Britain is a nation of animal lovers, and Pets at Home (PETS) is certainly capitalising on this. The retailer and veterinary group enjoyed 4 per cent like-for-like sales growth in the first half of the year, and generated an 11 per cent increase in underlying cash profits to £58.6m.
All categories traded well, but there were a few standout performers, including the group's own Advanced Nutrition pet food range and the services division, which includes veterinary and grooming salons. Sales in the latter jumped 27 per cent to £33.2m. That mainly reflected the launch of 26 new vet clinics and 23 new groom rooms, but existing outlets also generated strong revenue growth as they became more established in local markets. The division also benefited from cost savings following the integration of Vets4Pets, which boosted the gross margin from 26 to 32 per cent.
Group cash generation increased significantly, prompting management to announce the company's first dividend payment. Overall, Pets remains on track with its strategy to expand like-for-like sales, roll out new stores and improve margins. Unlike elsewhere on the high street, Christmas isn't really a peak time of year for Pets, but pet advent calendars and stockings sell well, says chief executive Nick Wood.
Prior to the results, Bank of America Merrill Lynch was expecting EPS of 14p for the full year, up from a 7p loss last year.
| PETS AT HOME (PETS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 203p | MARKET VALUE: | £1.0bn | |
| TOUCH: | 202-203p | 12-MONTH HIGH: | 256p | LOW: 162 |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 154p* | NET DEBT: | 30% | |
| Half-year to 9 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 346 | 21.3 | -3.0 | nil |
| 2014 | 382 | 40.5 | 7.0 | 1.8 |
| % change | +10 | +90 | - | - |
Ex-div: 11 Dec Payment: 16 Jan *Includes intangible assets of £955m, or 191p a share | ||||
