Pets at Home has slashed its dividend by more than 40% after a difficult year in which both revenues and profits fell, though the retailer pointed to early signs of recovery and the continued strength of its Vet business.
For the 52 weeks to 26 March 2026, statutory revenue fell 0.8% to £1.47bn, while group underlying pre-tax profit dropped 30.2% to £92.8m.
The dividend was cut to 7.4p from 13p the year before, a 43% reduction, and is now set at 50% of earnings under a refreshed capital allocation policy announced at the pre-close update.
Underlying earnings per share fell 29.7% to 14.8p.
Pets at Home’s issues have been reflected in its share price, which is down by more than 60% since its 2022 peak.
The bulk of the pain came from retail, where consumer revenue dipped 1% to £1.29bn in challenging market conditions and underlying profit collapsed 57.8% to £30.8m.
Retail free cash flow fell to just £2.7m, down from £30.6m, largely tracking the profit decline. Group gross margin overall fell around 120 basis points to 45.7%.
This isn’t good news for investors, and the dividend cut shouldn’t have come as a surprise.
Management was candid that the dividend cut and the profit reset reflect a Retail business that had drifted off course, prompting the Retail Turnaround Plan, launched in the third quarter, centred on four priorities: product, price, execution, and cost. However, it doesn’t seem to be filtering through to financial performance.
A November price cut on more than 1,000 food products, averaging 12%, was a deliberate margin sacrifice aimed at restoring volume, and there are signs it is working, with food volumes up 3.7% in the fourth quarter.
Despite the setbacks, there were reasons to be encouraged. The Vet Group again outperformed, with consumer revenue up 5% to £688m and underlying profit up 10.4% to £83.8m, helped by strong Care Plan sign-ups.
The business remains the clear leader in UK pet care, with 460 pet care centres, 7.4m active Pets Club members, brand awareness above 95% and well-invested distribution and digital infrastructure now in place.