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Pets at Home Group PLC on Wednesday outlined plans to address weakness in its retail business after announcing sharply lower half year profit. The Cheshire, England-based operator of 450 pet care centres and 440 veterinary practices said pretax profit fell 29% to £36.2 million in the 28 weeks to October 9, down from £51.1 million a year ago. Underlying pretax profit dropped 34% to £36.2 million from £54.5 million with underlying pretax profit margin of 4.7% down 220 basis points. Vet Group underlying pretax profit rose 8.3% driven by higher joint venture practice revenues alongside an ongoing improvement in managed practice profitability. But Retail underlying pretax profit slumped 84% with gross margins down 105 basis points, reflecting targeted price investment, adverse category mix and lower supplier income. Revenue declined 1.3% to £778.3 million from £789.0 million, with like-for-like revenue also down 1.3%. Interim Executive Chair Ian Burke said: ‘It’s clear that urgent and necessary action is needed to return the Retail business to growth to meet both our own expectations and those of our investors.’ This has resulted in a retail turnaround plan with four clear priorities of ‘Product, Price, Execution and Cost,’ he added. ‘We are returning to our retailing roots to stabilise and rebuild momentum in our Retail business,’ Burke added. Pets at Home said it sees ‘plenty of room for improvement both in the short and longer-term performance and will continue efforts to build momentum ahead of a new CEO being appointed. The process to identify a new CEO continues to progress.’ As part of the restructuring, Pets at Home said it has initiated a restructuring program to reduce overheads by £20 million. The program will incur non-underlying costs of £6 million to £8 million in financial 2026, but with payback of less than 12 months with a full year of benefit expected in financial 2027. Free cash flow increased 2.6% to £34.0 million, with the reduction in underlying pretax profit offset by lower capex, tax and non-underlying cash costs as well as a working capital timing benefit. The interim dividend was maintained at 4.7 pence per share. Looking ahead, Pets at Home confirmed full year guidance for underlying pretax profit of between £90 million and £100 million, after reducing the outlook in September. This would lower than £133.0m million underlying pretax profit reported in the 52 weeks to March 27. The firm said trading in the Vet group remains in line with expectations, but slower than the medium-term ambition of ‘high-single digit’ this year. It expects Vet Group to deliver pretax profit of more than £80 million. Retail performance is improving sequentially but remains behind a flat market with no inflation, the company added. It said ‘slightly positive Retail LFL growth expected as we lap very soft comps’. Insurance is on track to launch in 2026, the firm added. Shares in Pets at Home rose 4.5% to 216.43 pence each in London on Wednesday. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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