TIDMPETS
RNS Number : 9608Z
Pets At Home Group Plc
27 May 2021
FOR IMMEDIATE RELEASE, 27 MAY 2021
Pets at Home Group Plc: FY21 Preliminary Results
for the 52 week period to 25 March 2021
A step change in our journey to become the best pet care
business in the world
-- Total Group revenue growth of 7.9% to GBP1,142.8m; Retail
revenue reached GBP1.0bn for the first time with growth of 8.7%
during the year, despite Covid-related restrictions.
-- Group like-for-like(#) (LFL) revenue growth of 8.7%, or 17.0%
on a 2-year basis; H2 LFL(#) revenue growth of 12.4%
-- Retail LFL(#) revenue growth of 8.8%, or 17.3% on a 2-year
basis; H2 LFL(#) revenue growth of 11.9%
-- Omnichannel revenue(#) growth of 71.7%, or 119.0% on a 2-year
basis, with previous investment in distribution capacity and
fulfilment capability supporting participation of Retail revenue of
15.8% in the year up from 10.0% in the prior year
-- Vet Group revenue and LFL(#) revenue growth of 1.6% and 7.9%
respectively, with LFL revenue growth of 13.2% on a 2-year basis.
LFL customer sales(#1) growth across all First Opinion practices of
9.5%, and LFL Joint Venture fee income up 6.3%; LFL customer
sales(#) growth across all First Opinion practices was 19.1% in H2,
with H2 LFL Joint Venture fee income +17.6%
-- Group underlying PBT(#) of GBP87.5m, ahead of guidance.
Represents a decline of 6.4% YoY and is post an adverse
Covid-related impact on profit of approximately GBP30m and the
repayment of GBP28.9m of business rates relief. Growth in H2 Group
underlying PBT(#) of 22.0% after adjusting for timing of business
rates payment. Group statutory PBT of GBP116.4m including GBP30.2m
relating to profit on the disposal of our Specialist Group
-- Group underlying free cash flow(#) of GBP67.4m, reflecting
strong cash generation across our First Opinion veterinary
practices and a material increase in practice profitability
-- Net cash (pre-IFRS16) of GBP1.4m (net cash/EBITDA of 0.0x)
and total liquidity(2) , comprising cash balances and undrawn
portion of GBP248m RCF, of GBP248.8m
-- Final dividend per share of 5.5p, an increase of 10% YoY,
reflecting our strong cash generation and robust balance sheet,
giving a total dividend of 8.0p for the year, up 7% YoY
-- Strong underlying growth in our second half
-- H2 Retail LFL(#) revenue growth of 11.9% reflecting
broad-based growth across categories and channels including 4.9%
store LFL(#) growth, notwithstanding a second national lockdown in
England
-- H2 LFL customer sales(#) growth of 19.1% across all First
Opinion practices reflecting over 9,000 new client registrations
per week and driving continued improvement in profitability
-- Leveraging data insights to drive customer lifetime value and
increase the proportion of annuity-like income:
-- The number of VIPs increased 9% YoY to 6.2m, with those
shopping across more than one channel up 10% YoY and representing
26% of VIPs.
-- The number of Puppy and Kitten Club members grew 60.9% YoY
with sign-ups in H2 double that of the prior year; Puppy and Kitten
Club members typically spend 34% per annum more than non-members
across the Group
-- The number of subscription customers across the Group grew
21% YoY to over 1.0m, generating over GBP90m in annualised
recurring customer sales
-- Estimated 8% increase in UK pet ownership over the past year
has raised the outlook for growth across our addressable market
and, in conjunction with our expectations of continuing to win
market share, provides a supportive backdrop to the GBP600m
customer revenue opportunity we see across our business over the
medium term.
1. Customer sales include gross customer sales made by Joint
Venture vet practices, and differs to the fee income recognised
within Vet Group revenue.
2. Comprising GBP1.4m net cash and GBP247.4m undrawn facility,
being RCF of GBP248m less GBP0.6m carved out as a deferment account
guarantee.
# Alternative Performance Measures (APMs) are defined and
reconciled to IFRS information, where possible, on page 85.
All FY21 APMs include the impact of IFRS16 unless explicitly
stated.
Current trading and outlook
The start of our current financial year has seen a continuation
of the strong momentum across our retail and veterinary
operations.
While the emergence of new variants of the virus and the
potential for higher transmission levels as the UK continues to
unlock mean the external environment remains uncertain in the near
term, our pet care model remains robust, and the changes we have
made to our business enable us to continue providing pet care to
our customers with minimal disruption.
At this early stage of the new financial year and considering
both the ongoing momentum across our business and the continuing
impact of the pandemic on operating costs, we anticipate that Group
underlying pre-tax profit for the 53 weeks to 31 March 2022 will be
in the range of GBP120m to GBP130m.
Our next scheduled update will be our Q1 FY22 update on 29 July
2021.
Peter Pritchard, Group Chief Executive Officer:
We ended this unprecedented year a far stronger pet care
business. Despite challenges to how we were able to do business, we
grew our market share across all channels and our underlying growth
trajectory accelerated. Our loyalty clubs saw record periods of new
customer registration, strong growth in subscription customers
increased the visibility and quality of our sales profile, whilst
new clients across our veterinary estate helped increase practice
profitability and cash flow. We achieved all of this while
remaining mindful at all times of doing the right thing for all our
stakeholders.
Covid-19 has structurally changed the dynamics of the pet care
market. We estimate that the rising level of pet ownership,
combined with structural demand drivers such as premiumisation and
humanisation, has increased the outlook for growth across our
addressable market, and in conjunction with our expectations of
continuing to take market share, provides a tailwind to the GBP600m
customer revenue opportunity we see across our business over the
medium term.
We will, as the UK's leading omnichannel pet care provider,
capitalise on this opportunity through continued investment in our
infrastructure, further digitising our business and leveraging our
extensive and unique dataset to provide insight throughout the
customer lifetime to support investment decision-making that will
drive quality and profitable growth.
I am incredibly grateful for the tireless efforts of all our
colleagues and Partners across the Group in the most challenging of
environments and am very proud of their collective achievements
this year. I look to the future with much confidence.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulations (Regulation (EU)
No.596/2014). For the purposes of MAR and Article 2 of Commission
Implementing Regulation (EU) 2016/1055, this announcement is being
made on behalf of the Company by Roger Tejwani, Director of
Investor Relations & External Communication.
Results webcast
An audio webcast and presentation of these results will be
available on our website (
https://investors.petsathome.com/investors/ ) from 07.00am on 27
May. Management will host a Q&A conference call for analysts
and investors at 09.00am. To join the call in listen-only mode,
please click on the following link (
https://brrmedia.news/PETS_FY21 ). Those wishing to participate in
the Q&A session should email petsathome-Maitland@maitland.co.uk
for call details.
# Alternative Performance Measures (APMs) are defined and
reconciled to IFRS information, where possible, on page 85.
All FY21 APMs include the impact of IFRS16 unless explicitly
stated.
Investor Relations Enquiries
Pets at Home Group Plc:
Roger Tejwani, Director of Investor Relations & External
Communication
+44 (0)1279 927022
Chris Ridgway, Head of Investor Relations
+44 (0)7788 783925
Media Enquiries
Pets at Home Group Plc:
Natalie Cullington, Head of Media & Corporate Affairs
+44 (0)7786 927811
Maitland:
Clinton Manning
+44 (0)7711 972662
Joanna Davidson
+44 (0)7827 254567
About Pets at Home
Pets at Home Group Plc is the UK's leading pet care business;
our commitment is to make sure pets and their owners get the very
best advice, products and care. Pet products are available online
or from our 452 stores, many of which also have vet practices and
grooming salons. Pets at Home also operates a UK leading small
animal veterinary business, with 441 First Opinion practices
located both in our stores and in standalone locations. For more
information visit: http://investors.petsathome.com/
Disclaimer
This trading statement does not constitute an invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any
Pets at Home Group Plc shares or other securities nor should it
form the basis of or be relied on in connection with any contract
or commitment whatsoever. It does not constitute a recommendation
regarding any securities. Past performance, including the price at
which the Company's securities have been bought or sold in the
past, is no guide to future performance and persons needing advice
should consult an independent financial adviser. Certain statements
in this trading statement constitute forward-looking statements.
Any statement in this document that is not a statement of
historical fact including, without limitation, those regarding the
Company's future plans and expectations, operations, financial
performance, financial condition and business is a forward-looking
statement. Such forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially.
These risks and uncertainties include, among other factors,
changing economic, financial, business or other market conditions.
These and other factors could adversely affect the outcome and
financial effects of the plans and
events described in this statement. As a result you are
cautioned not to place reliance on such forward-looking statements.
Nothing in this statement should be construed as a profit
forecast.
Chief Executive Officer's Review
An extraordinary year in review
The start of our financial year coincided almost exactly with
implementation of the UK's first national lockdown, marking what
would become the most extraordinary period across my thirty-five
years in industry.
Our immediate priorities were to ensure the safety and wellbeing
of all our colleagues, Partners, customers, and pets, and we
rapidly adapted our retail and veterinary operations to be able to
continue providing essential pet care to our customers in a safe
and appropriate manner.
Recognising that Covid-19 would be a catalyst for change around
customer purchasing behaviour and pet ownership, we accelerated
investment into our loyalty clubs and subscription platforms, and
introduced new ways to engage, serve and fulfil our customers'
needs across all channels, making pet care as convenient, engaging
and flexible as possible.
These measures, together with the inherent strength of our pet
care platform and the underlying pet care market, underpinned the
strong and sustained momentum witnessed in both our retail and
veterinary operations across the last three quarters of the year,
notwithstanding national or regional pandemic-related restrictions
throughout much of the period.
Despite the wide-ranging impact of the pandemic, we ended the
year a far stronger pet care business. We continued to grow our
market share across all channels and our underlying growth
trajectory accelerated. Our VIP and Puppy and Kitten clubs saw
record periods of new customer growth, many of whom are already
shopping across multiple channels of our pet care ecosystem, strong
growth in subscription customers increased the visibility and
quality of our sales profile, and new client registrations across
our veterinary estate have improved practice profitability and cash
flow.
We continued to shape our business to align with our strategic
focuses, disposing of our Specialist Group for up to GBP100m in
cash and deferred consideration and broadening our digital pet care
capabilities through the acquisition of The Vet Connection, a
long-established veterinary telehealth provider.
We also ensured that our preparations to mitigate any potential
impact on the business relating to the UK's exit from the European
Union were in place well ahead of the transition deadline.
We achieved all of this while remaining mindful at all times of
our ongoing obligations as a responsible corporate citizen,
increasing our support to nominated charities, continuing to pay
our suppliers and landlords, voluntarily repaying GBP28.9m of
business rates relief, and implementing several measures for our
colleagues to support their emotional and financial wellbeing. We
also took the decision across our Group-owned businesses not to
participate in any of the government's support schemes.
