Branching out makes pets group pack leader

Britons might be able to buy their pets treats and rawhide bones over the internet but you cannot spay a cat or groom a dog online. That, according to Ian Kellett, is one of Pets at Home’s secrets to success.

The chief executive said that the group was showing its resilience in the face of competition from Amazon and B&M, the value store, as it reported interim pre-tax profits of £47 million, up 3.9 per cent on year ago.

Like-for-like sales at Pets at Home also rose by 2.5 per cent in the 28 weeks to October 13, driven by a strong increase in the group’s services division.

Mr Kellett said that Pets at Home benefited from a strong retail portfolio, a growing services division offering dog grooming and others treats, a nutrition section and a VIP club. It has a high-margin division that creates joint ventures with vets across the UK and runs the back office in ex-change for part of the turnover. Pets at Home has tie-ups with 405 practices and has set a target of 700.

“We have been trading successfully against Amazon, B&M and others for some time,” Mr Kellett said. “We are always making sure that we win on value, our range, and our knowhow and expertise and that makes our positioning in the market very different.”

Pets at Home’s merchandise revenue rose 4.7 per cent to £379.5 million during the period, of which £209.6 million was food products and the rest pet accessories, from dog bowls to walking leads. Revenue at its services division leapt by 47.6 per cent to £41.9 million.

Mr Kellett said sales were holding up, despite a tough environment, because the group provided a diverse range of products and services and British people loved to spend on their pets. “It is that old adage about how the pet will often come before the husband and not suffer from any cutbacks in household budgets,” he said.

However, shares closed at 222½p as the market reacted to the retailer’s comments that trading had been “softer” since the end of the first half. The group maintained its full-year outlook. Pets at Home will pay a dividend of 2.5p a share — up 25 per cent year on year.