Pets at Home notches up record profits but flags cost pressures

Pets at Home has revealed a record annual profits haul as it capitalised on the boom in pet ownership and vowed to keep prices competitive despite cost pressures.

The group posted a 65.3% surge in underlying pre-tax profits to £144.7 million for the year to March 31 on like-for-like sales up 15.8%.

Reported pre-tax profits on a 53-week basis rose to £148.7 million, up from £106.3 million the previous year.

The company said it is “not immune to current industry-wide inflationary pressures, in particular the impact of raw material, energy and freight costs”.

But it added: “We have clear plans in place to keep our pricing competitive for customers, while doing everything we can to reduce our own costs.”

The group has already taken measures to help reduce its soaring costs, including targeting rent reductions, procurement savings and operational efficiencies.

It said these actions should help keep it on track to meet City expectations for underlying pre-tax profits of £151 million for the current financial year despite the inflation pressures.

The group added that it sources more than 80% of its goods from its home market, which is helping to limit freight and shipping costs.

“We continue to work closely with our broad base of suppliers to mitigate inflation where possible across the supply chain,” it said.

Outgoing chief executive Peter Pritchard, who will hand over the reins to Lyssa McGowan at the end of May after 11 years in charge, said: “Despite another period characterised by significant and evolving external challenges, our performance this year has been noteworthy, delivering record sales, profit, and cash flow.

“I hand over leadership of this great business to Lyssa McGowan with the utmost confidence that Pets at Home will continue to create value for all stakeholders in both the near and longer-term.”

The group’s results show it attracted a record number of new customers, with 7.3 million members now signed up to its pet club, called Very Important Pets, and a 36% jump in puppy and kitten club members.