Pets at Home said this week that it expected full-year profits to be slightly ahead of expectations – after “exceptional” demand during the Covid-19 crisis. But it warns that customer spending may well be down at the start of its current financial year, which opens at an uncertain time.
The retailer, designated an essential trader, said in a trading statement that while fourth-quarter trading was in line with expectations, in the final weeks of its financial year to March 26, it saw “exceptional levels of demand, both in-store and online” as customers stocked up ahead of lockdown. Existing customers spent more, while new customers bought pet products from it and used its animal healthcare services. Pets at Home says its previous investments in omnichannel, in subscription services and in new customer acquisition mean it was well-placed to meet these levels of demand. It also says it has introduced social distancing and other measures to protect the health and safety of its staff both in its stores, distribution centres and support offices.
However its grooming salons have closed and, while veterinary practices and specialist referral centres remain open, the retailer, ranked Top50 in RXUK Top500 research, expects that customer spending will be down in both services and retail as it starts its new financial year.
Peter Pritchard, Pets at Home group chief executive, said: “While FY20 has undoubtedly ended strongly for Pets At Home during this unprecedented time, the period ahead is uncertain for us all, and Pets At Home will not be immune to these challenges that we collectively face. I am extremely grateful that our colleagues and operations have shown such resilience and flexibility to meet the recent exceptional level of demand from both existing and new customers. As ever, in difficult times consumers turn to trusted brands and advice, and that is why we are working tirelessly to ensure that we continue to provide essential products and healthcare services for the UK’s pets.
“The health and safety of our colleagues, partners, suppliers, customers and pets remains our top priority. We continue to take all appropriate action in line with Government advice and remain vigilant to the potential impact of COVID-19 as we start the new financial year. We are also providing support for the communities that need us through £1.1m of funding to nominated pet charities, a £1m crisis fund for colleagues and discounts to NHS workers as they care for the nation’s health.”
Pets at Home says that it has cash liquidity of about £160m, including a significant proportion of a £258m revolving credit facility.
Image courtesy of Pets at Home