Pets at Home has announced a steady year-on-year revenue, with a contrasting performance in retail sales and veterinary services.
Underlying pre-tax profit in retail dropped by 16.6 per cent year on year to £72.9m, while the underlying pre-tax profit from the company's veterinary arm increased by 23.3 per cent year on year to £75.9m – surpassing retail for the first time, as reported by .
Shares climbed nearly three per cent in early trading as a result.
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Revenue from veterinary services expanded by 13 per cent year on year, now making up a third of the company's total revenue.
Conversely, revenue from retail sales dipped by 1.8 per cent year on year to £1.3bn.
Pets at Home has grappled with sluggish retail sales over the past few years, which it has previously attributed to weak footfall and a "challenging 海角视频 consumer backdrop."
Overall statutory revenue marginally increased by 0.1 per cent to £1.48bn in the year ending March 27, Pets at Home informed markets this morning.
Statutory pre-tax profit rose by 14.1 per cent to £120.6m from £105.7m the previous year.
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Pets at Home boosted its dividend by 1.6 per cent year on year, from 12.8p to 13p.
'Profound transformation' at Pets at Home
CEO Lyssa McGowan stated that the company has undergone a "profound transformation" in the last two years.
"We have moved from a business with a strong presence in pet retail and vets, to a true pet care platform," she added.
"We saw another outstanding year of growth in our vets business," McGowan said.
"Our practices significantly outperformed a more subdued industry backdrop and delivered this progress despite the ongoing uncertainty of the CMA investigation – further demonstration of the power of our unique joint venture model," she added.
The 海角视频's competition watchdog initiated an investigation into the veterinary sector last year.
The most recent documents on the probe, released by the CMA on 6 February, highlighted concerns that customers had limited service choices and noted that the cost of veterinary services has increased faster than inflation.
'Guidance won't set tails wagging'
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Analysts generally responded positively to Pets at Home's results, although.
"The retail outlook remains subdued. Pets expects to outperform market growth of 2 per cent but with costs rising by up to 5 per cent due to various bits of unhelpful legislation, profits are likely to fall.
"The Vets outlook appears stronger with over 10 new openings planned this year and the Group seeming relatively well protected from the probable findings of the Competition and Markets Authority industry-wide probe," said Derren Nathan, head of equity research at Hargreaves Lansdown.
But "despite the challenges, the cash keeps flowing," he added.
"Pets at Home delivered a steady performance," stated Russell Pointon, director of content at Edison Group.
"From a macroeconomic lens, Pets at Home has been operating under the weight of sustained cost inflation, while contending with muted consumer spending and a cautious recovery in retail footfall.
"Nonetheless, management's proactive cost controls and strategic focus on platform efficiency and subscription growth have helped preserve earnings quality."