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LONDON (Alliance News) - Shares in Pets at Home Group PLC gained ground on Wednesday after the retailer said it remains on track to meet its expectations for the full year on the back of another strong trading update.
The FTSE 250-listed retailer said revenue in the 12 weeks to January 1 grew 7.8% to GBP182.2 million, buoyed by merchandise revenue growth of 6.5% to GBP168.2 million, with growth in its food segment continuing to outpace accessories, and services revenue growth of 26% to GBP14 million.
It said its gross margin improvement remains in line with its guidance for the year and it is still trading in line with its full year expectations.
On a like-for-like basis, revenue rose 4.1%, with merchandise revenue up 3.4% and services revenue up 15.6%. The company said its Advanced Nutrition dog and cats range, health and hygiene products and its Christmas ranges performed well, as did its VIP Club loyalty scheme.
The VIP Club added another 250,000 members in the quarter, meaning it now has a total membership of 2.9 million. VIP card swipe rate as its store till represented 61% of revenue, the company said, up from 57% in the first half of this year.
Fee income from its joint venture veterinary practices rose 32.9% to GBP6.4 million, the company said. It marks another strong rise for the vet practices unit, coming on the back of a jump in fee income to GBP14.8 million in the first half, up from GBP11.4 million a year earlier.
The company opened seven new stores in the quarter, bringing it total openings in its 2015 financial year to 17 and meaning it now has a total portfolio of 392 stores. It opened five veterinary practices and eight Groom Rooms in the quarter. It now has 308 veterinary practices open and 160 Groom Rooms. It said it retains its target of opening 25 new stores in the year to the end of March.
"We are very pleased with the continued growth in like-for-like sales. This reflects the strength of our offer, the multiple levers through which we can drive growth, and the resilience of the pet products and services market," said Nick Wood, Chief Executive Officer of Pets at Home.
The strong trading update comes after the group reported in December that its pretax profit nearly doubled in the first half to GBP40.5 million, with revenue increasing across its divisions.
Pets at Home shares were up 1.5% to 205.956 pence on Wednesday, one of the best performers in the FTSE 250.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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