Pets at Home business overhaul is bearing fruit
Following an 80% slump in profits last year, an overhaul of the business is bearing fruit as shares in Pets at Home rose by 10% to 236.6p as indicated by their half-year results. The Telegraph newspaper put some of the success down to the burgeoning sales of pet cats and dogs and increased prices for these animals due to increased demand during the coronavirus pandemic.
|Pets at Home interior. Photo: thisismoney.co.uk|
In truth, they radically overhauled the business by launching new services in store, getting rid of underperforming veterinary in-store practices and acquiring a dog walking business called Tailster. Their veterinary business increased by 6.4% in the period. Overall, like-for-like sales increased by 7.8% in the six months to October 10.
I go to the local Pets at Home in New Malden and I notice from the photograph that they have improved their interior layout and design. It looks appealing. Prices have also been reduced. Group revenue rose 9.4% to £546.3 million in the first half of the year and profits rose by 10% to £41.7 million. The boss, Peter Prichard, said that he now expects the business to return to profit growth a year ahead of the planned timetable. Pets at Home have a good online presence which must have helped with online sales.
It seems remarkable to me that they have done so well during the coronavirus pandemic. It seems that the pet business has been unaffected although this is not entirely true because animal rescues have had a very difficult time in part because they are charities and all charities have suffered tremendously because of a heavy curtailment to fundraising and store closures. Although set against that, as mentioned, there has been an increase in dog and cat adoptions, particularly dogs, during the lockdown because people saw a need to adopt a companion animal for company. Perhaps also, they were thinking about this for a long time and chose this moment to proceed.