Pets at Home Group has announced its preliminary results for the financial year ending 27 March 2025, revealing a tale of two divisions as the company navigated challenging market conditions.
Shares were fairly flat on Wednesday after the pet retailer and veterinary services provider reported group consumer revenue growth of 2.7% to £1.96bn.
CEO Lyssa McGowan said the group was becoming a ‘true pet care platform’ after a period of transformation. The term ‘platform’ relates to a focus on subscriptions, which are up 30%, and recurring revenues. The strength in subscriptions and the vets business has been essential in offsetting disappointing performance in the retail stores.
The vets business delivered consumer revenue growth of 13% to record levels. This growth was driven by increased customer visits, higher average transaction values, and substantial expansion in Care Plan revenues. Statutory revenues for the veterinary division rose 16.8% to £175.3 million on a like-for-like basis of 16.2%.
In contrast, the retail division revenue declined 1.8%. The segment was impacted by subdued growth in the pet sector, reflecting a challenging UK consumer environment, deflationary pressures, and normalising levels of new pet ownership following the pandemic boom.
Retail revenues fell 1.8% to £1.31 billion, with like-for-like revenue down 2.0%.
Overall group statutory revenues increased marginally by 0.1% to £1.48 billion, with like-for-like revenue declining 0.4%. Group underlying profit before tax rose 0.7% to £133.0 million, in line with company guidance, representing a margin improvement of 5 basis points.
“A ‘tail’ of two halves for Pets at Home this morning, as the retail side of the business continues to struggle due to tightened discretionary spending caused by the increased cost of living. As such, the purchases of new collars, beds or other toys and accessories are being scaled back from the family budget,” said Adam Vettese, market analyst at eToro.
“Pets at home are putting their best paw forward with the veterinary side of the business, which is continuing to show robust growth. This has helped offset weaker retail performance and brought overall results in line with market expectations. Pre-tax profit and earnings per share rose, reflecting operational resilience despite a challenging macro environment.”