TIDMPETS
RNS Number : 6174Z
Pets At Home Group Plc
26 January 2022
FOR IMMEDIATE RELEASE, 26 JANUARY 2022
Pets at Home Group Plc: Q3 FY22 Trading Statement
Continuing growth momentum underpins further upgrade to profit
guidance
Pets at Home Group Plc, the UK's leading pet care business, is
pleased to provide a trading update covering the 12-week period
from 8 October to 30 December 2021, compared to the 12-week period
from 9 October to 31 December 2020.
Financial highlights
LFL Revenue Growth(#*) FY22
---------------------------------------
Q1 Q2 H1 Q3 Q3 YTD
1-year LFL:
Retail 29.1% 13.8% 21.9% 9.0% 17.4%
Vet Group 44.7% 8.4% 26.2% 4.0% 18.8%
Group 30.2% 13.4% 22.2% 8.7% 17.5%
2-year LFL:
Retail 29.6% 28.1% 28.9% 28.4% 28.8%
Vet Group 25.9% 21.2% 23.8% 23.3% 23.6%
Group 29.4% 27.6% 28.6% 28.1% 28.4%
------------------------ ------ ------ ------ ------ -------
(#) All like-for-like (LFL) revenue figures are based on
statutory revenue. Within the Vet Group this includes Joint Venture
(JV) fee income and revenue from company managed practices. *To
provide a better understanding of underlying performance, the table
above shows comparative numbers on both a one and two-year
basis
-- Total Group revenue growth of 5.8% to GBP319.4m, with Group
like-for-like (LFL(1) ) revenue +8.7%, or +28.1% on a 2-year basis,
with the growth in 2-year LFL(1) quarter-on-quarter reflecting
sustained momentum across both parts of the business.
o Retail revenue growth of 9.8%, with LFL(1) revenue +9.0%
(2-year LFL(1) +28.4%) and store LFL revenue +7.4% (2-year LFL(1)
+21.1%), reflecting continued strong volume growth across key
categories and channels and ongoing pet humanisation and
premiumisation supporting record sell-through of seasonal
ranges.
o Omnichannel(2) revenue growth of 16.7% or +99.3% on a 2-year
basis; Participation of total Retail revenue of 15.9% across the
quarter, compared to 14.9% in the comparative period and 10.3% two
years ago.
o Vet Group LFL(1) revenue growth of 4.0%, (2-year LFL(1)
+23.3%). LFL(1) customer sales(3) growth across all First Opinion
practices of 5.7% (2-year LFL(1) +29.9%), and LFL(1) Joint Venture
fee income up 7.4% (2-year LFL(1) +25.3%).
-- Net cash of GBP76.6m, including GBP19.6m from the earlier
than anticipated receipt of deferred consideration relating to the
disposal of our Specialist Group in December 2020.
-- With this strong continued momentum into our final quarter,
we now anticipate that FY22 Group underlying pre-tax profit,
excluding any potential impact from accounting changes, (##) will
be at least GBP140m**.
(##) In light of the clarification from the IFRS Interpretations
Committee regarding how companies should account for configuration
and customisation costs relating to cloud computing arrangements,
including Software as a Service (SaaS), we are reviewing the impact
this may have on full-year reported PBT, although no impact is
expected on full-year cash flow.
**As at 25 January 2022, the company-compiled consensus estimate
of analyst expectations for the 53-weeks FY22 full-year post
IFRS-16 underlying pre-tax profit was GBP135m, with a range of
GBP134m to GBP137m.
Strategic highlights
-- The UK pet care market remains robust, with strong continued
growth in new pet owner customers, and prevailing customer themes
of long-term pet ownership, humanisation and premiumisation,
creating a sustainable tailwind for growth across our business.
I. Sustained growth across our pet care ecosystem
-- The number of active VIPs(4) increased 13% YoY to 7.0m; an
increase of 1.7m (+34%) on a 2-year basis.
-- 27% of all VIPs shopped across more than one channel during the quarter, up 18% YoY.
-- The number of Puppy and Kitten Club members grew 60% YoY,
with year-to-date average weekly registrations of approximately
24,000, compared to approximately 15,000 across the same period in
the prior year. Puppy and Kitten Club members typically spend a
third more than non-members across the Group.
-- New client registrations across our First Opinion veterinary
practices remained strong, averaging approximately 9,200 per week
year-to-date compared to approximately 9,000 across the same period
in the prior year.
-- Continued strong growth YoY in the number of pet care plan
subscriptions(5) across the Group, with more than 1.4m plans now
generating over GBP115m in annualised recurring customer
revenue.
II. Investing to grow the Pets at Home ecosystem
-- We continue to build the foundational capability of our
transformational digital initiative ("Polestar"), with the imminent
launch of single login functionality enabling frictionless customer
access to all of our pet products and services.
-- Our deliver from store capability broadened during the
quarter and, in conjunction with our one-hour Click and Collect
service, is already enabling us to fulfil approximately one third
of online orders through our store network, embedding best-in-class
fulfilment for customers and generating operational efficiencies
relative to a fully centralised model.
-- We opened two new pet care centres in the period (Brighton
and Guildford), taking our estate to 455 stores, and development of
our new storage and distribution facility in Stafford continued at
pace.
-- In our vet operations, early indications of the positive
impact our pioneering veterinary model ("Pathfinder") is having on
utilisation of clinical resource and client engagement support
ongoing rollout across veterinary practices.
III. Well placed to mitigate industry-wide inflationary
pressures
We, like many others, are witnessing a number of inflationary
pressures across the supply chain. While we are not immune to these
challenges, we are proactively mitigating them through a series of
planned initiatives targeting rent reductions, procurement savings
and operational efficiencies across our business, and we continue
to work closely with our supplier base to achieve the operational
and purchasing synergies that enable us to maintain our competitive
price index.
