Move to new warehouse hits Pets At Home revenue and profit

The business said that it stuck by its outlook for the year.

August Graham
Tuesday 28 November 2023 07:53 GMT
Pets said that revenue growth slowed in the second quarter. (Mike Egerton/PA)
Pets said that revenue growth slowed in the second quarter. (Mike Egerton/PA) (PA Archive)

Retailer Pets At Home said it has put the worst of the disruption from a move to a new distribution centre behind it as it backed its outlook for the year.

The business said that the hit to retail revenue it experienced in the second quarter of the year had “normalised” since, and it was now seeing like-for-like growth of around 4%.

The problems caused by the move to the Stafford site meant that it became more difficult to keep shelves fully stocked in Pets’ shops around the country.

Normally it has around 95% of its products available in store, but this dipped to as little as around 80% during the disruption.

“This understandably impacted our sales performance,” Pets said.

Retail revenue, which had grown 7.1% like-for-like in the first quarter, was down to 2.7% growth in the second.

The business said that pre-tax profit dipped by more than a third to £34.7 million in the first six months of the year.

This was in part due to around £8 million of higher logistics costs and one-off charges of £13.1 million it racked up in the move.

“This was the period of high activity when we relaunched our brand, launched our new distribution centre, built our new digital platform, and made progress expanding and improving our physical assets,” said chief executive Lyssa McGowan.

“This period has not been without challenges, but we have been able to manage these well and are on track to finish the 2024 financial year with a refreshed, modernised infrastructure, fit to deliver growth for many years to come.”

Pets said that it had made no change to its underlying pre-tax profit guidance, which is expected to be around £136 million.

The business said that it had met with the Competition and Markets Authority (CMA) which in September announced a probe into the veterinary sector.

The CMA was worried about rapid inflation in the cost of vet services, poor transparency over who owns veterinary practices and referrals between practices within the same corporate group.

Pets said that inflation had been driven in part by a double-digit percentage rise in the salaries of UK vets in each of the past three years as labour shortages hit.

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