Key Performance Indicators
Financial KPIs(1) FY21 FY20 YoY change
-------------------------- --------------------------------- -------- -------- -----------
Customer sales(#, 2) (GBPm) 1,437.1 1,334.7 7.7%
------------------------------------------------------------- -------- -------- -----------
Group underlying PBT(#) (GBPm) 87.5 93.5 (6.4)%
------------------------------------------------------------- -------- -------- -----------
Group underlying free cashflow(#) (GBPm) 67.4 89.6 (24.8)%
------------------------------------------------------------- -------- -------- -----------
Strategic KPIs Measure FY21 FY20 YoY change
-------------------------- --------------------------------- -------- -------- -----------
Bring the pet experience No. of customer transactions(3)
to life (m) 60.0 63.1 (4.9)%
-------------------------- --------------------------------- -------- -------- -----------
50% of sales from pet Customer sales(#, 2)
care services from services 32.8% 34.1% (129)bps
-------------------------- --------------------------------- -------- -------- -----------
Use our data to better VIP customer sales(#,
serve customers 2, 4) (GBPm) 887.1 817.2 8.6%
-------------------------- --------------------------------- -------- -------- -----------
Set our people free Customer sales(#, 2)
to serve per colleague (GBPk) 196.7 187.0 5.2%
-------------------------- --------------------------------- -------- -------- -----------
1. Financial KPIs shown above 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.
2. Customer sales include gross customer sales made by Joint
Venture vet practices of GBP358.1m (FY20: GBP329.7m) (unaudited
figures), and therefore differs to the fee income recognised within
Vet Group revenue
3. Includes customer transactions in-store, online, in First
Opinion vet practices, cases treated in our Specialist Group plus
pets groomed in Groom Room salons
4. VIP customer sales are shown on a rolling 12-month basis and
include gross spend at First Opinion vet practices
Despite such progress, we are still in the early stages of our
journey to become the best pet care business in the world, and
there remains plenty to strive for and achieve as we continue our
transformational journey.
Covid-19 has structurally altered the dynamics of the pet care
market. We estimate the overall number of pets in the UK has
increased by approximately 8% over the past year which, together
with demand drivers such as premiumisation and humanisation, has
increased the outlook for growth across our addressable market and,
in conjunction with our expectations of continuing to take market
share, provides a tailwind to the GBP600m customer revenue
opportunity we see across our business over the medium term.
We will, as the UK's leading omnichannel pet care provider,
capitalise on this opportunity by continuing to invest in our
infrastructure to provide best-in-class customer service and
convenience and leveraging our extensive and unique dataset to
increase customer lifetime value, enhancing the quality and
visibility of our growth and profitability.
In addition, over the next 18 months, we will invest over GBP20m
in further digitising our business through "Polestar", our
transformational initiative to create a seamless pet care
experience for our customers using a differentiated digital
interface which will, we believe, be the first of its kind in the
UK pet care market and offer us significant competitive
advantage.
None of this would be possible without the ongoing support of
our hardworking, passionate and skilled colleagues and Partners
across the Group, who have demonstrated remarkable resilience by
working tirelessly in adverse circumstances over the past year. I
am incredibly grateful for their commitment and equally proud of
their successes and look forward to achieving much more
together.
I. The outlook for growth has strengthened across the UK pet
care market
We operate in a large, growing and robust market, which had an
estimated value pre-Covid of approximately GBP6.1bn across our
segments.
Prior to the onset of the pandemic, the pet population of dogs
and cats in the UK had been in steady state, with pet humanisation,
premiumisation and healthcare and nutritional advancement being the
predominant drivers of average annual UK market growth of
approximately 3.5%.
Covid-19 has structurally altered the dynamics of the UK pet
care market, with changes to the way we work and spend our leisure
time removing an historical barrier to pet ownership and
strengthening the emotional bond with pets as they play a more
significant role in our daily lives. Anecdotal evidence over the
past year, across animal welfare charities, pet marketplaces and
pet registration forums, points to a significant increase in pet
ownership, a good proxy for elevated levels of future market
growth.
Across our internal pet care indicators - growth in membership
of our VIP and Puppy and Kitten Clubs, new client registrations
across our First Opinion veterinary practices and growth in puppy
and kitten merchandise categories - we estimate that the overall
number of pets in the UK has grown by 8% over the past year, which,
combined with prevailing structural tailwinds, has increased the
future annual underlying growth rate of our addressable market by
approximately 100bps.
II. We are growing our share of pet care and see a GBP600m
customer revenue opportunity
Our share of the pet care market pre-pandemic had grown to
approximately 20% across our segments, with our strategy to
reposition the business from a pet shop to an omnichannel pet care
provider underpinning a shift in revenue mix towards high growth
veterinary services, online and subscriptions, and delivering
consistent market share gains since 2016.
We continued to increase our share across all channels of this
growing market over the past year, with LFL revenue growth across
our retail, omnichannel and veterinary operations ahead of their
respective segments. Market supplier data implies an estimated
200bps increase, in-store and online, in our share of trade of key
branded dog and cat food categories during calendar year 2020, with
sequential growth over the last three quarters and, combining our
internal data with a range of third-party UK market reports, we
estimate that our share of the pet care market across our segments
increased to approximately 23%.
Looking ahead, we see a GBP600m customer revenue opportunity
across our business over the medium term, as we continue to take
share of a growing market, increase our revenue weighting in high
growth segments, and continue to repurpose our core customer
proposition from transactional and channel centric to one that is
solutions-based and channel-agnostic.
In this respect, our truly omnichannel backbone is one of our
key sustainable advantages.
III. The strategic advantages of our omnichannel pet care
model
We are the leading omnichannel pet care provider in the UK, with
a growing and scalable online platform complemented by a 452-strong
estate of well-invested, conveniently located stores across the UK,
many of which are playing an increasingly important role in our
omnichannel strategy.
The combination of our store, online, grooming, veterinary and
digital services gives us a presence across the full pet care
market, allowing us to meet pet owners' needs across multiple touch
points across the lifetime of their pets, and drive engagement,
loyalty and retention.
Our stores bring the pet care experience to life
Our stores, combining a wide range of attractively priced and
predominantly UK-sourced branded and own label products with
veterinary and grooming services and expert advice, have been key
in acquiring new customers during the pandemic. Put simply, they
allow pet owners to meet all their product and service needs under
one roof in a safe, localised and experiential environment, and
provide a suitable alternative for grocery-led shoppers seeking
either brand continuity or a more tailored advanced nutrition
approach through our market-leading own label brands.
Our online operations integrate our physical and digital
channels to maximise convenience
We estimate that our share of the online pet care market
increased by approximately 200bps to 16.8% over the past year. Our
omnichannel participation of retail sales moved from approximately
10% pre pandemic to an average of 15.8% in FY21, as investment in
distribution capacity over the past couple of years supported
elevated levels of online demand with minimal disruption.
During the year, we simplified the remote sign-up process to our
loyalty programmes and subscription plans, underpinning 34% growth
in annualised subscription sales, and enabled home delivery of
veterinary medicines, which grew 35% in the period.
We also extended choice and flexibility for customers, investing
in innovative ways to integrate our physical and digital channels,
including "Deliver to Car" across more than 150 stores and a one
hour Click and Collect service across the full estate, which has
surpassed initial expectations.
Towards the end of calendar 2020, recognising the growing
importance of telehealth through the pandemic, we broadened our
digital capabilities in the provision of trusted advice and pet
care solutions through the acquisition of The Vet Connection, an
established and successful provider of on demand, high quality,
round-the-clock veterinary telehealth advice, triage and ancillary
services, which is helping to differentiate our proposition and
drive customer acquisition and retention.
Our veterinary services are an integral part of our pet care
ecosystem
We also increased our share of the veterinary market during the
year, with new client registrations across our 441 practices
comprising approximately 9% of all veterinary visits in our second
half, reflecting an increase in pet ownership over the past year as
well as a higher number of existing pet owners choosing our
veterinary services for the first time.
This strong performance is a clear endorsement of our unique
veterinary joint venture model, where our Partners are
incentivised, economically and clinically, to drive practice
maturity, with marketing and support services provided at Group
level. This model has worked especially well through the pandemic
where we were able to support our Partners to remain open and
accessible for the provision of pet care. It is also one of the key
reasons why even our mature practices typically grow at a faster
rate than the underlying market.
The health of our veterinary estate continued to improve, with
customer sales across our First Opinion practices of approximately
GBP384m over the past year, an increase of 21% on a two-year basis.
The number of loss-making practices more than halved year on year,
the number of profit-making practices has increased again this
year, and a step change in both the reduction of operating loans
and cash flow generation is demonstrating that remedial action
previously taken, as well as supportive measures implemented during
the pandemic, is helping to accelerate practice maturity and
release embedded value.
Our colleagues share an ambition to be the best pet care
business in the world
Having a best-in-class suite of assets is, however, only half
the solution, and many of our achievements this year would not have
been possible without the energy, passion and skill of all our
colleagues and Partners across the Group.
We have not been immune to the challenges that Covid-19 has
created and, while we were pleased to be able to implement a number
of measures to support their emotional and financial wellbeing,
including offering full pay to those that were shielding and
clinically vulnerable, additional support for those with caring
responsibilities, a GBP1.0m hardship fund, and an incremental Thank
You bonus totalling GBP2.9m to frontline colleagues, I would
personally like to take this opportunity, on behalf of our
Executive Management Team, to thank them all for their tireless
work and dedication in serving our customers' needs during such
challenging times.
IV. Accelerating investment to grow the Pets at Home
ecosystem
Three things are fundamental in supporting our ambition to be
the best pet care business in the world.
-- Investing in our infrastructure to provide a best-in-class
customer experience;
-- Further digitising our business to create a seamless pet care
experience;
-- Leveraging our data to increase customer lifetime value and
annuity-like income
Investing in our infrastructure to provide a best-in-class
customer experience
It would be outdated to describe our next generation pet care
centres as stores. We see them as destinations to connect and
engage with local communities of pet owners and their pets,
providing all their product and healthcare needs in one location
which brings the pet experience to life through multi-use event
space, pet care services, training and socialising classes and
nutritional consultations.
While we paused our regeneration programme during the pandemic,
we plan to restart the process this year, utilising the learnings
from our 23 transformations to date. We have also recently launched
two smaller, high street pet care centres inside the M25 London
Orbital Motorway, where we are currently underrepresented, but a
meaningful opportunity exists. The performance of these new centres
will help to inform our decision-making on wider rollout within
Greater London.
The role our stores play in accelerating our omnichannel
strategy is also becoming increasingly significant, with their wide
geographical footprint and proximity to our customers positioning
them well as localised distribution centres as part of our ambition
of delivering frictionless execution, convenience and speed. Our
new Order Management System, providing real-time intelligence on
optimal order management and routing across our nationwide estate,
will enable us, alongside our centralised distribution model, to
offer localised same day delivery from store to home, embedding
best-in-class fulfilment while generating operational efficiencies
across the Group.
We also have a clear ambition to transform the responsiveness of
our supply chain and during the year signed a lease agreement for a
new purpose-built, highly automated storage and distribution
facility in Stafford, which will come on-stream during 2023.
Consolidating our legacy infrastructure into a modern,
well-located, and future focused platform, that serves both our
store and online operations, will give us significant incremental
capacity across our subscription platforms and enable us to better
serve our customers through maximum flexibility in stock holding
and order fulfilment capacity.
Across our veterinary operations, we will invest in
infrastructure and resource to enhance practice revenues through
widening our service offering and improved call handling
efficiency, and our recent acquisition of The Vet Connection will
enable us to differentiate our veterinary proposition to support
new client acquisition and retention.
We also plan to re-start new practice rollout this year,
targeting between 5 and 10 new sites per annum.
Further digitising our business to create a seamless pet care
experience
At the heart of our pet care strategy lies a clear and
unequivocal customer first approach, offering everything pet owners
need and empowering them to search, shop for and receive their
goods and services however and whenever they choose.
Achieving this requires us to facilitate customer journeys
across our suite of products and services that are based on a deep
understanding of their pet care needs and are supported by
integrating our well-invested store estate, our fast-growing online
business and an efficient and responsive supply chain into a
seamless experience that really brings the customer pet care
experience to life.
