Pets at Home Group (PETS) H1 2025 Pre Recorded earnings summary

Executive summary

• Outperformed a subdued UK pet care market, gaining share in both retail and vet segments through an integrated, omnichannel, consumer-centric strategy.

• Vet Group's joint venture model and digital investments drove strong growth, with app sales nearly doubling and subscription revenue rising to 12.4% of sales.

• Sustainability initiatives advanced, including solar panel installation and support for pet charities.

• Market remains subdued, but the long-term outlook for the UK pet care sector is positive.

Financial highlights

• Group revenue grew over 4% to more than GBP 1 billion in H1, with underlying PBIT up 14% and statutory PBT up 47.3% to £51.1m.

• Vet Group revenue up 18.6% to £92.8m; Retail revenue flat at £696.3m.

• Free cash flow increased by over 40% year-on-year to £33.1m; adjusted net debt at £8.3m.

• Group gross margin stable at just over 46%; Vet Group margin up 97bps, Retail margin down 31bps.

• Statutory EPS 7.9p (+51.9%); underlying EPS 8.4p (+13.5%). Interim dividend 4.7p (+4.4%).

Outlook and guidance

• Subdued market conditions expected to persist through H2 FY25, with guidance for only modest profit growth for FY2025.

• Long-term market growth expected to return to 4% per annum, with company targeting 300bps outperformance.

• FY26 faces £18m cost increase from National Living Wage and NIC changes; mitigation efforts ongoing.