Pets at Home chief executive James Bailey has hailed progress on the retailer’s turnaround strategy, despite a sharp fall in profits over the financial year.

For the 52 weeks ending 26 March, the group reported statutory profit before tax down 28.3% to £86.5m, while underlying profit fell 30.2% to £92.8m.

Revenue was broadly flat, with group statutory sales down 0.8% to £1.47bn and retail sales falling 1% to £1.29bn. However, the vet division continued to outperform, with consumer revenue up 5% to £688.1m, supported by stronger care plan uptake and higher transaction values.

Bailey said the business had made “material progress” over the past six months in stabilising its retail arm, with improving customer satisfaction, better availability and strengthening sales momentum following the launch of its Retail Turnaround Plan.

“Pets at Home is a business with many strengths, a strong shared purpose and great potential,” he said. “I have found a business full of talented and committed people who want to do the best for our customers and their pets.”

Chief financial officer Sarah Pollard said that cost control and productivity measures had helped offset inflation pressures, while continued growth in the vet business provided a strong contribution to group performance.

Looking ahead, the company said retail sales growth has continued to rise in the current financial year, leaving its underlying profit forecast of around £98m, unchanged.

In a post-trading call Bailey, who became CEO in March, added that developments in the Middle East have not had a significant impact on the company’ supply or trade routes but added that the situation is being closely monitored given the potential for escalation.

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