Pets at home Regulatory News (PETS)

FOR IMMEDIATE RELEASE, 25 MAY 2022

Pets at Home Group Plc: FY22 Preliminary Results

for the 53-week period to 31 March 2022

Please click on the associated PDF to view the full announcement:

http://www.rns-pdf.londonstockexchange.com/rns/7598M_1-2022-5-25.pdf

Record customer acquisition to accelerate future growth in market share

Financial highlights

* Reflects the disposal of the Specialist Group in the prior year

§ Total Group revenue growth of 15.3% to £1,317.8m with a further 1.2m million new puppy and kitten customers in the base and average spend compounding across customer cohorts

§ Growth in Group customer revenue1 of 16.5% to £1,673.8m, reflecting market share gains across all areas of the business

§ Strong growth in Retail revenue reflecting broad-based growth across all channels and categories and Vet Group LFL revenue up 17.1%

§ Growth in Group underlying proforma PBT# of 65.3% to £144.7m before the change in IAS38 accounting policy2, ahead of consensus expectations, with growth of 54.8% on a 2-year basis; Growth in Group underlying PBT# of 67.9% to £130.1m having taken account of the accounting policy change in relation to IAS38 Intangible Assets. The impact of the policy change reflects our market leading levels of investment as we continue to digitise the business and improve our customer proposition

§ Group free cash flow# of £95.0m, up 40.9% YoY, including strong cash generation across our First Opinion veterinary practices

§ Strong balance sheet with net cash (excluding lease liabilities) of £66.0m and intending to launch a 12 month share buyback programme of up to £50m

§ Final dividend per share of 7.5p, an increase of 36% YoY, reflecting our robust balance sheet and continued confidence in the prospects of the business, giving a total dividend of 11.8p for the year, up 48% YoY

§ Continued momentum with sustained growth across our pet care ecosystem:

- The number of active VIPs stands at a record 7.3m having increased by 1.1m (18%) YoY, or 29% on a 2-year basis

- 27% of all VIPs shopped across more than one channel during the year, up 22% YoY

- The number of Puppy and Kitten Club members grew 36% YoY, with approximately 23,000 average weekly registrations in the year, compared to approximately 7,000 two years ago, creating a significant lifetime value opportunity

- New client registrations across our First Opinion veterinary practices averaged approximately 9,000 per week, with an active client base of 1.7m

- The number of pet care plan subscriptions across the Group grew 23% YoY to 1.5m, generating over £120m in annualised recurring customer revenue1

# Alternative Performance Measures (APMs) are defined and reconciled to IFRS information, where possible, on page 83.

Impact of 53rd Week

FY22 represents a 53-week year, and as such key metrics for FY22 are summarised below on a 52-week basis to aid comparison to the prior year. All other FY22 metrics presented throughout this statement are on a 53-week basis.

Note all metrics above are presented on an underlying proforma basis before the change in IAS38 accounting policy2.

52-week metrics are calculated by excluding all sales and attributable costs from the final week of the financial year.

a. FY22 non-underlying credit of £0.1m (FY21: £0.6m) relates to the release of a provision held against property leases allocated against non-underlying gross margin.

b. FY22 non-underlying credit of £19.2m (FY21: £30.2m) relates to the profit on disposal of the Specialist Group. FY21 non-underlying charge of £1.9m relates to an accounting charge for minority stakes owned by partners in the Specialist Group, prior to disposal on 31 December 2020, allocated against non-underlying operating costs.

c. FY22 non-underlying cost of £0.7m relating to loan fees written off upon refinance of our revolving credit facility, allocated against non-underlying interest charge.

Current trading and outlook

The pet care market remains robust and in growth, with registrations into our Puppy & Kitten club continuing well ahead of pre-pandemic levels and growth in customer spend maintained across all categories and channels.

Our pet care strategy continues to deliver, the advantages of our omnichannel model in consistently taking market share by making pet care affordable, easy, and convenient are clear, and our ongoing investment into capacity and capability is achieving good return.

Notwithstanding enduring industry wide inflationary pressures which we continue to manage proactively, in particular the impact of raw material, energy, and freight costs, we anticipate that FY23 Group underlying pre-tax profit, excluding the impact of the accounting policy change in relation to IAS38 Intangible Assets3, will be in line with analyst consensus, which is currently £151m, with a range of £146m to £157m.

Including the impact of this accounting policy change, we currently anticipate that FY23 Group underlying pre-tax profit will be £131m, compared to £126.4m for FY22 on a 52-week basis.

Our next scheduled update will be our Q1 FY23 release on 5 August 2022.

Peter Pritchard, Group Chief Executive Officer:

Despite another period characterised by significant and evolving external challenges, our performance this year has been noteworthy, delivering record sales, profit, and cash flow. I would like to express my heartfelt thanks to our truly inspiring colleagues and Partners across the Group for their continued adaptability and commitment to making Pets at Home bigger, stronger, and more efficient.

We are well placed to accelerate our growth in market share. The robust backdrop of the UK pet care market, coupled with our clear strategic priorities, proven omnichannel model and strong Executive Team, mean that I hand over leadership of this great business to Lyssa McGowan with the utmost confidence that Pets at Home will continue to create value for all stakeholders in both the near and longer-term.

Notes

1. Customer revenue includes customer sales made by Joint Venture vet practices and differs to the fee income recognised within Vet Group revenue.

2. In our Q3 trading statement on 26 January 2022, we anticipated that full year Group proforma underlying pre-tax profit would be at least £140m prior to the impact of any accounting policy change in relation to IAS38 Intangible Assets. Excluding the impact of this accounting policy change our FY22 underlying pre-tax profit was £144.7m and the impact of the accounting policy change was £14.6m. A reconciliation is set out below, with further detail provided in the CFO review.

3. In light of the clarification from the IFRS Interpretations Committee (IFRIC) regarding how companies should account for configuration and customisation costs relating to cloud computing arrangements, including Software as a Service (SaaS), which has led to a change in accounting policy in the application of IAS38 Intangible Assets, we estimate an approximate £20m non-cash impact on full-year underlying PBT in FY23.

4. Proforma amortisation charge had the amounts now expensed been capitalised

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulations (Regulation (EU) No.596/2014). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Roger Tejwani, Director of Investor Relations & External Communication.

Results webcast

An audio webcast and presentation of these results will be available on our website (https://investors.petsathome.com/investors/) from 07.00am on 25 May. Management will host a Q&A conference call for analysts and investors at 10.30am. To join the call in listen-only mode, please click on the following link (webcast). Those wishing to participate in the Q&A session should email petsathome-Maitland@maitland.co.uk for call details.

Investor Relations Enquiries

Pets at Home Group Plc:

Roger Tejwani, Director of Investor Relations & External Communication+44 (0)1279 927022

Chris Ridgway, Head of Investor Relations+44 (0)7788 783925

Media Enquiries

Pets at Home Group Plc:

Natalie Cullington, Head of Media & Corporate Affairs+44 (0)7974 594 701

Maitland/amo:

Clinton Manning

+44 (0)7711 972662

Joanna Davidson

+44 (0)7827 254567

About Pets at Home

Pets at Home Group Plc is the UK's leading pet care business; our commitment is to make sure pets and their owners get the very best advice, products and care. Pet products are available online or from our 457 stores, many of which also have vet practices and grooming salons. Pets at Home also operates a UK leading small animal veterinary business, with 443 First Opinion practices located both in our stores and in standalone locations. For more information visit: http://investors.petsathome.com/