Shares in Pets at Home (PETS) rose over 4% to 273p in morning trading following the announcement of a £25 million share buyback and a total dividend increase of 1.6% for shareholders. The pet food-to-veterinary service group reported a 0.7% increase in group underlying pre-tax profit to £133 million for the year ending 27 March. The company also revealed plans to launch a new insurance venture, Pets branded proposition, into the approximately £2 billion pet insurance market, expecting to incur start-up losses for around two years.
Financial Highlights
Pets at Home maintained a robust balance sheet with adjusted net cash of £6.2 million and announced the £25 million share buyback for full year 2026, following £125 million in buybacks over the last three years. Free cash flow (FCF) increased by 21.5% to £83.8 million, reflecting higher pre-tax profit, lower non-underlying costs, and reduced share purchases linked to the employee benefit trust.
The company’s veterinary group saw consumer revenue rise 13% due to record sales, higher visit numbers, average transaction values, and significant growth in care plan revenues. For full year 2026, Pets at Home expects to open 10 new vet practices and 15 extensions. However, retail consumer revenue fell 1.8% due to subdued growth in the pet sector, deflation, and normalizing levels of new pet ownership.
CEO’s Statement
Lyssa McGowan, CEO of Pets at Home, commented, ‘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.’ She highlighted the company’s capability to deliver sustained outperformance and market share gains by fulfilling all pet care needs.
Analyst Reactions
Panmure analysts noted that the full year 2025 profits met expectations but acknowledged that additional costs related to the new insurance venture, higher variable staff costs, and regulatory challenges might impact profit progression in full year 2026. Russ Mould from AJ Bell observed that while the veterinary business is performing well, the retail side faces challenges due to increased competition and consumer spending pressure.