Over the past year, we have undertaken more joined-up TV and
digital marketing campaigns across our subscription platforms and
Puppy and Kitten Club and digitised the sign-up process, with
approximately 80% of the record level of new puppy and kitten
sign-ups coming through our app. Our stores have also become more
digitally enabled through investment in IT solutions to simplify
daily tasks and video functionality to link instore colleagues to
online customers.
This is, however, just the start of our journey to provide an
enhanced, joined-up digital experience.
We will, over the next 18 months, be investing over GBP20m in
"Polestar", our transformational initiative to create a seamless
pet care experience for our customers through a differentiated
digital interface offering new features, functionality, and
capability to integrate our offering across retail, grooming and
veterinary services into a single, customer-managed dashboard.
This is one of our most significant investments to date and
will, we believe, be the first of its kind in the UK pet care
market, offering us significant competitive advantage.
Customers will, for example, through a single, universal login,
be able to access all touchpoints across the Group, whether joining
our loyalty clubs, booking, and managing veterinary and grooming
appointments or paying for goods and services across our ecosystem.
Subscription customers will be able to manage their preferences
across all our plans through a single platform and will be given
more choice in tailoring plans to real-time needs, including a
variety of flexible payment and delivery options.
For new pet owners, we will make pet care easier, more
convenient, and emotionally rewarding by offering them the
products, services and expert advice they need through a personal
shopping appointment in-store or online, and our "first pet
checklist" with pet-specific, comprehensive pet care solutions
tailored by pet type and breed will, we believe, deliver a
best-in-class first shop experience.
Leveraging our data to increase customer share of wallet and
annuity-like income
Our base of 6.2m active VIP customers, many of whom are multiple
pet owners, continues to grow strongly, increasing the breadth and
depth of our unique proprietary customer and pet dataset.
We have in-housed all our VIP customer data onto a cloud-based
platform and assembled a team of 45 data scientists and engineers
who are providing data insights across the business to inform
decision-making on pricing, range optimisation and logistical
efficiencies.
We have also developed a single customer and household view of
pet ownership across all parts of our business, which will enable
us to more accurately predict customer preferences and
responsiveness to specific campaigns, personalise customer
interaction through timely, pet-specific and integrated solutions
across the full lifecycle of the pet, and predict which customers
are most at risk of churn at both brand and range level, allowing
us to generate algorithmically-targeted and relevant
interventions.
While the benefits flowing from our data insights will only
increase over the coming year, early indications of the potential
for higher levels of engagement and spend are extremely
encouraging.
Across four VIP reward mailers (using over 300 pieces of data at
an individual customer level to optimise the audience based on
probability of response) customers that were specifically targeted
spent at least a third more than those outside of the group, but
within the same segment, and our recent Grooming campaign generated
a c50% uplift in spend specific to a single mailer from customers
that were targeted compared to the control group.
Our initial test churn campaign, using an "always on" AI-based
predictive churn model, increased both VIP activity rate and value
during the campaign, the latter by one third. In a separate, more
recent churn campaign, over half of customers that initially
responded to the reactivation offer transacted with us again
outside of the offer.
While many of our VIPs already shop a range of our products and
services, a significant opportunity remains to leverage our data to
i) drive customer acquisition through our Puppy and Kitten club and
ii) deepen new and existing customer relationships and improve our
earnings quality through broadening our offering of Pet Care Plans,
which span our full range of products and services and move the
customer relationship from single product or service to one that is
tailored and multi-faceted.
-- Drive customer acquisition through our Puppy and Kitten
club
Our free-to-join Puppy and Kitten Club, designed to attract pet
owners at the start of their journey and introduce them to all
parts of our ecosystem, has been particularly successful in
acquiring new customers over the past year.
We know that members of the club respond well to our tailored
CRM programme, typically spending 34% more in each year and with
less churn than inferred puppy and kitten owners not in the club,
and we can utilise our insights on existing members to identify
prospects amongst existing VIPs, attract new customers to the
Group, finesse our digital marketing campaigns and refine our
in-store and online proposition.
We will also leverage the important role our veterinary services
play for new pet owners, maximising the flow through of accelerated
Puppy and Kitten Club customer acquisition in our retail operations
to our veterinary practices through the introduction of a bespoke
subscription, "Complete Care Junior", designed to offer a tailored
and continuous care plan journey for new puppies and kittens based
on their life stage needs, and the first to include access to our
24-hour veterinary care helpline.
-- Pet Care Plans deepen the customer relationship and improve
our earnings quality
We know from our veterinary business that our Healthplan
subscriptions, designed to make pet care easy, convenient, and
affordable, increase customer loyalty and spend, and grow our mix
of annuity-like income. We also know that customers who shop across
our ecosystem of products and services spend on average 9x more per
annum than a store only shopper, and their use of services and
subscriptions increases their retention across the business.
We believe that Covid-19 is accelerating the already growing
trend of subscription models in the market, as consumers seek ways
to access goods and services conveniently at good value, and we are
well-placed to address this growing trend. We operate in market
segments that lend themselves to subscription packages and have the
unique ability to consolidate a broad range of pet care products
and physical and digital services into a single personalised plan
to optimise value and convenience for pet owners across all life
stages of pet ownership.
Utilising the data insights from our current database of over
one million subscription customers, we can identify customers with
a propensity to subscribe or become multi-service users across our
6.2m VIP customers, accelerate the recruitment of new customers
through relevant, tailored propositions and, combining our
omnichannel and fulfilment capabilities, use our Pet Care Plans to
create a point of differentiation and retention that competitors
cannot easily replicate.
V. Responsible, quality, profitable growth over the medium
term
None of this would be possible without the ongoing support of
our colleagues and Partners across the Group. Colleague wellbeing
has long been an integral part of our culture, and we continually
seek new ways to invest in their learning and development and
foster an inclusive culture where everyone is welcome.
We are proud of the progress we have made, in an unprecedented
year, to narrow our mean gender pay gap and improve diversity
across our organisation, and I was pleased to note external
recognition of this in the Financial Times 2020 Diversity Leaders
Report, where across the Retail sector Pets at Home was ranked
7(th) , out of a total 85 constituents. During the past year we
were also delighted to join both the Business Disability Forum and
Disability Confident scheme and Stonewall, and to become a
signatory to the Valuable 500, British Retail Consortium (BRC)
diversity commitment and BITC Race at Work Charter.
Meeting our obligations as a responsible corporate citizen has
remained paramount throughout the pandemic. We continued to pay our
landlords and suppliers, allocated GBP1.3m to pet rescue centres,
GBP0.1m to CaRE20 and provided a 10% discount scheme to NHS
workers.
We have also recently launched a new social value strategy, "Our
Better World Pledge", centred on the three pillars of Pets, People
and Planet and underpinned by several specific goals, actions and
targets. Amongst our many pledges are commitments to a net zero
carbon value chain by 2040 and 100% packaging that is recyclable,
recycled or compostable by 2025.
We are already piloting in-store collection points for flexible
plastics, tackling the largest category of non-kerbside collected
pet food packaging, with a nationwide rollout planned from summer
2021, and have become a signatory to the BRC climate roadmap, as
part of a world-leading industry ambition to reach net zero
emissions.
We operate in a large, growing and robust market, with
favourable demographics and structural tailwinds. We have a unique
combination of assets, customer DNA and omnichannel pet care
expertise which can be leveraged through growing our data and
digital capabilities to drive share gains in high-growth market
segments. We will continue to make the right investments,
organically and inorganically, across both core and adjacent
markets to responsibly deliver quality and profitable growth over
the medium term.
Peter Pritchard
Group Chief Executive Officer
27 May 2021
Chief Financial Officer's Review
The FY21 audited period represents the 52 weeks from 27 March
2020 to 25 March 2021. The comparative period represents the 52
weeks from 29 March 2019 to 26 March 2020.
The Group's results are shown as three segments that represent
the size of the respective businesses and our internal reporting
structures; Retail (includes products purchased online and
in-store, pet sales, grooming services and insurance products), Vet
Group (includes First Opinion practices and Specialist Referral
centres) and Central (includes Group costs, finance expenses and
the Group's telehealth business).
The Group completed its disposal of its five Specialist Referral
centres (the "Specialist Group") on 31 December 2020 and therefore
the financial information shown for FY21 includes an element of
discontinued operations, however given the immateriality of these
operations (revenue GBP33.9m, underlying EBIT GBP1.8m) to Group
revenue and profit they have not been disclosed separately.
FY21 FY20 YoY change
Group like-for-like revenue growth(#) 8.7% 9.0%
Retail 8.8% 9.4%
Vet Group 7.9% 5.6%
Group revenue (GBPm) 1,142.8 1,058.8 7.9%
--------------------------------------- -------- -------- -----------
Retail 1,018.9 937.6 8.7%
-----------
Vet Group 123.2 121.2 1.6%
-----------
Central 0.7 - NM
--------------------------------------- -------- -------- -----------
Group underlying gross margin(1,#) 48.9% 48.9% (2) bps
-----------
Retail 49.2% 49.7% (50) bps
-----------
Vet Group(1) 46.0% 42.7% 334 bps
===========
Group underlying EBIT(2,3,#) (GBPm) 105.9 111.3 (4.8)%
Retail 79.5 89.3 (11.0)%
Vet Group(2,3) 36.0 30.6 17.6%
--------------------------------------- -------- -------- -----------
Central (9.6) (8.6) (11.6)%
--------------------------------------- -------- -------- -----------
Group underlying EBIT margin(2,3,#) 9.3% 10.5% (124) bps
--------------------------------------- -------- -------- -----------
Retail 7.8% 9.5% (172) bps
--------------------------------------- -------- -------- -----------
Vet Group(2,3) 29.2% 25.2% 398 bps
===========
Group underlying PBT (#) (GBPm) 87.5 93.5 (6.4)%
-----------
Group statutory PBT (GBPm) 116.4 85.9 35.5%
-----------
Underlying basic EPS(1,2,3,#) (p) 14.0 15.0 (6.8)%
-----------
Statutory basic EPS (p) 19.8 13.5 47.1%
-----------
Group statutory net income (GBPm) 99.0 67.4 47.1%
-----------
Group non-underlying items(1,2,3)
(GBPm) 28.9 (7.6) NM
-----------
Group non-underlying cash costs(4)
(GBPm) (5.5) (16.4) (66.5)%
-----------
Group underlying free cashflow (#)
(GBPm) 67.4 89.6 (24.8)%
Dividend (p) 8.0 7.5 6.7%
Number of
--------------------------------------- -------- -------- -----------
Stores 452 453 (1)
-----------
Grooming salons 316 316 -
-----------
Joint Venture First Opinion vet
practices 395 396 (1)
--------------------------------------- -------- -------- -----------
Company managed First Opinion vet
practices 46 45 1
--------------------------------------- -------- -------- -----------
1. FY21 non-underlying credit of GBP0.6m relates to the release
of a provision held against property leases. FY20 non-underlying
charges of GBP6.6m relate to costs incurred by the Group in buying
out, and in some cases closing, JV practices. Both items have been
allocated against Vet Group, and Group, non-underlying gross
margin.
2. FY21 non-underlying charges of GBP1.9m relate to an
accounting charge for minority stakes owned by vet partners in the
Specialist Group, prior to the disposal on 31 December 2020, which
has been charged against non-underlying operating costs (FY20:
GBP1.0m)
3. FY21 non-underlying credit of GBP30.2m relating to the profit
on disposal of the Specialist Group (FY20: GBPnil) has been
allocated against non-underlying operating costs.
