Pets at Home Group Plc (LON:PETS) has announced its FY25 Preliminary Results for the 52 week period to 27 March 2025
Platform in place to support future growth
Key financial results
| Statutory Metrics | FY25 | FY24 | YoY % |
| Group Statutory Revenue (£m) | 1,482.1 | 1,480.21 | 0.1% |
| Group Statutory PBT (£m) | 120.6 | 105.7 | 14.1% |
| Statutory Basic EPS (p) | 19.0 | 16.6 | 14.5% |
| Dividend (p) | 13.0 | 12.8 | 1.6% |
| Total Indebtedness# (£m) | (342.1) | (372.0) | (8.0)% |
| Financial Performance Metrics | FY25 | FY24 | YoY % | |
| Group Consumer Revenue# (£m) | 1,961.9 | 1,909.9 | 2.7% | |
| – Retail | 1,306.8 | 1,330.1 | (1.8)% | |
| – Vet Group | 655.1 | 579.8 | 13.0% | |
| Group Underlying PBT# (£m) | 133.0 | 132.0 | 0.7% | |
| – Retail | 72.9 | 87.4 | (16.6)% | |
| – Vet Group | 75.9 | 61.6 | 23.3% | |
| Free Cash Flow# (£m) | 83.8 | 69.0 | 21.5% | |
| – Retail | 30.6 | 26.7 | 14.6% | |
| – Vet Group | 67.5 | 58.3 | 15.8% | |
| Adjusted Net Cash# (£m) | 6.2 | 8.8 | (30.1)% | |
| Underlying Basic EPS# (p) | 21.0 | 20.7 | 1.6% | |
See note 1.26 for an explanation of the prior year restatement.
Lyssa McGowan, Chief Executive Officer:
“The past two years have seen a profound transformation at Pets at Home. We have moved from a business with a strong presence in pet retail and vets, to a true pet care platform.
We now have a platform that is fit for the future and capable of delivering sustained outperformance and market share gains through delighting consumers and increasingly fulfilling all of their pet care needs. During this period of transformation, we have completely replatformed our digital infrastructure, built new capabilities around our data, brand & marketing, and simplified our distribution network to a single distribution centre fulfilling stores, online and subscriptions, and we have achieved this against the backdrop of a normalising pet care market and low consumer confidence.
In FY25, we also saw another outstanding year of growth in our vets business, fuelled by the commitment and expertise of our partners, supported by our best-in-class scale services, platform benefits and industry knowhow. 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.
I am tremendously proud of our colleagues and partners for navigating this challenging but critical period which leaves us in a position to look to the future with confidence. While FY26 comes with its own challenges as we digest externally imposed cost headwinds and heightened macro uncertainty, our objective is clear – to deliver outperformance against our underlying markets, across our business.”
Financial Highlights
| • | Group consumer revenue# up 2.7% to £1.96bn, against a subdued but resilient market backdrop. | |
| • | Vet Group consumer revenue# up 13.0%, record sales supported by high quality growth driven by higher visits, average transaction values and significant growth in Care Plan revenues. | |
| • | Retail consumer revenue# down 1.8%, impacted by a period of subdued growth in the pet sector due to a soft UK consumer backdrop throughout FY25, deflation and normalising levels of new pet ownership. In addition, we saw some transitionary impacts from our digital platform launch. However, the fundamentals of the business remain healthy with consumer satisfaction improving through the year. | |
| • | Total Group statutory revenues up 0.1% to £1.48bn, with Group like-for-like# (LFL) revenue -0.4%. Vet Group revenues up +16.8% (LFL# +16.2%) to £175.3m, with Retail revenues -1.8% (LFL# -2.0%) to £1.31bn. | |
| • | Group underlying PBT# of £133.0m, up 0.7% YoY, in line with guidance, with Group underlying PBT margin# +5bps. | |
| • | Vet Group underlying PBT# of £75.9m up 23.3%, driven by the increase in fee income YoY whilst maintaining a broadly flat cost base. | |
| • | Retail underlying PBT# of £72.9m down 16.6%, driven by the impact of lower revenues with gross margins broadly stable and good cost control. | |
| • | Group statutory PBT £120.6m, up 14.1% with the underlying profit fall offset by a £13.9m reduction in non-underlying costs YoY to £12.4m in FY25. | |
| • | Underlying EPS# 21.0p, up 1.6% with a 1.4% underlying profit for the period decline, offset by 3.0% share buyback accretion. | |
| • | Total dividend per share of 13.0p (up 1.6%), final dividend held at 8.3p. | |
| • | Free cash flow# up 21.5% to £83.8m, reflecting the increase in underlying PBT#, lower non-underlying costs and lower share purchases linked to our employee benefit trust (EBT). | |
| • | Vet Group £67.5m up 15.8% driven by strong sales growth, leveraged through our capital light model. | |
| • | Retail £30.6m up 14.6% with lower non-underlying costs helping offset lower underlying profits. | |
| • | Balance sheet remains robust with adjusted net cash# of £6.2m (FY24: £8.8m), before lease liabilities of £348.3m. Cash and cash equivalents of £39.5m at the end of the year (FY24: £57.1m). | |
| • | £25m share buyback announced for FY26, having already completed £125m in buybacks in last 3 years | |
Strategic Highlights
