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Investing.com -- Pets at Home (LON:PETSP) on Wednesday posted a fiscal 2025 profit before tax of £133 million, in line with guidance and edging past last year’s £132 million, as strong performance from its veterinary division offset disruption in retail operations.
The group’s full-year revenue was flat at £1.48 billion, compared with £1.48 billion in fiscal 2024.
Despite a weaker fourth quarter, where like-for-like retail sales fell 5.5%, the company completed two major projects, digital replatforming and distribution center simplification.
Jefferies analysts said the final stages of the distribution center move weighed on retail performance late in the year, with third-quarter like-for-like sales also declining 2.8%.
Retail profit before tax dropped to £72.9 million from £87.4 million a year earlier, while the segment’s revenue fell to £1.31 billion from £1.33 billion.
The veterinary business continued to show growth, with profit before tax rising to £75.9 million from £61.6 million.
Revenue for the division reached £175.3 million, up from £150.1 million in the prior year. Like-for-like sales in the unit grew 16.2%.
Mature practices, defined as those operating for 10 years or more, reported 11% revenue growth.
Free cash flow rose 22% in the period, and the company maintained a net cash position after a £25 million share buyback.
Underlying EBITDA was £247.6 million, flat year over year. Operating expenses held steady at £545.9 million.
For fiscal 2026, Pets at Home kept its guidance unchanged, projecting profit before tax in the range of £115 million to £125 million.
Jefferies said the first six weeks of trading in the new financial year were described by the company as “as expected,” with profits tracking in line with full-year targets.
The company introduced a revised medium-term growth framework, targeting mid-single-digit growth in overall consumer revenue.
The veterinary business is expected to grow at a high-single-digit rate, while retail is forecast to expand at a low- to mid-single-digit pace.
The company previously aimed for 7% revenue growth and 10% profit growth. According to Jefferies, the updated targets reflect a more conservative approach.
Capital expenditure is forecast to decline to under £50 million. Group profit before tax is projected to increase ahead of sales growth, supported by operating leverage and productivity gains, Jefferies said.
The group’s valuation continues to be supported largely by its veterinary segment. Jefferies estimated the three-year compound annual growth rate in profit before tax for the Vet Group at 21%.
The analysts cited potential growth from practice expansions, capability investments and new locations, with approximately 100 additional sites planned over the medium term.