4. FY21 non-underlying cash costs include GBPnil (FY20:
GBP10.0m) relating to practices that we have bought out, plus
GBP5.5m (FY20: GBP6.4m) in relation to payments made to Shared
Venture Partners in our Specialist Group to acquire certain
remaining minority stakes
Impact of Covid-19 on the FY21 financial statements
Throughout the year and particularly in the first quarter,
Covid-19 impacted the Group by placing revenue restrictions on the
business and leading us to incur both one-off costs and ongoing,
additional operational costs.
We temporarily closed our grooming salons and stopped the sale
of pets, and our First Opinion practices and Specialist Referral
centres were subject to regulatory restrictions on permitted
procedures. We incurred additional costs through, inter alia,
social distancing measures across our stores and distribution
centres, the provision of personal protective equipment, cleaning
and sanitisation, and pet welfare, as well as through the payment
of an additional Thank You bonus to frontline colleagues and
enhancing our Colleague Hardship Fund.
This resulted in an estimated GBP30m adverse financial impact in
the year, all of which is included in our underlying results.
We took the decision across our Group-owned businesses not to
participate in any of the government's support schemes including
the Job Retention Scheme (JRS), the Job Retention Bonus, and the
Coronavirus Large Business Interruption Loan Scheme (CLBILS), and
we voluntarily repaid GBP28.9m in business rates relief.
While the impact of Covid remains, we have planned for ongoing
additional operational costs across both our stores and
distribution centres of approximately GBP9m for the year ahead and
will monitor this closely as the year progresses.
Impact of IFRS16 on the FY21 financial statements
The financial information in pages 12 to 16, and associated
commentary, have been presented on a constant accounting basis and
reflect the impact of IFRS16, which was fully implemented in the
prior year. The impact of IFRS16 on the Group financial statements
is shown on page 16.
Revenue
Group revenue in FY21 grew 7.9% to GBP1,142.8m (FY20:
GBP1,058.8m) and like-for-like (LFL) revenue grew 8.7%(#) . In H2
Group revenue grew by 10.9%, with Group LFL revenue growth of
12.4%.
Retail revenue grew 8.7% to GBP1,018.9m (FY20: GBP937.6m),
including omnichannel revenue growth of 71.7% to GBP161.3m,
representing 15.8% of total Retail revenue (FY20: 10.0%). The LFL
revenue growth in Retail was 8.8%(#) for the period and 11.9% in
H2. Retail LFL revenue grew by 17.3% on a 2-year basis.
Food revenue grew by 6.6% to GBP551.5m (FY20: GBP517.4m),
reflecting our success in recruiting new customers throughout the
year, as more people became pet owners for the first time.
Accessories revenue grew 15.0% to GBP431.4m (FY20: GBP375.3m),
with significant growth in categories such as leads and bedding as
humanisation continues to drive customer spend. Grooming revenues
declined by 29.2% in the year to GBP19.6m (FY20: GBP27.7m),
reflecting closure of all salons for the first 10 weeks of the
year, with some form of Covid-related restrictions in place for
much of the year.
Vet Group revenues grew 1.6% to GBP123.2m (FY20: GBP121.2m),
with LFL growth of 7.9%(#) , despite varying degrees of
restrictions on permitted procedures throughout much of the year.
In H2 Vet Group revenues grew by 3.4%, with LFL growth of 17.2%,
with the difference between total and LFL revenue growth being
driven by the disposal of the Specialist Group on 31 December 2020.
Customer sales made by all First Opinion vet practices were up 9.2%
to GBP383.6m(#) (FY20: GBP351.3m).
Total Joint Venture fee income increased by 6.0% to GBP57.0m
(FY20: GBP53.8m), with LFL fee income up 6.3%(#) (FY20: 2.1%). The
growth in fee income is lower than that seen in customer sales due
to the fee adjustments which have been in place for some JV
practices throughout the year. Our program of fee adjustments
completed in the year as planned and fully annualised in the second
half of the year such that, in H2, growth in First Opinion customer
sales and JV fee income was more closely aligned, at 19.4% and
17.9% respectively.
Consolidated customer revenues (#) from company managed First
Opinion practices increased by 17.7% to GBP25.5m (FY20:
GBP21.7m).
Revenue of GBP0.7m was recognised within our Central division in
relation to The Vet Connection, the financial performance of which
has been fully consolidated since the acquisition on 30 November
2020.
LFL Sales Growth FY21
------------------ -----------------------------------
H1 H2 Full Year 2-year
------------------ ------ ------ ---------- -------
Retail 5.8% 11.9% 8.8% 17.3%
Of which:
Stores(1) 0.7% 4.9% 2.7% 9.0%
Omnichannel(2) 65.8% 77.6% 71.7% 119.0%
------------------ ------ ------ ---------- -------
Vet Group 1.2% 17.2% 7.9% 13.2%
------------------ ------ ------ ---------- -------
Group 5.3% 12.4% 8.7% 17.0%
------------------ ------ ------ ---------- -------
1. Store sales includes live pet sales.
2. Defined as orders placed online at petsathome.com and
in-store using our order-in-store service for both delivery to home
and collection in-store, plus subscriptions to monthly flea &
worm treatments via our 'Subscribe & Save' platform.
Gross margin
Underlying group gross margin remained broadly flat
year-on-year, declining by 2 bps to 48.9% (FY20: 48.9%), despite
strong growth in grocery food sales, which are at a lower
percentage margin.
Gross margin within Retail was 49.2%, a reduction of 50 bps over
the prior period (FY20: 49.7%), albeit with a 70-bps improvement in
H2. This reflects four main impacts; the restrictions on grooming
services which had a dilutive impact on gross margin as we
continued to employ our grooming colleagues, whose costs are
allocated to gross margin, a mix benefit driven by strong growth
within accessories, beneficial terms with our suppliers partly
driven by volume, as well as the external factors of foreign
exchange and increased freight costs.
In the year, we incurred a year-on-year foreign exchange impact
of 29 bps as our average dollar hedged rate weakened from 1.33 to
1.28, as well as a 26-bps impact from increased freight costs. In
the current financial year, 100% of our forecast USD spend is
currently hedged at a rate of 1.35 and we have planned for
increased freight costs for at least the first half of the
financial year.
Underlying gross margin(#) within the Vet Group increased by 334
bps to 46.0% (FY20: 42.7%). This increase reflects the strong sales
growth across both our Joint Venture and company managed estate
driving fee income growth of 6.0% with the cost base to support
those practices remaining largely fixed. Gross margin also includes
the impact of planned fee adjustments, which have supressed Joint
Venture fee income in the year, but which are now fully completed
with no further fee adjustments planned.
Operating profit and operating costs
Underlying Group EBIT was GBP105.9m(#) (FY20: GBP113.3m), with
an operating margin of 9.3%(#) (FY20: 10.5%). Group underlying
operating costs of GBP342.1m (FY20: GBP297.2m) grew at 15.1% or
10.6% on a pre-Covid basis. Before investment in fulfilment,
customer acquisition, and our support office capabilities
underlying cost growth was 1.3%.
Retail EBIT was GBP79.5m(#) (FY20: GBP89.3m) with an operating
margin of 7.8%(#) (FY20: 9.5%). Whilst we saw sustained strong
trading in our second half across both stores and online this has
been offset by the revenue and cost implications of Covid-19.
Operating cost growth, excluding depreciation and amortisation, was
16.2% to GBP316.8m (FY20: GBP272.5m). We have continued to pay all
our rents throughout the year, and our program of rent negotiations
continues.
Underlying Vet Group EBIT was GBP36.0m(#) (FY20: GBP30.6m) with
an operating margin of 29.2%(#) (FY20: 25.2%). Operating costs in
the Vet Group, excluding depreciation and amortisation, were
GBP15.1m (FY20: GBP16.1m), a decrease of 5.8% on the prior year.
The year-on-year change in operating costs reflects achieved cost
efficiencies across several areas, as well as the disposal of the
Specialist Group part way through the year.
Within Vet Group non-underlying items, we recognised GBP30.2m in
relation to the profit on disposal of the Specialist Group (FY20:
GBPnil) on 31 December 2020, as well as non-underlying operating
costs of GBP1.9m in relation to the accounting treatment of the
ownership structure of the Specialist Group (FY20: GBP1.0m),
consistent with our accounting practices since acquisition.
Central costs, including Group overheads and colleagues,
increased to GBP9.6m (FY20: GBP8.6m), partly driven by investment
in our Group capability and the small amount of costs associated
with The Vet Connection, acquired on 30 November 2020.
Finance expense
The net finance expense for the period increased to GBP18.4m
(FY20: GBP17.8m) with the increase driven by fees relating to the
GBP100m credit facility arranged in May 2020 as part of our
Covid-19 response. This facility remained unutilised for the entire
term and, post year end, has been allowed to expire without seeking
renewal.
Profit before tax
Underlying pre-tax profit was GBP87.5m(#) (FY20: GBP93.5m) and
statutory pre-tax profit, including all non-underlying items was
GBP116.4m (FY20: GBP85.9m). Underlying pre-tax profit declined 6.4%
in the period.
Taxation, net income & EPS
Underlying total tax expense for the period was GBP17.3m(#) , a
rate of 19.8% on underlying pre-tax profit.
Underlying net income for the year, after tax, decreased by 6.3%
to GBP70.2m(#) (FY20: GBP74.9m), whilst statutory net income for
the year, after tax, increased by 47.1% to GBP99.0m (FY20:
GBP67.4m), driven by the GBP30.2m profit on disposal of the
Specialist Group. Underlying basic earnings per share were 14.0
pence(#) (FY20: 15.0 pence) and statutory basic earnings per share
were 19.8 pence (FY20: 13.5 pence).
Cash working capital
The cash movement in trading working capital for FY21 was an
outflow of GBP16.5m(#) . This was predominantly driven by a
GBP22.1m increase in inventory, reflecting the rebuild of stock
levels throughout the period following the customer stockpiling
seen towards the end of FY20.
The strong financial performance across our Joint Venture First
Opinion vet practices, as well as the 6-month loan holiday we
agreed with third party banks as part of the Covid-19 response, led
to the gross value of operating loans reducing by GBP10.8m to
GBP26.7m (FY20: GBP37.5m). This decreased the overall Group cash
working capital outflow to GBP5.7m (FY20: GBP28.2m inflow), and
supported the solid cash generation of the Vet Group.
The provision held against the gross value of operating loans
was GBP6.2m (FY20: GBP8.0m) representing 23% of the gross value of
the loans.
Capital investment
Capital investment was GBP44.4m (FY20: GBP38.3m) and was focused
on three strategic growth areas; a GBP5.6m (FY20: GBP3.5m)
investment to increase capacity within our distribution network,
GBP4.8m (FY20: GBP11.1m) to rollout our next generation store
format, and investment in data analytics and business systems
totalling GBP22.9m (FY20: GBP14.9m), as we continue to progress our
data and digital agenda. The balance of capital spend supported the
ongoing maintenance of our asset base. Cash capital expenditure was
GBP34.9m (FY20: GBP39.6m).
Group underlying free cashflow
Group underlying free cashflow after interest and tax, but
before acquisitions and disposals decreased to GBP67.4m(#) (FY20:
GBP89.6m), representing a cash conversion rate of 30.4% (FY20:
39.8%). The decrease in free cashflow compared with the prior year
is largely driven by the working capital movements described above
offset by a year-on-year benefit relating to a change in timing of
Corporation Tax payments in the prior year.
