Pets at Home ups dividend as pet craze boosts business

Pets at Home increased its final dividend by 10% and predicted a big jump in annual profit after reporting strong trading fuelled by people buying pets during the pandemic.

Underlying pretax profit for the year to 25 March fell 6.4% to £87.5m from a year earlier as revenue rose 7.9% to £1.14bn. Profit was reduced by £30m of pandemic costs and the repayment of £28.9m of business rates relief by the pet care group.

Pets at Home said profit was ahead of guidance and predicted that profit on the same basis would increase to £120m-£130m this year. The FTSE 250 company proposed a final dividend of 5.5p a share, up 10% from a year earlier, taking the total payout to 8p a share - a 7% increase.

Shares of Pets at Home rose 3.6% to a record 480.20p at 08:08 BST.

Like-for-like revenue rose 8.7% over the year and accelerated to 12.4% in the second half. Business has been boosted by an 8% increase in pet ownership during the pandemic and Pets at Home said momentum had continued in the current year.

Peter Pritchard, chief executive, said: "Despite challenges to how we were able to do business, we grew our market share across all channels and our underlying growth trajectory accelerated.

"We estimate that the rising level of pet ownership, combined with structural demand drivers such as premiumisation and humanisation, has increased the outlook for growth across our addressable market, and in conjunction with our expectations of continuing to take market share, provides a tailwind to the £600m customer revenue opportunity we see across our business over the medium term."