Pets at Home profits up as strong trading continues in Q3

Pets at Home Group reported higher interim profits and maintained its dividend after a strong second quarter as locked down Britons sought solace in their furry friends during the Covid-19 pandemic.

The FTSE 250-listed firm, classed as “essential” retailer during the coronavirus lockdown, made a pre-tax profit of £38.9m for the 28 weeks to October 8, compared with £34m a year earlier. Underlying pre-tax profits, which strips out one-off costs, was down 5.1% to £39.6m.

Chief executive Peter Pritchard said the the lockdown had shown the importance of pets for people stuck indoors amid the Covid-19 crisis.

“It’s no surprise in that respect. The number one reason people buy pets is for companionship, and so they’ve made a huge difference during the pandemic. For some people, the only reason they’re going out during lockdown is to walk their dog,” he told the BBC.

Revenue rose 5.1% year-on-year, or 5.3% on a like-for-like basis, to £574.4m as second quarter sales jumped 13%. The interim dividend was held at 2.5p a share.

"The sustained strength in performance we saw across both our retail and veterinary operations during the second quarter has continued into our third quarter, and we continue to take market share across all channels," Pets at Home said on Tuesday.

“At this stage, absent any escalation of restrictions, or other significant disruption to our operations, we now anticipate full-year underlying pre-tax profit to be in line with the prior year, with the estimated financial impact of the pandemic not fully offset by this year's business rates relief.”

In-store sales grew 5.8%, helped by a 12.5% surge in the second quarter during the summer, as lockdown restrictions eased and customers returned to the shops. Online revenue surged 65.8% with customers making use of click and collect services.