| FY25 was a year of strategic progress against a more challenging macro backdrop. Importantly, the key elements of our strategy are now complete and will underpin future growth. Highlights include: | |
| • | Pets Club members grew 5% to 8.2m helped in part by auto-enrolment on the new digital platform, further increasing our active consumer base from which we can drive share of wallet gains in the future. |
| • | Our retained consumers2 continue to see higher ACV3 – faster consumer growth than anticipated diluted our total consumer ACV3 (down 2% to £175) but retained consumer2 ACV3 growing 1% to £216. |
| • | Digital platform fully transitioned providing the foundations to leverage our Pets Club data to drive an increasingly personalised consumer experience. |
| • | Distribution network optimisation complete, with all sales channels now being fully serviced by our single site distribution centre in Stafford. |
| • | Subscription revenues4 +30%, with 13.0% (from 10.0%) of Group Consumer revenue# now generated via subscriptions. Particularly strong growth across Easy Repeat and Care Plans as our improved offer and functionality resonates with consumers. |
| • | Retail consumer satisfaction +10pts since start of year driven by improvements in availability, service and value for money. |
| • | Further growth in vet footprint – 3 new JV practices and 15 JV extensions completed in the year with accelerated ambitions for future supported by a robust partner pipeline. In FY26 we plan to open at least 10 new JV practices alongside 15 extensions. |
| • | Continued investment in our Pet Care Centres with 4 new openings and 32 Pet Care Centre refits including 4 major refits in our new trial format. |
| • | Progressed our sustainability agenda – In partnership with Meatly we supported the launch of the world’s first cultivated meat dog treat and over 250 own brand pet food ranges have been carbon footprinted. |
Building the world’s best pet care platform
Our strategy is clear. We are the UK’s only complete pet care provider, and our recent transformational investments will provide a platform for outperformance through unlocking new areas of growth in existing and adjacent markets, generating long-term sustainable value for all stakeholders.
FY25 has been a critical year in the delivery of our strategy, completing and bedding in two major investment programs, our distribution network optimisation and our digital platform. This investment has been critical to futureproof the business and has required significant focus and resource to deliver, against a challenging and uncertain trading backdrop.
With these two key programs now complete, our focus is now firmly on delivering the omnichannel benefits of these investments across our 8.2m Pets Club members. We will continue to improve our experience and broaden our appeal as we fully integrate vets, grooming and insurance going forward. Our vision is on track to build the world’s best pet care platform, bringing together a best-in-class omnichannel retail proposition with our unique blend of services, through an integrated and consumer centric experience.
An integrated consumer experience
| • | Our new digital platform is now live, completing a key building block of our strategy. As consumers interact with our platform, we are seeing increased conversion as consumer journeys are simplified, and higher average baskets as consumers engage with new features. |
| • | While FY25 was impacted by the transition to the new platform, we have a long track record of growing our online sales. We expect to return to market outperformance in FY26 and beyond as we leverage our improved capability with a particular focus on subscriptions growth and improved mix through growing own brand and accessories participation. |
| • | Our Pet Care Centres remain central to our omnichannel experience. High quality assets in their own right, and also providing an important digital halo, with online sales increasing over 25% in areas with a new Pet Care Centre opening5. Our new format stores have performed well, with stronger subscription and Pets Club sign-ups, supporting a broader rollout, with 30 refreshes planned for FY26. |
| • | Consumers will continue to benefit as we further enhance our experience, truly integrating our unique blend of products, services and advice. Most importantly, we can begin to use our best-in-class, first party data much more effectively to better meet consumer needs and drive incremental demand. |
Growing our recurring revenue streams
| • | Our revenues are increasingly predictable as our business mix improves, with more of our revenues coming from areas such as vets, grooming, and subscriptions. We plan to continue to grow this further with subscription participation still fairly low across our 8.2m Pets Club members and 0.6m non-Pets Club vet clients (of 1.7m total active vet clients). |
| • | The new digital platform has already unlocked strong growth in Easy Repeat subscriptions, which are +35% YoY. These consumers are showing c50% higher frequency and c50% higher ACV3 than prior to taking out a plan. |