IV. A strong commitment to corporate citizenship
We continued the rollout of collection units for the recycling
of pet food packaging across almost 150 stores, with plans to
extend this across much of our store estate by Summer 2022. The
Pets at Home Foundation awarded grants and donations to charities
totalling approximately GBP0.8m during the quarter, and our annual
Christmas charity campaign, 'Santa Paws', raised a record
GBP2.1m.
V. Management succession
In November 2021, Pets at Home announced that after eleven years
in the business, Peter Pritchard had informed the Board of his
intention to step down from his role as Chief Executive Officer and
director of the Company in Summer 2022. The search for his
successor is well advanced and a further announcement will be made
in due course.
Jane Balmain, Chief Operating Officer of the Vet Group, has
signalled her intention to retire from the business by Spring 2023,
having re-joined Pets at Home out of retirement over three years
ago to lead the successful turnaround of our veterinary operations.
A seach for her successor will commence shortly.
Peter Pritchard, Group Chief Executive Officer, commented:
"Our unique, omnichannel pet care strategy continues to deliver
strong revenue growth, reflecting continued momentum in customer
acquisition, engagement and spend as the benefits of our ongoing
investment in capacity and capability really start to deliver.
"We are firmly on track to report a record year of sales and
profit growth, and I am incredibly grateful to all of our fantastic
colleagues and Partners across the Group for their hard work and
commitment to helping us become the best pet care business in the
world.
I remain confident that the combination of our strategic
investments, strength and depth of our exceptional leadership team
and successful initiatives to increase operational efficiencies
across the Group will underpin sustainable, long-term and
profitable growth".
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulations (Regulation (EU)
No.596/2014). For the purposes of MAR and Article 2 of Commission
Implementing Regulation (EU) 2016/1055, this announcement is being
made on behalf of the Company by Roger Tejwani, Director of
Investor Relations & External Communication.
- End of announcement -
Conference call
A conference call for analysts and investors will be held at
09.00am today. To join the call in listen-only mode, please follow
the following link ( https://brrmedia.news/petsfy22 ). Those
wishing to participate in the Q&A session should email
petsathome-Maitland@maitland.co.uk for details. A recording will be
available at http://investors.petsathome.com
Strategic Key Performance Indicators
Measure Q3 YTD FY22 Q3 YTD FY21 YoY change
Number of active VIPs(4) (m) 7.0 6.2 13.0%
--------------------------------------- -----------------
Customer revenue(3) from services(6)
(GBPm) 402.8 363.3 10.8%
31.9% 33.0% (117)bps
--------------------------------------- -----------------
VIP customer revenue(3,7) (GBPm) 1,086.1 886.4 22.5%
--------------------------------------- ------------ ------------ -----------------
Customer revenue(3) per FTE colleague
(GBPk) 154.9 143.1 8.3%
--------------------------------------- ------------ ------------ -----------------
1. Like-for-like growth comprises total revenue in a financial
period compared to revenue achieved in a prior period, for stores,
omnichannel operations, grooming salons, and vet practices that
have been trading for 52 weeks or more.
2. Defined as orders placed online at petsathome.com and
in-store using our order-in-store service, plus subscriptions to
monthly flea & worm treatments via the 'Subscribe & Save'
platform.
3. Includes customer sales made by Joint Venture vet practices,
rather than the fee income recognised within Vet Group revenue.
4. Number of VIP loyalty club members who transacted across the
group in the last 52 weeks from end of the reporting period.
5. Defined as customers signed up to a Vet Group health plan, or
omnichannel subscription platforms Easy Repeat and Subscribe &
Save.
6. Defined as customer sales made by Joint Venture vet
practices, revenue from our Specialist Referral centres (up until
the date of disposal on 31 December 2020) and company managed vet
practices, grooming services, subscriptions, live pet sales and pet
insurance commissions.
7. VIP customer revenue is shown on a rolling 12-month basis and
includes spend at First Opinion vet practices.
Investor Relations Enquiries
Pets at Home Group Plc:
Roger Tejwani, Director of Investor Relations & External
Communication
+44 (0)1279 927022
Chris Ridgway, Head of Investor Relations
+44 (0)7788 783925
Media Enquiries
Pets at Home Group Plc:
Natalie Cullington, Head of Media & Corporate Affairs
+44 (0)7974 594 701
Maitland/AMO:
Clinton Manning
+44 (0)7711 972662
Joanna Davidson
+44 (0)7827 254567
About Pets at Home
Pets at Home Group Plc is the UK's leading pet care business;
our commitment is to make sure pets and their owners get the very
best advice, products and care. Pet products are available online
or from our 455 stores, many of which also have vet practices and
grooming salons. Pets at Home also operates a UK leading small
animal veterinary business, with 442 First Opinion practices
located both in our stores and in standalone locations. For more
information visit: http://investors.petsathome.com/
Disclaimer
This trading statement does not constitute an invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any
Pets at Home Group Plc shares or other securities nor should it
form the basis of or be relied on in connection with any contract
or commitment whatsoever. It does not constitute a recommendation
regarding any securities. Past performance, including the price at
which the Company's securities have been bought or sold in the
past, is no guide to future performance and persons needing advice
should consult an independent financial adviser. Certain statements
in this trading statement constitute forward-looking statements.
Any statement in this document that is not a statement of
historical fact including, without limitation, those regarding the
Company's future plans and expectations, operations, financial
performance, financial condition and business is a forward-looking
statement. Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
These and other factors could adversely affect the outcome and
financial effects of the plans and events described in this
statement. As a result you are cautioned not to place reliance on
such forward-looking statements. Nothing in this statement should
be construed as a profit forecast.
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