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(Alliance News) - Pets At Home Group PLC on Thursday said profit was sharply higher in its most recent financial year after revenue passed the GBP1 billion mark for the first time but warned of a substantial hit from Covid-19.
Shares in Pets At Home were down 13% at 201.00 pence in London in morning trade, making it the worst performer in the FTSE 250.
The pet supplies retailer reported a GBP85.9 million pretax profit for its year ended March 26, a steep 73% rise from GBP49.6 million the year before.
Pets At Home declared a final 5.0p per share dividend, taking the total for its year to 7.5p per share, flat from financial 2019.
Revenue was 10% higher at GP1.06 billion, having been GBP961.0 million the year before, with "exceptional" demand in the fourth quarter "as customers brought forward purchases and shopped more frequently online" in response to the lockdown.
However, close to all exceptional demand seen in the final weeks of its financial fourth quarter has unwound in the first quarter of its current year amid a UK lockdown which restricted sales only to essential pet products and health care products, depressing normal turnover.
Online sales were higher but could not mitigate lower in-store sales. Pets At Home explained "their weighting towards food, together with an additional GBP5 million of costs relating to our initial response to Covid-19, has had an adverse effect on profits, margins and cashflow in the financial year to date."
As such, Pets At Home is forecasting that pretax profit in the first half of financial 2021 will "be materially below the prior year" including the business rates holiday and operating costs from social distancing.
"It remains difficult to make a clear assessment of how consumers will react as we emerge from lockdown and we, therefore, do not feel it is prudent to provide full-year guidance at this stage. We will, however, reassess this at our Q1 update at the end of July," said Pets At Home.
Chief Executive Peter Pritchard said: "In normal circumstances, it would have given me great pleasure to reflect on another year in which we have grown sales and profits and successfully executed our proven pet care strategy. These are, however, far from normal circumstances with the rapid, wide-ranging and devastating effects of Covid-19 having an unprecedented impact on all of our lives."
By Anna Farley; annafarley@alliancenews.com
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