Annual Report and Accounts 2017

Growing our family of pet specialists

Annual Report and Accounts 2017

Pets at Home is the UK’s leading specialist pet retailer.

We provide everything a pet owner needs to ensure their pet can lead a happy and healthy life; food and accessories, specialist advice, grooming services and veterinary care.

Pets at Home - Annual Report & Accounts 2017 Cover

At a glance

Ian Kellett, Group Chief Executive Office for Pets at Home

VIDEO

Everything your pet needs for a happy and healthy life!

The Group provides a comprehensive range of merchandise and services for customers and their pets. It is the combination of our specialist retail offer, veterinary practices and grooming salons, all within a single pet-focused environment, that represents a uniquely attractive offer to our customers.

Retail

Our merchandise offer is provided from our retail store network and website. Within our stores, well-trained colleagues provide detailed advice on areas such as pet nutrition and the set-up of home aquaria. Investment in our omnichannel capabilities provides additional convenience for customers.

Services

We provide veterinary services through our first opinion network of Joint Venture practices, and our specialist referral centres. Our first opinion practices are operated mainly under the Vets4Pets brand and are situated in stores and in stand-alone locations. Our referral centres provide high level, specialist services to vets working in our own, and in other first opinion practices. Grooming services are provided primarily from salons within our retail stores.

A snapshot of our progress

Staff grooming a dog

Service and convenience matters

Products, veterinary care & grooming services all under one roof.

Pets at Home employee speaking with a customer

A better customer experience

Offering our customers unmatched product range and seamless omnichannel convenience.

Veterinary nurse attending to a cat

Expanding our specialist veterinary network

Providing comprehensive veterinary services for our clients and their pets.

The year in review

Growing our specialist capabilities

Financial highlights

Revenue (£m)

£834.2

+7.2%

Gross margin (%)

54.2%

-35bps

Basic pre-exceptional earnings per share (pence)1

15.3p

+1.0%

Dividend per share (pence)

7.5p

-

Operational highlights

Customers paying for items at a Pets at Home checkout

Growing our presence...

Delivered our rollout targets for both stores and services, and grew our VIP loyalty club by 300,000 members.
Veterinary staff

Growing our specialist services...

Increased our presence in the veterinary specialist services market through the acquisition of two referral centres.

4

specialist veterinary referral centres in the Group

Pets at Home website on an tablet

Growing our online capabilities...

Ongoing investment has delivered a better online experience for customers, leading to higher order volumes and basket spend.

Nearly

50%

of online orders are collected by customers in-store

Grass

Growing our responsibility...

Our programme to equip stores with LED lighting and a Building Energy Management System is delivering immediate financial savings, reducing our environmental impact and delivering welfare improvements for our pets.

Over

50%

of stores now fitted with LED lights & Energy Management Systems

1 Excludes exceptional costs.

FY16 comparative information presented on a 52 week basis. For reconciliation to a 53 week statutory basis see page 179 of the printed report.
FY16 53 week statutory revenue was £793.1m.
FY16 53 week statutory basic earnings per share was 14.6p.

Chief Executive's statement

Ian Kellett, Group Chief Executive Office for Pets at Home

We continue to operate successfully in a growing market, taking share, and are the only UK pet business able to deliver an integrated merchandise, services and omnichannel offer."

Strategic Update

We delivered a solid performance over the year with profits in line with expectations, reflecting in part the strength of our Joint Venture vet practices where our total income grew 24.6%. We are uniquely positioned as the only UK pet business delivering an integrated omnichannel and services offer, supported by our fast growing Vet Group, market leading private labels and expert colleagues. In an evolving consumer environment, we are taking steps to reposition prices on own label Advanced Nutrition and pet essentials and have made some initial changes to branded food lines. Encouraged by the reaction of our customers and having seen an improvement in Merchandise trading, we are moving swiftly to deliver even better value. We are confident this is the right path for success and will give us a strong platform for sustainable future growth.

Ian Kellett Signature

Ian Kellett Group Chief Executive Officer