Group underlying free cashflow(#) (GBPm) FY21 FY20
--------------------------------------------- ------- -------
Operating cashflow(#) 133.2 165.8
--------------------------------------------- ------- -------
Tax and Interest (21.9) (34.0)
--------------------------------------------- ------- -------
Debt issue costs (0.2) -
--------------------------------------------- ------- -------
Net Capex (35.0) (39.4)
--------------------------------------------- ------- -------
Purchase of own shares to satisfy colleague
options (8.7) (2.8)
--------------------------------------------- ------- -------
Group underlying free cashflow(#) 67.4 89.6
--------------------------------------------- ------- -------
Underlying FCF
FY21 Group underlying free cashflow(#) (GBPm) FCF conversion(2)
---------------------------------------- --------------- ------------------
Retail 44.6 23.8%
---------------------------------------- --------------- ------------------
Vet Group 38.1 89.8%
---------------------------------------- --------------- ------------------
Central(1) (15.4) NM
---------------------------------------- --------------- ------------------
Group underlying free cashflow(#) 67.4 30.4%
---------------------------------------- --------------- ------------------
1. Includes central costs of GBP9.5m plus interest paid of
GBP5.3m, purchase of own shares of GBP8.7m, GBP0.2m of debt issue
costs, a WCAP inflow of GBP4.3m a tax credit of GBP3.3m and a
credit relating to IFRS2 of GBP0.8m.
2. Calculated as underlying free cashflow as a percentage of underlying EBITDA.
As a result of strong cash generation and GBP80m of initial
proceeds from the disposal of the Specialist Group, the Group's net
cash position at the end of the period was GBP1.4m, and net debt
was GBP408.3m on a post-IFRS16 basis. This represents a leverage
ratio of 0.0x underlying EBITDA(#) on a pre-IFRS16 basis or 1.9x on
a post-IFRS16 basis.
Group net cash/(debt) (GBPm) FY21 FY20
--------------------------------------------------- ------- --------
Opening net cash/(debt) (pre-IFRS16) (85.9) (120.5)
--------------------------------------------------- ------- --------
Underlying free cashflow (#) 67.4 89.6
--------------------------------------------------- ------- --------
Ordinary dividends paid (37.1) (37.1)
--------------------------------------------------- ------- --------
Acquisitions(3) (16.8) (1.5)
--------------------------------------------------- ------- --------
Disposals(4) 79.4 -
--------------------------------------------------- ------- --------
Non-underlying cash outflow(5) (5.5) (16.4)
--------------------------------------------------- ------- --------
Closing net cash/(debt) 1.4 (85.9)
--------------------------------------------------- ------- --------
Pre-IFRS16 leverage (Net cash/(debt) / underlying
EBITDA(#) ) 0.0x 0.6x
--------------------------------------------------- ------- --------
Post-IFRS16 leverage (Net cash/(debt) /
underlying EBITDA(#) ) (6) 1.9x 2.5x
=================================================== ======= ========
3. In FY21 includes acquisition of The Vet Connection and
investment in certain company managed practices. In FY20, includes
an investment in Tailster and in certain company managed
practices.
4. In FY21 includes the GBP80m cash proceeds in relation to the
disposal of the Specialist Group in the year net of fees and cash
held upon disposal (FY20: GBPnil).
5. FY21 includes GBPnil (FY20: GBP10.0m) relating to practices
bought out during the year, plus GBP5.5m (FY20: GBP6.4m) in
relation to payments made to certain Shared Venture Partners in our
Specialist Group to acquire remaining minority stakes.
6. Underlying EBITDA for FY21 is GBP216.7m.
The Group's cash return on invested capital in the period
declined to 22.5% (FY20: 23.3%).
Capital allocation
Following the successful reset of our Retail business and
restructuring of the Vet Group over the past few years, we have
taken the opportunity to formally revisit our capital allocation
policy. Our refreshed policy prioritises investing our cash
generation in areas that will expand the Group and deliver
attractive returns. This includes organic investment into our
digital capability and our infrastructure, including our store
regeneration program. Our next priority is to provide a progressive
ordinary dividend to shareholders which approximates to 50% of
earnings per share. We will consider value-accretive opportunities,
including M&A, which are strategically aligned to expanding our
ecosystem in core and adjacent markets and where we consider the
potential opportunity to drive incremental value as attractive.
Finally, post all other identified and anticipated uses for
capital, including the ordinary dividend, we would expect to return
surplus free cashflow to shareholders through a special dividend or
share buyback.
Dividend
The Board has recommended a final dividend of 5.5 pence per
share, an increase of 10% on the prior year. This takes the total
dividend for the year to 8.0 pence per share (FY20: 7.5p per
share), reflecting our strong cash performance and balance sheet.
The final dividend will be payable on 13 July 2021 to shareholders
on the register at the close of trading on 18 June 2021.
Application of IFRS16
The financial statements for FY21, and the prior period
comparatives, have been prepared under the requirements of IFRS16.
Implementation of IFRS16 has had no effect on how the business is
run, nor on cash flows generated. It has, however, had an impact on
the assets, liabilities and income statement of the Group, as well
as the classification of cash flows relating to lease
contracts.
In order to clearly show the impact of IFRS16, we show a
reconciliation for Group underlying profit before tax and cashflow
as follows.
Exclude Include
GBPm Pre IFRS16 rent Include depreciation interest Post IFRS16
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Revenue 1,142.8 - - - 1,142.8
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Operating lease rentals (78.1) 78.1 - - -
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Depreciation & amortisation (40.5) - (70.3) - (110.8)
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Underlying operating
profit(#) 98.1 78.1 (70.3) - 105.9
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Finance income 0.3 - - - 0.3
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Finance expense (5.9) - - (12.8) (18.7)
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Underlying PBT(#) 92.5 78.1 (70.3) (12.8) 87.5
----------------------------- ----------- ----------- --------------------- ----------------- -------------
Pre Add Capital Lease Costs to
IFRS16 back lease interest acquire
GBPm rent payments payments ROU assets Post IFRS16
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Operating cashflow(#) 133.2 79.6 (66.4) (12.8) (0.4) 133.2
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Tax (17.5) - - - - (17.5)
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Interest (4.4) - - - - (4.4)
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Debt issue costs (0.2) - - - - (0.2)
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Net Capex (35.0) - - - - (35.0)
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Purchase of own shares (8.7) - - - - (8.7)
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Group underlying free
cashflow(#) 67.4 79.6 (66.4) (12.8) (0.4) 67.4
------------------------ -------- ------ ----------------- ----------------- ----------------- ------------
Impact of the UK's exit from the European Union
Following the United Kingdom's exit from the European Union (EU)
and the end of the transition period on 31 December 2020, we
continue to take actions across the Group to mitigate any related
impact on tariffs, logistics, vet availability and currency.
We are also evaluating the potential regulatory implications for
our operations in Northern Ireland, specifically concerning Export
Health Certificates. We continue to work with the relevant
professional bodies to assess the protocols involved in bringing
products into Northern Ireland, and our plans for the coming year
include an increase in associated logistics costs.
Mike Iddon
Chief Financial Officer
27 May 2021
Financial statements
Independent Auditor's Report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity as at 25 March
2021
Consolidated statement of changes in equity as at 26 March
2020
Consolidated statement of cash flows
Company balance sheet
Company statement of changes in equity as at 25 March 2021
Company statement of changes in equity as at 26 March 2020
Company income statement
Company statement of cash flows
Notes (forming part of the financial statements)
Glossary - Alternative Performance Measures
Advisors and contacts
Financial Statements
The financial information set out below does not constitute the
company's statutory accounts for the periods ended 25 March 2021 or
26 March 2020 but is derived from those accounts. Statutory
accounts for 2020 have been delivered to the registrar of
companies, and those for 2021 will be delivered in due course. The
auditor has reported on those accounts; their reports were (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006
Consolidated income statement
52 week period ended 52 week period ended
25 March 2021 26 March 2020
-------------------------- ------- ----------------------------------- -----------------------------------
Underlying Non-underlying Underlying Non-underlying
trading items (note Total trading items (note Total
Note GBPm 3) GBPm GBPm GBPm 3) GBPm GBPm
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Revenue 2 1,142.8 - 1,142.8 1,058.8 - 1,058.8
Cost of sales (583.2) 0.6 (582.6) (540.0) (6.9) (546.9)
Impairment gains/(losses)
on receivables 3,16,17 (0.8) - (0.8) (0.9) 0.3 (0.6)
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Gross profit 558.8 0.6 559.4 517.9 (6.6) 511.3
Selling and distribution
expenses (321.0) - (321.0) (313.8) - (313.8)
Administrative expenses 3 (131.9) (1.9) (133.8) (92.8) (1.0) (93.8)
Profit on disposal
of subsidiary 3 - 30.2 30.2 - - -
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Operating profit 2,3 105.9 28.9 134.8 111.3 (7.6) 103.7
Financial income 6 0.3 - 0.3 0.5 - 0.5
Financial expense 7 (18.7) - (18.7) (18.3) - (18.3)
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Net financing expense (18.4) - (18.4) (17.8) - (17.8)
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Profit before tax 87.5 28.9 116.4 93.5 (7.6) 85.9
Taxation 8 (17.3) (0.1) (17.4) (18.6) 0.1 (18.5)
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Profit for the period 70.2 28.8 99.0 74.9 (7.5) 67.4
-------------------------- ------- ---------- -------------- ------- ---------- -------------- -------
Basic and diluted earnings per share attributable to equity
shareholders of the Company:
52 week 52 week
period period
ended 25 ended 26
Note March 2021 March 2020
-------------------------------------- ---- ----------- -----------
Equity holders of the parent - basic 5 19.8p 13.5p
Equity holders of the parent- diluted 5 19.4p 13.2p
-------------------------------------- ---- ----------- -----------
Dividends paid and proposed are disclosed in note 9.
The notes on pages 27 to 84 form an integral part of these
financial statements.
Consolidated statement of comprehensive income
52 week 52 week
period period
ended 25 ended 26
March 2021 March 2020
Note GBPm GBPm
-------------------------------------------------- ----- ----------- -----------
Profit for the period 99.0 67.4
Other comprehensive income
Items that are or may be recycled subsequently
into profit or loss:
Foreign exchange translation differences 22 0.1 (0.1)
Effective portion of changes in fair value of
cash flow hedges 22 5.0 (5.5)
Other comprehensive income for the period, before
income tax 5.1 (5.6)
Income tax on other comprehensive income 15,22 (0.3) 0.9
-------------------------------------------------- ----- ----------- -----------
Other comprehensive income for the period, net
of income tax 4.8 (4.7)
-------------------------------------------------- ----- ----------- -----------
Total comprehensive income for the period 103.8 62.7
-------------------------------------------------- ----- ----------- -----------
The notes on pages 27 to 84 form an integral part of these
financial statements.
