27th Nov 2018 09:29
LONDON (Alliance News) - Pets At Home Group PLC on Tuesday reported a drop in interim profit on costs associated with its veterinary restructuring programme.
Furthermore, in a bid to save cash, the pet products retailer and veterinary practice, said it is considering closing 30 practices, run in joint ventures with independent veterinaries, which "may not, we believe, be viable over the longer term".
It is also planning to buy back up to 55 practices from joint venture partners, which will cost the company up to GBP49 million by 2020.
For the six months to October 11, pretax profit plunged to GBP8.0 million from GBP40.8 million a year prior. This was on the back of GBP29.9 million in non-underlying exceptional charges relating to loans provided to vet practices, including GBP16.2 million "which are no longer expected to be recoverable".
A year ago, the charge against the Vet business was GBP1.0 million.
Chief Executive Officer Peter Pritchard said: "Reviewing our Vet Group has been a priority. I recognise we have grown at pace and more recently, have seen the pressure that rising costs and our fees are placing on this young business. We will need to recalibrate the business to deliver more measured growth, whilst maintaining our plan to generate significant cash profits."
Revenue for the six-month period was up 6.7% to GBP499.3 million from GBP468.0 million, with the Retail side of the business generating revenue of GBP443.7 million, up 6.0% year-on-year and the Vet Group unit's revenue up 12% to GBP55.6 million.
Pets At Home maintained its dividend unchanged at 2.5 pence per share. It said that it intends to maintain its total payout for the year at 7.5p per share.
For the full current financial year, the company expects adjusted pretax profit of at least GBP80 to GBP85 million.
Shares in the company were trading down 1.3% at 113.30p each on Tuesday morning.
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