Pets at Home Group Plc (LON:PETS) have today announced a Q3 FY23 trading statement.
Financial Highlights
· Consumer revenue1 up 9% yoy with growth underpinned by a record number of consumers and pleasing volume growth. Consumer revenues1 up over 30% vs pre-pandemic.
· Group revenue up 8.8% to £347.5m, with growth remaining ahead of our medium term ambition. Group like-for-like2 (LFL) revenue up 8.3%, accelerating from Q2.
o Vet Group revenue increased by 18.1%, with LFL2 revenue up 18.0%. Across our general practices we recently broke the £10m weekly sales barrier for the first time.
o Retail revenue increased by 8.0%, with LFL2 revenue up 7.6%, including a record trading day of over £8m. All categories were in growth through the quarter and we delivered further progress in our relative price competitiveness.
· Resilient gross margin performance, in line with management expectations, and a strong grip on operating costs supported good profit and cash conversion across the business.
Outlook
· Robust trading momentum has continued into Q4, and with 8 weeks of the year left to trade, we now expect FY23 Group underlying PBT3 towards the upper end of the current consensus range of £126-136m, ahead of previous guidance of c£131m.
· Our balance sheet remains robust and we expect to finish the year in a net cash4 position.
· Looking ahead to FY24,
o We have clarity over the move in National Living Wage which at an increase of 9.6% is in line with our expectations.
o Our USD requirements are now c70% hedged at an average rate of $1.18 (FY23 fully hedged at $1.34).
o Freight container rates continue to move favourably.
o We continue to closely monitor the situation on energy.
Strategic Progress
· Sustained momentum across key strategic KPIs and consumer acquisition metrics;
o Sign ups to our Puppy and Kitten Club continued at pace, averaging over 23,000 per week, three-fold higher than pre-pandemic, further boosting our embedded lifetime value opportunity.
o New client registrations across our veterinary general practices remained strong, averaging 8,000 per week, growing our active client base to 1.7m.
o The number of active VIPs increased 8% YoY to 7.6m, with those engaging across more than one channel representing 27% of VIPs.
o The number of subscription plans5 across the Group grew 9% YoY to 1.6m, now generating over £135m in annualised recurring consumer revenue1.
· Continued progress in the development of our digital platform, with Q3 seeing the launch of an enhanced mobile app bringing together VIP and shopping in one easy to use experience.
· Development of our new purpose-built distribution facility remains on track to become operational by summer 2023, with the build stage now concluded and first inbound deliveries complete.
· Launched new trial of the capability to offer customers nutrition subscriptions in-store.
· Introduced a new digital tool in our vet group to enable quick and easy appointment booking, payment, and communication between practice and client, removing friction from the consumer experience.
Lyssa McGowan, Pets at Home Group Chief Executive Officer, commented:
We delivered a really pleasing Q3 with acceleration in sales momentum across the platform. Importantly, the quality of our growth remains strong as we continue to grow volumes and attract new consumers through offering compelling value and service, in what remains a challenging inflationary environment.
It was particularly pleasing to see our accessories category return to growth, supported by the strong performance in our Christmas range, demonstrating that consumers still want to treat their beloved pets in these challenging times. Our Vet Group continued to grow its client base, adding 8,000 new clients a week in Q3, with annualised average practice revenues now reaching £1.1m.
I am also delighted to announce the appointment of Kathryn Imrie as our new Chief Consumer Officer, a key role as we further integrate our consumer offering. Kathryn will bring a range of critical skills and external expertise into the business. This completes the recent changes to our Executive team and marks a step-change in our journey to build a consumer-centric, omnichannel, pet care platform.
Creating a better world for pets and the people that love them lies at the heart of our strategy, and I am incredibly proud that our annual Christmas fundraiser, Santa Paws, raised an incredible £2.1m for charities.