Consolidated balance sheet
At 25 March At 26 March
Note 2021 GBPm 2020 GBPm
--------------------------------------------- ---- ----------- -----------
Non-current assets
Property, plant and equipment 11 99.6 117.1
Right-of-use assets 12 368.7 425.2
Intangible assets 13 1,000.2 1,006.4
Other non-current assets 16 16.7 20.9
--------------------------------------------- ---- ----------- -----------
1,485.2 1,569.6
--------------------------------------------- ---- ----------- -----------
Current assets
Inventories 14 83.7 62.8
Deferred tax asset 15 2.9 -
Other financial assets 16 1.5 1.5
Trade and other receivables 17 49.3 55.9
Cash and cash equivalents 18 101.4 79.1
--------------------------------------------- ---- ----------- -----------
238.8 199.3
--------------------------------------------- ---- ----------- -----------
Total assets 1,724.0 1,768.9
--------------------------------------------- ---- ----------- -----------
Current liabilities
Trade and other payables 20 (211.1) (196.6)
Lease liabilities 12 (78.4) (83.7)
Corporation tax (1.5) (0.5)
Provisions 21 (4.3) (3.9)
Other financial liabilities 16 (1.3) (2.2)
--------------------------------------------- ---- ----------- -----------
(296.6) (286.9)
--------------------------------------------- ---- ----------- -----------
Non-current liabilities
Other interest-bearing loans and borrowings 19 (98.7) (163.3)
Lease liabilities 12 (331.3) (380.2)
Provisions 21 (2.1) (1.3)
Other financial liabilities 16 (1.6) (5.8)
Deferred tax liabilities 15 - (0.4)
--------------------------------------------- ---- ----------- -----------
(433.7) (551.0)
--------------------------------------------- ---- ----------- -----------
Total liabilities (730.3) (837.9)
--------------------------------------------- ---- ----------- -----------
Net assets 993.7 931.0
--------------------------------------------- ---- ----------- -----------
Equity attributable to equity holders of the
parent
Ordinary share capital 22 5.0 5.0
Consolidation reserve (372.0) (372.0)
Merger reserve 113.3 113.3
Translation reserve (0.0) (0.1)
Cash flow hedging reserve (1.5) (2.8)
Retained earnings 1,248.9 1,187.6
--------------------------------------------- ---- ----------- -----------
Total equity 993.7 931.0
--------------------------------------------- ---- ----------- -----------
On behalf of the Board:
Mike Iddon
Group Chief Financial Officer
27 May 2021
Company number: 08885072
The notes on pages 27 to 84 form an integral part of these
financial statements.
Consolidated statement of changes in equity as at 25 March
2021
Cash flow
Share Consolidation Merger hedging Translation Retained Total
capital reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Balance at 26 March 2020 5.0 (372.0) 113.3 (2.8) (0.1) 1,187.6 931.0
Total comprehensive income
for the period
Profit for the period - - - - - 99.0 99.0
Other comprehensive income
(note 22) - - - 4.7 0.1 - 4.8
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Total comprehensive income
for the period - - - 4.7 0.1 99.0 103.8
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Hedging gains & losses reclassified
to inventory - - - (3.4) - - (3.4)
Total hedging gains & losses
reclassified to inventory - - - (3.4) - - (3.4)
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Transactions with owners,
recorded directly in equity
Equity dividends paid - - - - - (37.1) (37.1)
Share based payment charge - - - - - 4.7 4.7
Deferred tax movement on
IFRS 2 reserve - - - - - 3.4 3.4
Purchase of own shares - - - - - (8.7) (8.7)
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Total contributions by and
distributions to owners - - - - - (37.7) (37.7)
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Balance at 25 March 2021 5.0 (372.0) 113.3 (1.5) (0.0) 1,248.9 993.7
------------------------------------ -------- ------------- -------- --------- ----------- --------- -------
Consolidated statement of changes in equity as at 26 March
2020
Cash flow
Share Consolidation Merger hedging Translation Retained Total
capital reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Balance at 28 March 2019 5.0 (372.0) 113.3 0.8 (0.0) 1,155.9 903.0
Total comprehensive income
for the period
Profit for the period - - - - - 67.4 67.4
Other comprehensive income
(note 22) - - - (4.6) (0.1) - (4.7)
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Total comprehensive income
for the period - - - (4.6) (0.1) 67.4 62.7
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Hedging gains & losses reclassified
to inventory - - - 1.0 - - 1.0
Total hedging gains & losses
reclassified to inventory - - - 1.0 - - 1.0
----------------------------------- -------- ------------- -------- --------- ----------- --------- ---------
Transactions with owners,
recorded directly in equity
Equity dividends paid - - - - - (37.1) (37.1)
Share based payment charge - - - - - 4.2 4.2
Purchase of own shares - - - - - (2.8) (2.8)
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Total contributions by and
distributions to owners - - - - - (35.7) (35.7)
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Balance at 26 March 2020 5.0 (372.0) 113.3 (2.8) (0.1) 1,187.6 931.0
----------------------------------- -------- ------------- -------- --------- ----------- --------- -------
Consolidated statement of cash flows
52 week 52 week
period period
ended ended
25 March 26 March
2021 2020
GBPm GBPm
------------------------------------------------------------------- --------- ---------
Cash flows from operating activities
Profit for the period 99.0 67.4
Adjustments for:
Depreciation and amortisation 110.8 109.4
Non-underlying impairment - 3.4
Profit on disposal (30.2) -
Financial income (0.3) (0.5)
Financial expense 18.7 18.3
Settlement of 'put & call' liabilities (growth element) - (0.8)
Share based payment charges 4.7 4.2
Taxation 17.4 18.5
------------------------------------------------------------------- --------- ---------
220.1 219.9
Decrease in trade and other receivables 3.1 5.4
(Increase)/decrease in inventories (22.1) 5.7
Increase in trade and other payables 10.2 16.9
Increase/(decrease) in provisions 1.3 (0.7)
Increase/(decrease) in working capital relating to non-underlying
items - (1.2)
------------------------------------------------------------------- --------- ---------
212.6 246.0
Tax paid (17.5) (30.8)
------------------------------------------------------------------- --------- ---------
Net cash flow from operating activities 195.1 215.2
------------------------------------------------------------------- --------- ---------
Cash flows from investing activities
Proceeds from the sale of property, plant and equipment 0.3 0.4
Interest received 0.4 0.5
Investment in other financial assets - (1.0)
Costs to acquire right-of-use assets (0.4) -
Acquisition of subsidiaries, net of cash acquired (underlying) (16.9) (0.5)
Acquisition of subsidiaries, net of cash acquired (non-underlying) - (0.5)
Other costs associated with acquisition of subsidiaries
(non-underlying) - (3.7)
Disposal of subsidiaries, net of cash disposed (non-underlying) 79.4 -
Repayment of borrowings owed by JV practices in advance
of acquisition of subsidiaries (non-underlying) - (5.9)
Acquisition of property, plant and equipment and other
intangible assets (34.9) (39.6)
Net cash used in investing activities 27.9 (50.3)
------------------------------------------------------------------- --------- ---------
Cash flows from financing activities
Equity dividends paid (37.1) (37.1)
Proceeds from new loan 60.0 61.0
Repayment of borrowings (125.0) (77.0)
Debt issue costs (0.2) -
Capital lease payments (66.6) (67.0)
Settlement of 'put and call' liabilities (minimum amount) (5.5) (5.6)
Purchase of own shares (8.7) (2.8)
Finance lease obligations (0.0) (0.1)
Interest paid (4.8) (3.7)
Interest paid on lease obligations (12.8) (14.0)
------------------------------------------------------------------- --------- ---------
Net cash used in financing activities (200.7) (146.3)
------------------------------------------------------------------- --------- ---------
Net increase in cash and cash equivalents 22.3 18.6
Cash and cash equivalents at beginning of period 79.1 60.5
------------------------------------------------------------------- --------- ---------
Cash and cash equivalents at end of period 101.4 79.1
------------------------------------------------------------------- --------- ---------
The notes on pages 27 to 84 form an integral part of these
financial statements.
Company balance sheet
At 25 March At 26 March
Note 2021 GBPm 2020 GBPm
------------------------------------------------- ---- ----------- -----------
Non-current assets
Investments in subsidiaries 28 936.2 936.2
936.2 936.2
------------------------------------------------- ---- ----------- -----------
Current assets
Other financial assets 16 0.2 0.3
Trade and other receivables (due in greater than
1 year) 17 587.9 579.2
Cash and cash equivalents 18 - -
Deferred tax assets 15 3.7 0.4
------------------------------------------------- ---- ----------- -----------
591.8 579.9
------------------------------------------------- ---- ----------- -----------
Total assets 1,528.0 1,516.1
------------------------------------------------- ---- ----------- -----------
Current liabilities
Trade and other payables 20 (509.7) (387.8)
Other financial liabilities 16 (0.1) (0.0)
------------------------------------------------- ---- ----------- -----------
(509.8) (387.8)
------------------------------------------------- ---- ----------- -----------
Non-current liabilities
Other interest-bearing loans and borrowings 19 (98.7) (163.3)
Other financial liabilities 16 (1.6) (2.3)
(100.3) (165.6)
------------------------------------------------- ---- ----------- -----------
Total liabilities (610.1) (553.4)
------------------------------------------------- ---- ----------- -----------
Net assets 917.9 962.7
------------------------------------------------- ---- ----------- -----------
Equity attributable to equity holders of the
parent
Ordinary share capital 22 5.0 5.0
Merger reserve 113.3 113.3
Cash flow hedging reserve (1.2) (1.6)
Retained earnings 800.8 846.0
------------------------------------------------- ---- ----------- -----------
Total equity 917.9 962.7
------------------------------------------------- ---- ----------- -----------
On behalf of the Board:
Mike Iddon
Group Chief Financial Officer
27 May 2021
Company number: 08885072
The notes on pages 27 to 84 form an integral part of these
financial statements.
Company statement of changes in equity as at 25 March 2021
Cash flow
Merger hedging Retained
Share capital reserve reserve earnings Total equity
GBPm GBPm GBPm GBPm GBPm
----------------------------------------- ------------- -------- --------- --------- ------------
Balance at 26 March 2020 5.0 113.3 (1.6) 846.0 962.7
Total comprehensive income for
the period
Loss for the period - - - (7.5) (7.5)
Other comprehensive income - - 0.4 - 0.4
----------------------------------------- ------------- -------- --------- --------- ------------
Total comprehensive income for
the period - - 0.4 (7.5) (7.1)
----------------------------------------- ------------- -------- --------- --------- ------------
Transactions with owners, recorded
directly in equity
Equity dividends paid - - - (37.1) (37.1)
Share based payment charge - - - 4.7 4.7
Deferred tax movement on IFRS
2 reserve - - - 3.4 3.4
Purchase of own shares - - - (8.7) (8.7)
----------------------------------------- ------------- -------- --------- --------- ------------
Total contributions by and distributions
to owners - - - (37.7) (37.7)
Balance at 25 March 2021 5.0 113.3 (1.2) 800.8 917.9
----------------------------------------- ------------- -------- --------- --------- ------------
Company statement of changes in equity as at 26 March 2020
Cash flow
Merger hedging Retained
Share capital reserve reserve earnings Total equity
GBPm GBPm GBPm GBPm GBPm
----------------------------------------- ------------- -------- --------- --------- ------------
Balance at 28 March 2019 5.0 113.3 (0.1) 887.3 1,005.5
Total comprehensive income for
the period
Loss for the period - - - (5.6) (5.6)
Other comprehensive income - - (1.5) - (1.5)
Total comprehensive income for
the period - - (1.5) (5.6) (7.1)
----------------------------------------- ------------- -------- --------- --------- ------------
Transactions with owners, recorded
directly in equity
Equity dividends paid - - - (37.1) (37.1)
Share based payments charge - - - 4.2 4.2
Purchase of own shares - - - (2.8) (2.8)
Total contributions by and distributions
to owners - - - (35.7) (35.7)
Balance at 26 March 2020 5.0 113.3 (1.6) 846.0 962.7
----------------------------------------- ------------- -------- --------- --------- ------------
Company income statement
As permitted by section 408 of the Companies Act 2006, the
Company's income statement has not been included in these financial
statements. The Company's loss for the 52 week period ended 25
March 2021 was GBP7.5m (loss for the 52 week period ended 26 March
2020 was GBP5.6m).
