Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
2022 is predicted to be the year that “bark-itecture” becomes a big trend. That’s according to Pinterest which says that turning our homes into the perfect pad for our pets, will be what everyone with a pet will be doing this year.
It sounds daft, but when you consider how pet ownership hit a new all-time high during the pandemic you can see how that could very well become a reality.
After all, as we all know, a pet is for life, not just for lockdown, so those 3.2 million households that the Pet Food Manufacturers’ Association says bought a new pet in the past two years, means this is one pandemic spike that isn’t about to go into reverse.
And that has to be a winner for the companies that are part of the multi-billion pound pet industry here in the UK, where there are even rumours that couples have increasingly put ‘real’ babies on hold for ‘fur babies’. The fact that 16-35 year olds account for 59% of all new owners only lends weight to that theory.
Pets at Home Group (PETS) knows it is on a winning streak here. These pets will require long-term care, and Pets at Home’s decision to invest heavily in the expansion of its ancillary pet care services, as soon as lockdown struck, was a very smart move.
The company, which is the UK’s largest pet supplies retailer, with more than 450 stores and 300 veterinary and grooming salons nationwide, saw pre-tax profits for the six months to 7 October soar by 81.3% to £70.6 million, with the surge in pampered pets lifting revenue in grooming services 62.2% higher.
In fact, all areas of the business grew, including food revenue up 21.4% to £336.7 million and accessories, such as dog toys and training aids, up 20.9% to £257.7 million. While the veterinary side of the business saw like-for-like revenue rise 26.2%, although overall sales fell 14.7% to £56.8 million due to the sale of Pets at Home’s vet hospital business.
Pets at Home isn’t the only winner here. All the companies operating in the thriving pet industry - from food manufacturers to those that run chains of veterinary practices - are booming as we discover here.
Describing business as having “never been more robust”, outgoing chief executive Peter Pritchard announced an overall 18% rise in group revenue in the first half of £677.6 million, including retail sales jumping 21.9% on a like-for-like basis. Online sales were similarly 21.5% higher than a year ago.
The company said it expects the benefit it is seeing from the rise in ownership to run and run, with profits and sales for the year likely to hit the top end of market expectations. That would mean it is firmly on track to report a record year of sales and profit growth - yet again.
Pets at Home is due to release its latest trading update on Wednesday.
More on Pets at Home Group
Important information: Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
Share this article
Market news today - Contrarians sense a turning point
What’s driving your investments this week?