Total group revenues at Pets at Home are up 15.3% to £1317.8m for the full year to March 2022, with omni-channel sales revenue up 18.4% on 2021 and a whopping 100% ahead of 2020’s pre-pandemic levels.
Going out on a high, CEO Peter Pritchard is stepping aside after 11 years running the company, replaced from next month by Lyssa McGowan.
The retailer, which has added 1.2 million new puppy and kitten customers and 1.1 million new VIP customers, continues to outperform the petcare market, growing 10% in the past five years, compared to the market expanding by 4%.
The key to the company’s success has been tapping into the boom in pet ownership that has occurred across the past two years, while offering consumers an end-to-end lifetime service for their pets.
The number of active VIPs stands at a record 7.3m and 27% of all VIPs shopped across more than one channel during the year, up 22% YoY. The number of Puppy and Kitten Club members grew 36% YoY, with approximately 23,000 average weekly registrations in the year, compared to approximately 7,000 two years ago, creating a significant lifetime value opportunity.
New client registrations across Pets at Home’s First Opinion veterinary practices averaged approximately 9,000 per week, with an active client base of 1.7m, while the number of pet care plan subscriptions across the Group grew 23% YoY to 1.5m, generating over £120m in annualised recurring customer revenue.
Commenting on the results, Pritchard says: “Our business is in great shape. Over the past year we have welcomed more than 1.1 million new VIP customers across the Group, delivered record sales, profit and cash flow, and accelerated investment into analytics capability, digital innovation, and our supply chain to join up our pet ecosystem, enhance the customer experience and entrench the competitive advantages of our omnichannel model. We are growing share across every part of our business, achieving customer revenue1 of almost £1.7bn.
“In Retail, broad-based growth across key categories, both in-store and online, contributed to strong like-for-like progression and good profit conversion on both a one and two-year basis.
“In Veterinary, our unique owner-managed model is delivering sector leading performance, with two-year LFL up 24.5% and average practice revenue surpassing £1m. Gross margin expansion and good cost control, together with strong revenue growth, means that c90% of practices are now profitable, and Vet Group profit accounts for one third of the overall Group, despite representing less than 10% of Group revenue.
“This increasing profitability is driving good cash flow and balance sheet efficiency at practice level, with free cash flow generation up three-fold over the past two years to £50.9m, and operating loans now standing at £20.2m, having more than halved since the start of the planned recalibration. Furthermore, the continuing growth in new client registrations provides a clear underpin to future value creation.
We also continued to make good progress in our social value strategy, aligned across the three pillars of Planet, People and Pets.”
Walid Koudmani, chief market analyst at financial brokerage XTB adds: “The report showed total group revenue growth of 15.3% to £1,317.8m with strong growth in retail revenue reflecting broad-based growth across all channels and a group free cash flow of £95.0m, up 40.9% YoY. Furthermore, final dividend per share increased by 36% YoY, reaching 7.5p. Despite the impact of raw material, energy, and freight costs the company expects performance to be in line with guidelines as the general outlook remains quite positive. Share price reacted very positively to this report and the optimistic outlook with an increase of over 7% so far in today’s session and reached the highest level since the beginning of the month.”