Pets at Home reaffirms guidance, shares jump

(Sharecast News) - Shares in Pets at Home rallied on Tuesday, after the retail and veterinary group confirmed annual profits would meet guidance. Updating on year-end trading, the pet care specialist said its retail turnaround plan was on track across its four priorities of product, price, execution and cost.

It continued: "We have implemented our price investments and completed our £20m group overhead savings, and while the benefits of many initiatives still lie ahead of us, we are encouraged by the progress made."

In its vet division, meanwhile, Pets at Home said it had been a "further year of strong progress", despite an expected slowdown in sales growth, with annual pre-tax profits of around£83m. It also confirmed no likely adverse impact on its growth strategy for the division following the Competition and Markets Authority's investigation into the veterinary sector.

As a result, group underlying pre-tax profits were set to come in at £92m in the year to 26 March, in line with previous guidance. Pets At Home also confirmed it remained "comfortable" with forecasts for the current year, noting: "At this stage we have around 80% of our energy and forex requirements hedged and are comfortable with current analyst consensus expectations for group underlying pre-tax profits." The market is current targeting profits between £90m and £108m.

As at noon BST, the All-Share stock had put on 5% at 187p.

Pets At Home has endured a difficult period, with sales struggling in its retail division and the abrupt departure of chief executive, Lyssa McGowan, in September. Interim pre-tax profits slid nearly 34% to £36.2m.

In December, it announced that former Waitrose executive James Bailey would take on the top job at the end of March.

The CMA unveiled a wide-ranging overhaul over the veterinary sector last week following a lengthy investigation. Changes being introduced include a cap on prescription charges, a requirement to publish price lists and making ownership clearer.

Pets At Home is due to publish full-year numbers at the end of May.