// Pets at Home traded in line with expectations for the full-year thanks to increased demand
// The demand was prompted by the coronavirus pandemic
// Underlying pre-tax profit was slightly ahead of expectations
Pets at Home has said the group traded in line with expectations as the Covid-19 outbreak led to increased demand for the full year.
For the year ended March 26, the pets goods retailer said its underlying pre-tax profit was slightly ahead of expectations, and the group traded in line with market expectations for most of the fourth quarter.
In the closing weeks of the financial year, the retailer saw “exceptional levels of demand” both in-store and online, as the coronavirus pandemic developed.
Its existing customers increased average basket size by pulling forward purchases as well as new customers accessing pet products and healthcare services.
Meanwhile, its previous investments in omnichannel capacity, new customer acquisition channels and subscription services had benefited the retailer to further meet demand.
Pets at Home said it has “extensive headroom on debt capacity and covenants with a significant proportion of committed £248 million revolving credit facility remaining available for drawdown pre-maturity in 2023”.
Total liquidity including cash balances is approximately £160 million, and the retailers expects to end the year with a net debt/EBITDA ratio pre IFRS16 of under 1.0x.
Furthermore, Pets at Home said its priorities during this time are “to safeguard the wellbeing and safety of colleagues, partners, suppliers, customers and pets”.
It will continue to operate its stores after being designated as an “essential” retailer by the government, but it has implemented a number of protocols to ensure safety and minimise the risk of Covid-19 transmission.
Some of these include providing some colleagues with alternative working arrangements as many have opted to work from home, while also closing its Groom Room salons.
Despite increased demand, the retailer expects reduced customer revenues.
This, together with the likelihood of lower store revenues resulting from other necessary measures it has implemented, is expected to have a negative impact on group turnover.
“While FY20 has undoubtedly ended strongly for Pets at Home during this unprecedented time, the period ahead is uncertain for us all, and Pets At Home will not be immune to these challenges that we collectively face,” Pets at Home chief executive Peter Pritchard said.
“The health and safety of our colleagues, Partners, suppliers, customers and pets remains our top priority.
“We continue to take all appropriate action in line with government advice and remain vigilant to the potential impact of Covid-19 as we start the new financial year.
“We are also providing support for the communities that need us through £1.1 million of funding to nominated pet charities, a £1 million crisis fund for colleagues and discounts to NHS workers as they care for the nation’s health.”
Given the uncertain backdrop, Pets at Home said it will not give financial guidance for FY21 and beyond at this stage, but currently plans to announce its final results on May 21.