Company statement of cash flows
52 week 52 week
period ended period
25 March ended 26
2021 March 2020
GBPm GBPm
----------------------------------------------------- ------------- -----------
Cash flows from operating activities
Loss for the period (7.5) (5.6)
Financial expense 5.9 4.2
Share based payment charges 4.7 4.2
Tax (3.1) (2.6)
------------------------------------------------------ ------------- -----------
0.0 0.2
Increase in trade and other receivables (8.7) (1.3)
Increase in trade and other payables 121.5 57.7
Tax paid 3.5 3.0
------------------------------------------------------ ------------- -----------
Net cash flow from operating activities 116.3 59.6
------------------------------------------------------ ------------- -----------
Cash flows from financing activities
Equity dividends paid (37.1) (37.1)
Proceeds from new loan 60.0 61.0
Repayment of borrowings (125.0) (77.0)
Debt issue costs (0.2) -
Interest paid (5.3) (3.7)
Purchase of own shares (8.7) (2.8)
------------------------------------------------------ ------------- -----------
Net cash used in financing activities (116.3) (59.6)
------------------------------------------------------ ------------- -----------
Net (decrease)/increase in cash and cash equivalents - -
Cash and cash equivalents at beginning of period - -
------------------------------------------------------ ------------- -----------
Cash and cash equivalents at end of period - -
------------------------------------------------------ ------------- -----------
Notes (forming part of the financial statements)
Pets at Home Group Plc (the Company) is a company incorporated
in the United Kingdom and its registered office is Epsom Avenue,
Stanley Green, Handforth, Cheshire, SK9 3RN.
1 Significant accounting policies
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
consolidated financial statements.
1.1 Basis of preparation
The consolidated financial statements were prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. The Company's
financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union and as applied in accordance with the provisions
of the Companies Act 2006. The Company has taken advantage of the
exemption provided under section 408 of the Companies Act 2006 not
to publish its individual income statement and related notes.
The financial statements are prepared under the historical cost
convention, as modified by the revaluation of derivative financial
instruments to fair value, and in accordance with those parts of
the Companies Act 2006 applicable to companies reporting under IFRS
as adopted by the European Union. New standards and interpretations
issued by the International Accounting Standards Board (IASB) and
the International Financial Reporting Interpretations Committee
(IFRIC) becoming effective during the 52 week period ended 25 March
2021 have not had a material impact on the Group's financial
statements.
1.2 Measurement convention
The consolidated financial statements are prepared on the
historical cost basis except that the following assets and
liabilities are stated at their fair value: derivative financial
instruments, financial instruments classified as fair value through
the profit or loss. Non-current assets held for sale are stated at
the lower of previous carrying amount and fair value less costs to
sell.
1.3 Going concern
The Company's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Strategic Report, including a detailed COVID-19
assessment within the Chief Executive's statement. The financial
position of the Company, its cash flows, liquidity position and
borrowing facilities are described in the Chief Financial Officer's
review. In addition, note 23 to the financial statements includes
the Company's objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposures to
credit risk and liquidity risk.
The Directors of the Group have prepared cash flow forecasts for
a period of at least 12 months from the date of the approval of
these financial statements which indicate that, taking account of
reasonably possible downsides, the Group will have sufficient
funds, through its revolving credit facility, to meet its
liabilities as they fall due for that period.
In preparing the forecasts for the Group, the Directors have
carefully considered the impact of COVID-19 on the Group's
financial position, liquidity and future performance. The Group is
deemed an 'essential retailer' by the Government and as such stores
and veterinary practices have continued to trade throughout and
higher levels of online orders have continued to be fulfilled from
Distribution Centres.
The Group has access to a revolving credit facility of GBP248m,
which expires in September 2023, with GBP100.0m drawn down at 25
March 2021 and cash balances of GBP101.4m. The lowest level of
headroom forecast over the next 12 months from the date of signing
of the financial statements is in excess of GBP254.7m in the base
case scenario. On a sensitised basis, the headroom forecast over
the next 12 months from the date of approving of the financial
statements is GBP215.0m. The Group has been in compliance with all
covenants applicable to this facility within the financial year,
and is forecast to continue to be in compliance for 12 months from
the date of signing of the financial statements. A number of severe
but plausible downside scenarios were calculated compared to the
base case forecast of profit and cash flow to assess headroom
against facilities for the next 12 months. These scenarios
included:
- Scenario 1: Reduction on Group like-for-like assumption of 1%
in each year throughout the forecast period, with ordinary
dividends continuing
- Scenario 2: Using scenario 1 outcomes and further impacted by
a conflated risk impact of GBP22.5m on sales and GBP11.25m on PBT,
with dividends held at 7.5p per share
- Scenario 3: Group like-for-like sales declines to 0% over the
next year and a conflated risk impact of GBP74.5m on sales and
GBP37.25m on PBT is used, with dividends cut to nil to conserve
cash
Against these negative scenarios, adjusted projections showed no
breach of covenants with the lowest level of headroom in the
strategic planning horizon being GBP183.6m. Further mitigating
actions could also be taken in such scenarios should it be
required, including reducing capital expenditure.
The Directors of Pets at Home Group Plc, having made appropriate
enquiries, consider that adequate resources exist for the Group to
continue in operational existence for a period of at least 12
months from the date of approval of these financial statements and
that, therefore, it is appropriate to adopt the going concern basis
in preparing the consolidated financial statements as at and for
the period ended 25 March 2021.
1.4 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable. The acquisition date
is the date on which control is transferred to the acquirer. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Losses applicable to
the non-controlling interests in a subsidiary are allocated to the
non-controlling interests even if doing so causes the
non-controlling interests to have a deficit balance.
The Group and Company operate an Employee Benefit Trust (EBT)
for the purposes of acquiring shares to fund share awards made to
employees. The EBT is deemed to be a subsidiary of the Group and
Company as Pets at Home Group Plc is considered to be the ultimate
controlling party for accounting purposes. The assets and
liabilities of this trust have been included in the consolidated
financial information. The cost of purchasing own shares held by
the EBT is accounted for in retained earnings.
Investment in Joint Venture veterinary practices
The Group has a number of non-participatory shareholdings in
veterinary practice companies, which are accounted for as Joint
Venture arrangements. The veterinary practices were established
under terms that require mutual agreement between the Group and the
Joint Venture Partner, and do not give the Group power over
decision making to affect its exposure to, or the extent of, the
returns from its involvement with the practices and therefore are
not consolidated in these financial statements. Further, the Group
is not entitled to profits, losses, or any surplus on winding up or
disposal of the Joint Venture veterinary practices, and as such no
participatory interest is recognised. The Group's category of
shareholding in the Joint Venture veterinary practices entitles the
Group to charge management fees for support services provided. For
further details see notes 16, 17 and 27. The Group's shares are
non-participatory, and therefore the Group does not share in any
profits, losses or other distribution of value from the Joint
Venture company; the investments are held at cost less impairment,
which is deemed to be their carrying value as explained further in
note 16.
1.5 Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement, except for differences arising on the retranslation of a
financial liability designated as a hedge of the net investment in
a foreign operation that is effective, or qualifying cash flow
hedges, which are recognised directly in other comprehensive
income. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are
stated at fair value are retranslated to the functional currency at
foreign exchange rates ruling at the dates the fair value was
determined.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation, are
translated to the Group's presentational currency, sterling, at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for the period where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve or non-controlling
interest, as the case may be.
Functional currency
The consolidated financial statements are presented in sterling
which is the Group and Company's functional currency and have been
rounded to the nearest million.
1.6 Classification of financial instruments issued by the Group
Following the adoption of IAS 32, financial instruments issued
by the Group are treated as equity only to the extent that they
meet the following two conditions:
(a) they include no contractual obligations upon the Company (or
Group as the case may be) to deliver cash or other financial assets
or to exchange financial assets or financial liabilities with
another party under conditions that are potentially unfavourable to
the Company (or Group); and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability.
1.7 Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
equity and debt securities, trade and other receivables, cash and
cash equivalents, loans and borrowings, and trade and other
payables.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost using the effective interest method, less any
expected credit loss.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value, net of attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost using the effective interest method.
Contingent consideration
Contingent consideration on acquisition or disposal of a
subsidiary is valued at fair value at the time of acquisition or
disposal. Any subsequent change in fair value is recognised in
profit or loss (see 1.12).
1.8 Derivative financial instruments and hedging
Derivative financial instruments
Derivative financial instruments are recognised at fair value.
The gain or loss on re-measurement to fair value is recognised
immediately in profit or loss. However, where derivatives qualify
for hedge accounting, recognition of any resultant gain or loss
depends on the nature of the item being hedged (see below).
Cash flow hedges
Where a derivative financial instrument is designated as a hedge
of the variability in cash flows of a recognised asset or
liability, or a highly probable forecast transaction, the effective
part of any gain or loss on the derivative financial instrument is
recognised directly in the hedging reserve. Any ineffective portion
of the hedge is recognised immediately in the income statement.
If a hedge of a forecast transaction subsequently results in the
recognition of a financial asset or a financial liability, the
associated gains and losses that were recognised directly in equity
are reclassified into profit or loss in the same period or periods
during which the asset acquired or liability assumed affects profit
or loss, i.e. when interest income or expense is recognised.
When the hedged forecast transaction subsequently results in the
recognition of a non-financial item such as inventory, the amount
accumulated in the hedging reserve and the cost of hedging is
included directly in the initial cost of the non-financial item
when it is recognised. For all other hedging forecast transactions,
the amount accumulated in the hedging reserve and the cost of
hedging is reclassified to profit or loss in the same period or
periods during which the hedged expected future cash flows affect
the profit or loss.
For cash flow hedges, other than those covered by the preceding
two policy statements, the associated cumulative gain or loss is
removed from equity and recognised in the income statement in the
same period or periods during which the hedged forecast transaction
affects profit or loss.
When a hedging instrument expires or is sold, terminated or
exercised, or the entity revokes designation of the hedge
relationship but the hedged forecast transaction is still expected
to occur, the cumulative gain or loss at that point remains in
equity and is recognised in accordance with the above policy when
the transaction occurs. If the hedged transaction is no longer
expected to take place, the cumulative unrealised gain or loss
recognised in equity is recognised in the income statement
immediately.
1.9 Intra-group financial instruments
Financial guarantee contracts to guarantee the indebtedness of
companies within the Group are considered to be insurance
arrangements and accounted for as such. In this respect, the Group
treats the guarantee contract as a contingent liability until such
time as it becomes probable that a payment will be required under
the guarantee.
1.10 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses. Where parts of an
item of property, plant and equipment have different useful lives,
they are accounted for as separate items of property, plant and
equipment.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The estimated useful lives are as follows:
Freehold property - 50 years
Fixtures, fittings, tools - 3-10 years
and equipment
Leasehold improvements - the term of the lease
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
1.11 Intangible assets
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and
recognised separately from goodwill are initially recognised at
their fair value at the acquisition date (which is regarded as
their cost).
Subsequent to initial recognition, intangible assets acquired in
a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis
as intangible assets that are acquired separately.
Customer lists are valued based on the forecast net present
value of the future economic relationship with those customers,
adjusted for forecast retention rates. Technology based 'know how'
assets are valued based on the expected cost to reproduce or
replace the asset, adjusted for the physical deterioration and
functional or economic obsolescence, if present and measurable.
Software is stated at cost less accumulated amortisation.
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful life of an asset. The
estimated useful lives are as follows:
Software - 2 to 7 years
Customer lists - 10 years
Technology based know how - 10 years
Amortisation methods, useful lives and residual values are
reviewed at each balance sheet date.
1.12 Business combinations
Business combinations are accounted for by applying the
acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group.
