The boss of Pets at Home has vowed to return the business to profitable growth, as the retailer reported a profit slump in the year to March 29.
Pets at Home posted a 12.3pc drop in underlying pre-tax profit to £84.5m and earnings before interest, taxes, depreciation and amortisation of £123.3m – down from £130.5m the previous year. This was despite a 7.8pc rise in revenue to £898.9m.
The results come as the pet shop and veterinary services company embarks on the second year of a three-year plan, slashing costs and attempting to win back customer loyalty.
Pets at Home incurred £2.7m of costs from closing its Barkers pet spa stores after announcing in January that it would shut all seven trial shops by the end of March due to high rental costs and lack of availability of the high street locations it desired.
But the retailer has managed to save £2.5m in energy costs, while rent and other costs declined as a percentage of sales. It also slashed staff costs by cutting payroll hours in stores.
Loyalty schemes for puppy owners and flea treatment subscriptions have also had some success locking in customers, although analysts cautioned that these have had low take-up so far.
Peter Pritchard, who took over as chief executive in April, said: “Our plans to reposition retail are working, more customers are coming back to shop with us, and we are committed to returning the business to profit growth,” adding that “it hasn’t been easy”.
“We took decisive action, threw passion and energy into it, and delivered targeted pricing changes to give customers the products that mattered most to them, with the service and value they expect from us.”
Looking ahead, he said that he would put more focus on its digital business, particularly using customer and pet data, as well as “taking action to ensure our vet business reaches its potential”.
George Salmon, an equity analyst at Hargreaves Lansdown, said that the company faced “plenty of challenges”.
“We suspect online competition is proving a bigger factor than the group originally thought.”
Shares in Pets at Home fell 7.78pc in morning trade to 145.7p.
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