The nearly £30m-worth of one-off costs in Pets at Home’s (PETS) half-year results won’t be the last that investors are forced to endure. As part of a formal review of the vet business, the group will buy back 55 of 471 practices. Of those, 30 will be company-run while the remainder will close, causing further damage to statutory profits. During the reported period, a £29m charge was taken against the vet business to provide for the remainder of funding due from Pets at Home, as well as guaranteed bank and lease obligations and the cost of additional operating cash outflows expected as part of the buyout.
By the time full-year results roll around, that exceptional charge in the income statement will reach £42m, with a further £11m due in FY2020. New chief executive Peter Pritchard – who took up the role in May – admitted that the vet group business had grown "at pace" in a changing market, giving rise to a pressured fee structure and higher costs.
Broker Numis expects pre-tax profits of £82m for the year ending March 2019, giving EPS of 13.1p, compared with £84.5m and 13.5p in FY2018.
| PETS AT HOME (PETS) | ||||
| ORD PRICE: | 113.4p | MARKET VALUE: | £567m | |
| TOUCH: | 113.3-113.9p | 12-MONTH HIGH: | 202p | LOW: 102p |
| DIVIDEND YIELD: | 6.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 178p* | NET DEBT: | 15% | |
| Half-year to 11 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 468 | 40.8 | 6.5 | 2.50 |
| 2018 | 499 | 8.0 | 1.2 | 2.50 |
| % change | +7 | -80 | -82 | - |
| Ex-div: | 06 Dec | |||
| Payment: | 11 Jan | |||
| *Includes intangible assets of £996m or 199p a share | ||||
