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Pets at Home Group has lifted its profit expectations after a bumper Christmas as momentum picked up during lockdown carried on throughout 2021.
Group revenue’s rose 5.8% to £319.4m in the third quarter to 30 December, with like-for-like figures up 8.7% year on year and 28.1% on a two-year basis.
Pets at Home has benefitted from the boom in pet ownership during the pandemic, helping both its retail stores and veterinary operations.
Retail revenues increased 9.8% in the 12-week period, with like-for-like sales up 9% (28.4% versus pre-pandemic numbers) and store like-for-like numbers up 7.4% (21.1% on two-year basis).
The retailer said the performance reflected continued strong volume growth across key categories and channels, ongoing pet humanisation and premiumisation supporting record numbers for its seasonal ranges.
“The UK pet care market remains robust, with strong continued growth in new pet owner customers, and prevailing customer themes of long-term pet ownership, humanisation and premiumisation, creating a sustainable tailwind for growth across our business,” the group said in the trading update.
Omnichannel revenues grew 16.7% - or 99.3% compared with two years ago.
The veterinary side of the business recorded like-for-like revenue growth in the third quarter of 4% (23.3% on two-year basis).
Thanks to the continued strong momentum heading into the final quarter of its financial year, the group raised profits guidance to “at least” £140m, up from £135m.
CEO Peter Pritchard said: “Our unique, omnichannel pet care strategy continues to deliver strong revenue growth, reflecting continued momentum in customer acquisition, engagement and spend as the benefits of our ongoing investment in capacity and capability really start to deliver.
“We are firmly on track to report a record year of sales and profit growth, and I am incredibly grateful to all of our fantastic colleagues and partners across the group for their hard work and commitment to helping us become the best pet care business in the world.
“I remain confident that the combination of our strategic investments, strength and depth of our exceptional leadership team and successful initiatives to increase operational efficiencies across the group will underpin sustainable, long-term and profitable growth”.
As announced in November, Pritchard is set to leave the company after 11 years during the summer, with the search for his successor now “well advanced” with a further announcement to be made “in due course”.
The group also added it was well placed to mitigate industry-wide inflationary pressures.
“We, like many others, are witnessing a number of inflationary pressures across the supply chain.
“While we are not immune to these challenges, we are proactively mitigating them through a series of planned initiatives targeting rent reductions, procurement savings and operational efficiencies across our business, and we continue to work closely with our supplier base to achieve the operational and purchasing synergies that enable us to maintain our competitive price index.”
Shares jumped 3.1% to 431p as markets opened this morning to news of the profits upgrade.
Morning update
Premier Foods has appointed Tania Howarth as an independent non-executive director.
She will join the board on 1 March and also sit on the audit, remuneration and nomination committees.
Howarth has extensive senior executive experience in the fmcg industry, spending ten years at frozen foods giant Nomad Foods, latterly as chief operating officer.
During her time at the Birds Eye owner she had responsibility for Supply Chain, Quality, HR, IT and M&A integration.
Prior to this, she was CIO for the Coca-Cola Company’s European and African businesses and spent nine years at Walkers Snack Foods, latterly as CIO.
Howarth is non-executive chairman of Ozo Innovations, a sustainable hygiene solutions company, an advisor to the private equity business within Goldman Sachs Asset Management and a member of the technology advisory board at NatWest Group.
Premier Foods chairman Colin Day said: “I am delighted that Tania has agreed to join the board. She brings with her considerable senior executive experience in the branded food industry with particular expertise in technology. Her appointment strengthens the breadth of the board’s experience as we continue to pursue our branded growth strategy and path to further value creation.”
The FTSE 100 continued its fightback this morning, surging 1.5% higher to 7,483.96pts.
Early risers alongside Pets at Home include THG, up 4.1% to 124.6p, Just Eat Takeaway, up 2.7% to 3,544.5p, and PayPoint, up 2.3% to 645.7p.
Bakkavor, AG Barr, Unilever and Premier Foods are among the early fallers, down 1% to 121.8p, 0.9% to 487.4p, 0.4% to 3,919.5p and 0.2% to 118.2p respectively.
Yesterday in the City
The FTSE 100 rebounded by 1% yesterday to 7,371.46pts.
Risers included McColl’s Retail Group, which climbed 8.6% to 9.5p, Ocado Group, up 5.1% to 1,427.5p, Marks & Spencer, up 3% to 219.2p, and Greggs, up 2.9% to 2,559p.
Among the fallers were PayPoint, Just Eat Takeaway, and Virgin Wines, down 4.1% to 631p, 3.9% to 3,451p and 2.2% to 199p respectively.
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