Pets at Home warns of tough first half

Pets at Home nevertheless retained its final dividend, and intends to pay out £24.7m to shareholders in July. The retailer will save around £33m through business rates relief, but has opted not to furlough employees, having kept stores open during the crisis, although in-store sales have been lower and weighted towards food. Pets at Home’s retail margin edged down 127 basis points to 49.7 per cent, on an unfavourable sales mix driven by a 13.6 per cent rise in food revenues, which diluted its margin.

Online sales remain solid, but they haven't offset the group’s first-quarter retail decline, while Pets at Home’s coronavirus response incurred £5m in additional costs. Some of its joint venture veterinary practice partners, which operate independently and generate fee income for the group, have also been afforded a six-month loan repayment holiday after new guidelines imposed limits on pet procedures.

Peel Hunt forecasts full-year 2021 adjusted pre-tax profits and EPS of £70m and 11p, respectively, rising to £83.7m and 13.1p in FY2022.