Pets at Home lifted by profit growth

The price of shares in FTSE 250 retailer Pets at Home (LON:PETS) has risen by 10.35% to 236.60p (as of 11:45 GMT) after it announced a 327% improvement in statutory profits before tax for the half year to 10th October. Despite a 132 basis point fall in gross margins, management said that they were confident in delivering increased underlying profits for the full year toward the top end of the current market consensus.

CEO Peter Pritchard commented: “I am very pleased with what we have achieved in the first half of the year. We have executed our plans well, and this has been reflected in the strong customer sales growth across the Group. Our commitment, and that of the Group’s Joint Venture Partners, is to make sure pets and their owners get the very best advice, care and products; and this has led to record levels of VIPs, First Opinion practice clients and subscription customers. In short, our pet care strategy is working.

We have seen sustained momentum in Retail, with a 2-year like-for-like of 13%. This has been complemented by a meticulous delivery of our Vet Group recalibration. The programme to buy out a number of Joint Venture practices is already complete, whilst changes we have made to the fee arrangements for ongoing practices are already showing signs of positive progress and will be followed by further planned adjustments in the second half of the year.

All this provides a strong foundation, meaning we have much to look forward to in FY20 and beyond, and we now expect to return to profit growth a year ahead of our original plan. In the meantime, we will remain focussed on serving our customers, their pets and our partners better than ever before“.