Pets at Home has announced plans to close down 30 of its vet practices as part of a strategic overhaul and warned over full-year results amid tumbling interim profits.
Recently-appointed chief executive Peter Pritchard said the pet store chain plans to buy out 55 joint venture vet practices from the 471-strong Vet Group chain, with 25 of them becoming Pets at Home-managed practices while the remainder are placed under review.
The plan was announced as the retailer reported a 80.5 per cent nose dive in pre-tax profits to £8 million in an interim report covering the the half-year period ending October 11.
Pets at Home attributed the profit crash to costs of £29 million relating to the vet practice plans.
With this stripped out, half-year pre-tax profits on an underlying basis fell 9.3 per cent to £37.9 million.
However, retail sales for the same period rose 4.7 per cent on a like-for-like basis, while Vet Group customer revenues rose 15.4 per cent.
Pets at Home warned it was now expecting lower full-year underlying pre-tax profits, predicting at least £80 million to £85 million.
“Since becoming the group chief executive in May, I have had the opportunity to take stock of the wider group and shape my view of our future,” Pritchard said.
He added: “Reviewing our vet group has been a priority. I recognise we have grown at pace and, more recently, have seen the pressure that rising costs and our fees are placing on this young business.
“We will need to recalibrate the business to deliver more measured growth whilst maintaining our plan to generate significant cash profits.”