| • | We have also recently launched Easy Repeat sign up in store, with over 1,000 sign-ups a day so far. 75% of these in-store sign-ups are opting for 2-4 weekly frequency vs 80% of online sign-ups being 4-12 weeks. In addition, over 90% of new sign-ups are opting for Click & Collect. |
| • | Our headroom for growth remains significant, with only c3% of our 8.2m Pets Club members having an active Easy Repeat subscription compared to over 50% of our vet clients who have a Care Plan. Each 1% of consumers moved onto Easy Repeat would add £10m to our revenues. |
| • | Our relaunched Care Plans have been a success in driving practice revenue growth. Our Care Plans contributed 9% to Vet Consumer revenue# growth as our relaunched plans resonated well with consumers and we sold more, higher value plans, increasing the stickiness and predictability of our vet revenues. |
Differentiated, sector-leading vets
| • | Our unique JV model has delivered another year of double-digit growth and market share gains. Our vet group is a clear #2 in the UK First Opinion sector and is responsible for 33% of our consumer revenues, over 50% of Group underlying PBT# and the majority of Group Free Cash Flow#. | |
| • | The Nation’s Local Vet. The success of our vets business begins with delivering the best outcomes for consumers and their pets. Our practice owners operate with clinical freedom, build their business with a long term, community focus and compete effectively to grow their consumer base, supported by our national brand, platform and industry leading support. | |
| • | This shows up in differentiated economics for us and our partners. In FY25: | |
| • | We increased our brand consideration by 7pts and delivered a 4pts increase in consumer satisfaction from already high levels. | |
| • | Average practice revenues grew 12.8% to £1.4m. | |
| • | Joint Ventures practices reduced total indebtedness by £6.4m to £24.8m and paid c£46m out to partners in dividends, averaging over £150k per debt-free practice. | |
| • | This year we surpassed our vets FCF# target of £60m. But the ambitions of us and our partners are not satisfied. We will deliver further growth through embedded maturity, the rollout of new practices, and investments in advanced capabilities and extensions. While we expect recovery in Retail FCF# in future, we expect Vets to continue to contribute the majority of Group FCF#. | |
| • | Practice maturity is not a constraint on our growth, in FY25 sales growth in our 10+ year old practices was 11%. We have a clear track record of growing practice revenues beyond 10-years old through extensions and advanced capabilities and plan for c15 further extensions in FY26 and c100 over the medium term. We also plan to accelerate our openings, delivering >10 in FY26 and c100 over the medium term. | |
| • | We remain confident and consistent in our view that our unique JV model still insulates us from many areas of the CMA’s concern and await the CMA’s provisional findings in July 2025. | |
Insurance
| • | Our new insurance venture will bring a disruptive, Pets branded proposition to the c£2bn pet insurance market. Pet insurance is the largest vertical outside of Pets at Home’s current core operations. It is expected, by Mintel, to grow at c4% per annum reaching c£2.5bn by 2029. |
| • | We have secured an experienced team, who have a 20% minority stake, to build a capital light, Pets at Home insurance proposition leveraging our brand, data and leading consumer base. We will deliver a disruptive consumer experience by leveraging AI to remove key areas of consumer friction. |
| • | We expect to incur start-up losses for around 2 years as we move towards launch and begin building our book of business. We expect to reach break-even point during FY28 before generating meaningful profits thereafter. We believe over time the business is capable of contributing c10% of Group Profits. |
Spotlight on Sustainability
Acting responsibly has always been at the heart of our business. Our sustainability agenda is fully integrated into our strategy, centred around a shared purpose of creating a better world for pets and the people who love them.
Progress Pets at Home Group has made this year includes:
| • | We have carbon footprinted over 250 of our own brand complete cat and dog food products representing over 65% of own brand complete cat and dog food sales, this is a key enabler to understanding our Scope 3 emissions and prioritising where we take action. |
| • | We have Pet food bank collection points in all our Pet Care Centres, in partnership with the Blue Cross, helping to keep pets in loving homes. In FY25 we collected 1.6m meals bringing the total since this initiative was launched to over 4 million. |
| • | Over 60,000 children attended one of our ‘My Pet pals’ or ‘Scout Association’ Pet Care Centre workshops over the course of the year. |
Our financial framework
As we look forward, we have refined our medium-term framework reflecting the shape of growth and profits we expect to deliver over the medium term.
