Pets at Home posts mixed FY results as retail drags

(Sharecast News) - Retailer Pets at Home posted a mixed set of fullyear results on Wednesday, with solid progress in its veterinary unit offset by continued pressure in retail as the firm continued to push ahead with its turnaround plan.

Pets at Home said group consumer revenues had edged 1% higher to �1.98bn, driven by a 5% rise in Vet Group revenue to �688m, while retail slipped 1% to �1.29bn against a subdued market backdrop.

However, Pets at Home said its retail turnaround plan, which was launched in the third quarter, had begun to deliver improving sales and volume trends through the second half.

Underlying group pre-tax profits fell 30.2% to �92.8m, reflecting lower retail profitability and a 270basispoint margin decline, with Vet Group underlying pre-tax profits rising 10.4% to �83.8m, supported by strong JV practice performance, while retail underlying pre-tax profits dropped 57.8% to �30.8m. Statutory pre-tax profits declined 28.3% to �86.5m.

Free cash flow fell 26.1% to �61.9m and adjusted net debt stood at �19.4m at the end of the trading year, representing leverage of 0.1x underlying earnings. Pets at Home also proposed a 7.4p dividend and a further �50m share buyback.

Chief executive James Bailey said: "Material progress has been made over the past 6 months stabilising the Retail business, delivering improved satisfaction and better availability. We have the opportunity now to build momentum through profitable volume led growth in Retail while continuing to execute the proven growth levers of our Vet business and launch our Insurance offering.

Reporting by Iain Gilbert at Sharecast.com