and vets, to a true pet care platform.

“We now have a platform that is fit for the future and capable of delivering sustained outperformance and market share gains through delighting consumers and increasingly fulfilling all of their pet care needs. During this period of transformation, we have completely replatformed our digital infrastructure, built new capabilities around our data, brand and marketing, and simplified our distribution network to a single distribution centre fulfilling stores, online and subscriptions, and we have achieved this against the backdrop of a normalising pet care market and low consumer confidence.

“In FY25, we also saw another outstanding year of growth in our vets business, fuelled by the commitment and expertise of our partners, supported by our best-in-class scale services, platform benefits and industry knowhow. Our practices significantly outperformed a more subdued industry backdrop and delivered this progress despite the ongoing uncertainty of the CMA investigation – further demonstration of the power of our unique joint venture model.

“I am tremendously proud of our colleagues and partners for navigating this challenging but critical period which leaves us in a position to look to the future with confidence. While FY26 comes with its own challenges as we digest externally imposed cost headwinds and heightened macro uncertainty, our objective is clear – to deliver outperformance against our underlying markets, across our business.”

Financial Highlights

Group consumer revenue up 2.7% to £1.96bn, against a subdued but resilient market backdrop.
Vet Group consumer revenue up 13.0%, record sales supported by high quality growth driven by higher visits, average transaction values and significant growth in Care Plan revenues.
Retail consumer revenue down 1.8%, impacted by a period of subdued growth in the pet sector due to a soft UK consumer backdrop throughout FY25, deflation and normalising levels of new pet ownership. In addition, we saw some transitionary impacts from our digital platform launch. However, the fundamentals of the business remain healthy with consumer satisfaction improving through the year.
Total Group statutory revenues up 0.1% to £1.48bn, with Group like-for-like# (LFL) revenue -0.4%. Vet Group revenues up +16.8% (LFL# +16.2%) to £175.3m, with Retail revenues -1.8% (LFL# -2.0%) to £1.31bn.
Group underlying PBT of £133.0m, up 0.7% YoY, in line with guidance, with Group underlying PBT margin +5bps.
Vet Group underlying PBT of £75.9m up 23.3%, driven by the increase in fee income YoY whilst maintaining a broadly flat cost base.
Retail underlying PBT of £72.9m down 16.6%, driven by the impact of lower revenues with gross margins broadly stable and good cost control.
Group statutory PBT £120.6m, up 14.1% with the underlying profit fall offset by a £13.9m reduction in non-underlying costs YoY to £12.4m in FY25.
Underlying EPS 21.0p, up 1.6% with a 1.4% underlying profit for the period decline, offset by 3.0% share buyback accretion.
Total dividend per share of 13.0p (up 1.6%), final dividend held at 8.3p.
Free cash flow up 21.5% to £83.8m, reflecting the increase in underlying PBT#, lower non-underlying costs and lower share purchases linked to our employee benefit trust (EBT).
Vet Group £67.5m up 15.8% driven by strong sales growth, leveraged through our capital light model.
Retail £30.6m up 14.6% with lower non-underlying costs helping offset lower underlying profits.
Balance sheet remains robust with adjusted net cash# of £6.2m (FY24: £8.8m), before lease liabilities of £348.3m. Cash and cash equivalents of £39.5m at the end of the year (FY24: £57.1m).
£25m share buyback announced for FY26, having already completed £125m in buybacks in last 3 years.

Strategic Highlights

FY25 was a year of strategic progress against a more challenging macro backdrop. Importantly, the key elements of our strategy are now complete and will underpin future growth. Highlights include:

Pets Club members grew 5% to 8.2m helped in part by auto-enrolment on the new digital platform, further increasing our active consumer base from which we can drive share of wallet gains in the future.
Our retained consumers continue to see higher ACV3 – faster consumer growth than anticipated diluted our total consumer ACV3 (down 2% to £175) but retained consumer ACV3 growing 1% to £216.
Digital platform fully transitioned providing the foundations to leverage our Pets Club data to drive an increasingly personalised consumer experience.
Distribution network optimisation complete, with all sales channels now being fully serviced by our single site distribution centre in Stafford.
Subscription revenues +30%, with 13.0% (from 10.0%) of Group Consumer revenue# now generated via subscriptions. Particularly strong growth across Easy Repeat and Care Plans as our improved offer and functionality resonates with consumers.
Retail consumer satisfaction +10pts since start of year driven by improvements in availability, service and value for money.
Further growth in vet footprint – 3 new JV practices and 15 JV extensions completed in the year with accelerated ambitions for future supported by a robust partner pipeline. In FY26 we plan to open at least 10 new JV practices alongside 15 extensions.
Continued investment in our Pet Care Centres with 4 new openings and 32 Pet Care Centre refits including 4 major refits in our new trial format.
Progressed our sustainability agenda – In partnership with Meatly we supported the launch of the world’s first cultivated meat dog treat and over 250 own brand pet food ranges have been carbon footprinted.