| • | Grow consumer revenue# at mid-single digit rate per year, outperforming the UK pet care market. | |
| • | Industry growth in 2024 has been low as we have seen subdued consumer confidence, lower inflation and the normalisation of the UK pet market drag on growth. | |
| • | But the pet care market remains an attractive one, with growth supported by premiumisation and humanisation, as consumers treat their pets increasingly as members of the family. | |
| • | So, while we expect consumer confidence to remain subdued in 2025, it is expected that industry growth will improve gradually towards historic norms. | |
| • | We expect to outperform the market as we continue to benefit from our unique JV Vet model, alongside an accelerated vet rollout, and we begin to deliver the benefits of our new digital platform. | |
| • | We would expect faster growth in vets consumer revenue# than in retail with vets growing on average at high single digit rates with Retail at a low to mid-single digit rate. | |
| • | PBT growth ahead of sales growth through operational leverage and productivity gains. | |
| • | Improving retail sales growth will drop through to profit growth. In addition, as we move beyond a phase of heavy investment in the business, we will continue to work hard driving efficiency through our cost base, driving profit growth ahead of sales growth. | |
| • | We also expect margin accretive growth in the vets business to continue, driven by operational gearing and improving the mix of our business further. | |
| • | Normalised capex of c£50m to drive FCF# conversion of profit after tax to c90%. | |
| • | Our period of major investment is now complete and investment levels going forward will reflect normalised levels required to maintain a well invested, competitive platform. | |
| • | Unchanged Capital Allocation Policy and maintained capital discipline prioritising: | |
| 1. Responsible investment in the core operations.2. A progressive ordinary dividend targeting 50% EPS payout.3. Inorganic growth opportunities with a focus on strategic investments and bolt-on M&A.4. Return excess cash to shareholders subject to maintaining a strong balance sheet and not constraining the business. | ||
FY26 Guidance
| • | Our objective for FY26 is to deliver outperformance versus the market in Vets and Retail, alongside building towards the launch of our insurance offering. | ||
| • | We expect the current market conditions and subdued consumer backdrop to remain in FY26, with retail market growth of c2% expected. | ||
| • | The first 6 weeks of the year have begun as expected with group profits tracking in line with guidance. | ||
| • | In Retail: | ||
| • | We expect revenues to outperform the underlying market as our digital investments bear fruit. | ||
| • | Operating costs to increase no more than 5%, which includes productivity initiatives of c£30m to offset higher than usual underlying cost inflation including externally imposed headwinds of national living wage / national insurance contributions (c£18m), new packaging regulations (c£2m), the rebuild of variable pay (c£10m) and we are investing a further £3m in marketing costs to drive sales. | ||
| • | Overall, with our current view of demand and costs we expect Retail underlying PBT# to decline YoY. | ||
| • | In our Vet Group: | ||
| • | We expect further progress in underlying PBT# albeit against the comparative of the exceptional levels of growth delivered in FY24 and FY25. | ||
| • | We will deliver >10 new vet practices in FY26, together with a further 15 extensions. | ||
| • | We will invest c£3m in our new insurance proposition. | ||
| • | We expect to deliver Group underlying PBT# in the range of £115-125m. | ||
| • | We do not expect to incur any non-underlying costs. | ||
| • | Effective tax rate is expected to be 26%. | ||
| • | Capital investment at normalised levels of below £50m. | ||
| • | £25m share buyback, following the £125m completed over the last 3 years. | ||
Key Performance Indicators6
| Strategic KPIs | FY25 | FY24 | YoY |
| Number of active Pets Club members7 (m) | 8.2 | 7.8 | 5.0% |
| Average Consumer Value3 (£) | 175 | 178 | (1.7)% |
| % of Consumer Revenue from Subscriptions8 (%) | 13.0% | 10.0% | 30.0% |
| Clinical FTE Headcount9 (k) | 3.5 | 3.3 | 6.0% |
2. Retained consumers are active Pets Club members who transacted across the group in the last 365 days prior to the end of the reporting period for both the current and prior year.
3. Average consumer value (ACV) is the average spend of active Pets Club members across the group over the last 365 days based on consumer revenue as defined above, rather than statutory revenue.
4. Subscription revenue includes our Flea & Worm, Easy Repeat, Complete Care and Vac4Life plans.
5. Performance of the online catchment surrounding the new Pet Care Centre relative to the total online performance over the same period. Performance is analysed prior to the new Pet Care Centre opening vs the performance 3 years post opening.
6. Financial KPIs represent those used by the business to monitor performance. Management recognise that as Alternative Performance Measures they differ to statutory metrics, but believe they represent the most appropriate KPIs.
7. Number of active Pets Club members who transacted across the group in the last 365 days prior to the end of the reporting period.
8. Subscription revenue includes our Flea & Worm, Easy Repeat, Complete Care and Vac4Life plans and is divided by Group consumer revenue.
9. Full time equivalent number of all vets and nurses working across the group, based on standard working hours.
