Alongside robust first-half results, veterinary and grooming services and pet supplies firm Pets at Home (PETS) said annual profit was expected to be at the top end of market expectations following a jump in earnings.

This momentum is underpinned by continued growth in pet ownership, and the news lifted the shares 6.2% to 486.8p.

For the 28 weeks ended 7 October 2021, pre-tax profit jumped to £70.6 million from £38.9 million as revenue grew 8% to £677.6 million while the interim dividend per share was increased by 72% to 4.3p.

‘The stronger than expected and continuing growth in the pet population over the past 18 months is materially increasing the size of our addressable market,’ the company said.

The main cloud on the horizon is the departure next summer of chief executive Peter Pritchard, who has introduced many of the strategic initiatives which have helped the business capitalise on soaring demand including an enhanced digital offering and VIP loyalty scheme.

ANALYSTS IMPRESSED

Liberum analyst Adam Tomlinson commented: ‘Self-help is continuing to drive impressive KPI (key performance indicator) momentum, including new customer acquisition, and an acceleration in underlying market growth from a larger pet population gives us confidence that Pets at Home’s strong growth trajectory will continue over the medium-term.’

His counterpart at Shore Capital Eleonora Dani said: ‘The pet space is hot right now with plenty of private equity interest and can count on the structural pet population’s expansion to support future growth, unlike other Covid-winners.

‘Pets at Home remains the dominant number one UK player in the sector that is both robust and resilient. The business has built some attractive assets (i.e., loyalty club, own labels and the store locations) which set them apart from the competition, all underpinned by data and digital capability.’

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Issue Date: 23 Nov 2021