Acquisitions on or after 26 March 2010
For acquisitions on or after 26 March 2010, the Group measures
goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the
acquiree; plus
-- the fair value of the existing equity interest in the
acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not re-measured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss. If contingent consideration is payable and is dependent on
future employment, it is recognised as an expense over the relevant
period as a cost of continuing employment.
Any contingent deferred consideration receivable is recognised
at fair value.
A combined put and call option over non-controlling interests is
recognised at fair value at the acquisition date and included
within the valuation of goodwill. Subsequent changes to fair value
are recognised in profit or loss.
Where a combined written put and call option exists over a
non-controlling interest, and the conditions of the agreement
provide the Group with present access to the benefits of the
ownership of the non-controlling interest, then the acquisition is
deemed to reflect 100% ownership and no non-controlling interest is
recognised. A liability is recorded for the expected future
acquisition of the non-controlling interest, and is recognised as
part of the fair value of the consideration. Where the written put
and call option has an embedded valuation mechanism to reward and
retain key individuals employed by the acquired business, who are
also non-controlling shareholders, then the expected increase in
the financial liability is charged to the income statement as
employment costs evenly over the option period within
non-underlying items. See note 1.21 for further details.
On a transaction-by-transaction basis, the Group elects to
measure non-controlling interests, which have both present
ownership interests and are entitled to a proportionate share of
net assets of the acquiree in the event of liquidation, either at
its fair value or at its proportionate interest in the recognised
amount of the identifiable net assets of the acquiree at the
acquisition date. All other non-controlling interests are measured
at their fair value at the acquisition date.
Acquisitions prior to 26 March 2010 (date of adoption of
IFRS)
IFRS 1 grants certain exemptions from the full requirements of
Adopted IFRS for first time adopters. In respect of acquisitions
prior to 26 March 2010, goodwill is included on the basis of its
deemed cost.
1.13 Acquisitions and disposals of non-controlling interests
Acquisitions and disposals of non-controlling interests that do
not result in a change of control are accounted for as transactions
with owners in their capacity as owners and therefore no goodwill
is recognised as a result of such transactions. The adjustments to
non-controlling interests are based on a proportionate amount of
the net assets of the subsidiary. Any difference between the price
paid or received and the amount by which non-controlling interests
are adjusted is recognised directly in equity and attributed to the
owners of the parent.
1.14 Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is based on the weighted average cost principle and
includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs in bringing them to
their existing location and condition, less rebates and
discounts.
Provision is made against specific inventory lines where market
conditions identify an issue in recovering the full cost of that
SKU (Stock Keeping Unit). The provision focuses on the age of
inventory and the length of time it is expected to take to sell,
and applies a progressive provision against the gross inventory
based on the numbers of days' stock on hand. Where necessary,
further specific provision is made against inventory lines, where
the calculated provision is not deemed sufficient to carry the
inventory at net realisable value.
To the extent that the ageing profile of gross inventory as
calculated by this provision methodology results in a material
provision, it will be disclosed as an estimate that may have an
impact on subsequent periods. To the extent this is material, it
will be disclosed in note 1.21.
1.15 Impairment excluding inventories and deferred tax assets
Financial assets (including receivables)
Measurement of Expected Credit Losses ('ECLs') and definition of
default
ECLs are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
Group in accordance with the contract and the cash flows that the
Group expects to receive). ECLs are discounted at the effective
interest rate of the financial asset.
The definition of default is applicable to intercompany and
related party receivables but not relevant to trade receivables
where the lifetime expected credit loss is considered. The Group
defines default based on both qualitative and quantitative risk
criteria. The Group considers Joint Venture loans and receivables
to be in default when the underlying veterinary practice is
significantly under-performing against its business plan, assessed
based on its performance against a scorecard of qualitative and
quantitative metrics. Each practice is reviewed against this set of
criteria and their appropriate risk weightings on an ongoing basis
by management. Those within the low credit risk category are not
deemed to be in default. Practices categorised within the high and
medium credit risk categories are those considered to be in default
based on their scorecard performance. Loss given default is
determined based on forecast future cash flows. The Group considers
other intercompany and related party assets to be in default when
the entity does not have the forecasted future funds available to
repay the balance, if recalled.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial
assets carried at amortised cost and debt securities at FVOCI are
credit-impaired. A financial asset is 'credit-impaired' when one or
more events that have a detrimental impact on the estimated future
cash flows of the financial asset have occurred.
Write-offs
The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no
realistic prospect of recovery.
Details of these provisions are explained in note 1.21 and in
note 16.
Non-financial assets
The carrying amounts of the Group's non-financial assets, other
than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the asset's
recoverable amount is estimated. For goodwill, and intangible
assets that have indefinite useful lives or that are not yet
available for use, the recoverable amount is estimated each period
at the same time.
The recoverable amount of an asset or cash-generating unit as
defined by IAS 36 is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
post-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. For
the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets
(the 'cash-generating unit'). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to
cash-generating units ('CGUs'). Subject to an operating segment
ceiling test, for the purposes of goodwill impairment testing, CGUs
to which goodwill has been allocated are aggregated so that the
level at which impairment is tested reflects the lowest level at
which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups
of CGUs that are expected to benefit from the synergies of the
combination.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
1.16 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the Company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
income statement in the periods during which services are rendered
by employees.
Short term benefits
Short term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
Share based payments
A number of employees of the Company's subsidiaries (including
Directors) receive an element of remuneration in the form of share
based payments, whereby employees render services in exchange for
shares in Pets at Home Group Plc or rights over shares.
Share based payments are measured at fair value at the date of
grant. The fair value of transactions involving the granting of
shares is determined by the share price at the date of grant. The
fair value of transactions involving the granting of share options
is calculated by an external valuer based on a binomial model. In
valuing share based payments, no account is taken of any
performance conditions, other than conditions linked to the price
of the shares of Pets at Home Group Plc ('market conditions').
The cost of share based payments is recognised, together with a
corresponding increase in equity, on a straight-line basis over the
vesting period based on the Company's estimate of how many of the
awards will eventually vest. No expense is recognised for awards
that do not ultimately vest, except for awards where vesting is
conditional upon a market condition, which are treated as vesting
irrespective of whether or not the market condition is satisfied,
provided that all other performance conditions are satisfied.
Where the terms of a share based payment award are modified, as
a minimum, an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in
the value of the transaction as a result of the modification, as
measured at the date of the modification.
Where a share based payment award is cancelled, it is treated as
if it had vested on the date of cancellation and any expense not
yet recognised for the award is recognised immediately. However, if
a new award is substituted for the cancelled award, and designated
as a replacement award on the date that it is granted, the
cancelled and new awards are treated as if they were a modification
to the original award, as described in the previous paragraph. The
dilutive effect of outstanding options is reflected as additional
share dilution in the computation of diluted earnings per
share.
Employee Benefit Trust
T he assets and liabilities of the Employee Benefit Trust (EBT)
have been included in the Group and Company accounts. The assets of
the EBT are held separately from those of the Company. Neither the
purchase nor sale of own shares leads to a gain or loss being
recognised in the Group consolidated statement of comprehensive
income.
Investments in the Company's own shares held by the EBT are
presented as a deduction from reserves and the number of such
shares is deducted from the number of shares in issue when
calculating the diluted earnings per share. The trustees of the
holdings of Pets at Home Group Plc shares under the Pets at Home
Group Employee Benefit Trust have waived or otherwise foregone any
and all dividends paid.
1.17 Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects risks specific to
the liability.
1.18 Revenue and cost of sales
Revenue represents the total amount receivable for goods and
services, net of discounts, coupons, returns and excluding value
added tax, sold in the ordinary course of business, and arises from
activities in the United Kingdom.
Revenue is recognised when the Group transfers control of goods
or services to a customer at the amount to which the Group expects
to be entitled, and substantially all of the Group's performance
obligations have been fulfilled. Depending on whether certain
criteria are met, revenue is recognised either over time, in a
manner that best reflects the Group's performance, or at a point in
time, when control of the goods or services is transferred to the
customer.
Sale of goods in-store and online
Retail revenue from the sale of goods is recorded net of value
added tax, colleague discounts, coupons, vouchers, returns and the
free element of multi-save transactions. Sale of goods represents
food and accessories sold in-store and online, with revenue
recognised at the point in time the customer obtains control of the
goods and substantially all of the Group's performance obligations
have been fulfilled, which is when the transaction is completed
in-store and at point of delivery to the customer for online
orders. Revenue is adjusted to account for estimates for
anticipated returns and a provision is recognised within trade and
other payables. Estimates for anticipated returns are calculated
using past data for both in-store and online transactions. No
separate asset has been recognised (with no corresponding
adjustment to cost of sales) in relation to the value of products
to be recovered from the customer as the products are not always in
a resaleable condition.
Gift vouchers and cards
Revenue from the sale of gift vouchers and cards is deferred
until the voucher is redeemed, at which point performance
obligations have been fulfilled. In line with IFRS 15 the value of
revenue deferred is based on expected redemption rates. The Group
continues to assess the appropriateness of the expected redemption
rates against actual redemptions.
VIP loyalty scheme
Under the VIP loyalty scheme, points are earned by customers
upon the purchase of goods and services. These points can be
converted by nominated charities into gift cards for redemption
against goods and services in-store and online. The sales value of
the points earned under the VIP scheme are treated as deferred
income; the sales are only recognised once the points have been
redeemed by the charities, at which point performance obligations
have been fulfilled. The points do not expire and have no value to
the customer.
Subscription orders
Revenue for subscription orders is recognised at the point of
delivery of each incremental order to the customer at which point
performance obligations have been fulfilled. Subscription services
primarily relate to the repeat order of flea and worm products sold
online and in-store.
Provision of services
Revenue from the provision of services is recorded net of value
added tax, colleague discounts, coupons and vouchers. Provision of
services represents veterinary group income, grooming revenue and
insurance commissions, with revenue recognised upon provision of
the service to the customer at the point at which the Group has
substantially fulfilled its performance obligations.
i) Veterinary Group income
Veterinary Group income represents revenue from the provision of
veterinary services (from Specialist Referral Centres up until 31
December 2020 and managed First Opinion veterinary practices) and
income from the provision of administrative support services to
Joint Venture veterinary practices. Revenue received for the
provision of veterinary services is recognised at the point of
provision of the service and is recognised net of value added tax,
colleague discounts, coupons and vouchers. Fee income received from
the Joint Venture veterinary practice companies for administrative
support services is recognised in the period the services relate to
and recorded net of value added tax.
Revenue derived from care plans is recognised on an apportioned
basis relative to delivery of the service. Revenue on annual
'Complete Care' plans is deferred and recognised at the point at
which treatment and/or services are provided against the plan at an
amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. Once the
plan has expired, any un-utilised deferred revenue will be
recognised as revenue. Revenue from 'Vac4Life' plans is deferred
when payment is received and then recognised in reducing
proportions over the first three years of the plan when
vaccinations/boosters are provided.
Rental income received from in-store Joint Venture veterinary
practices is disclosed within note 3 and is categorised as a credit
within selling and distribution expenses.
ii) Grooming revenue
Grooming revenue is recognised net of value added tax, colleague
discounts, coupons and vouchers, at the point of provision of the
service to the customer. Deposits received are deferred until the
grooming service has been performed.
iii) Insurance commissions
Insurance commissions are recognised on a pro-rated basis over
the period the insurance policy relates to.
Accrued income
Accrued income relates to income in relation to fees to Joint
Venture veterinary practices, revenues generated through Specialist
Referral Centres up until 31 December 2020, and overrider and
promotional income from suppliers which has not yet been invoiced .
Accrued income has been classified as current as it is expected to
be invoiced and received within 12 months of the period end.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract.
Cost of sales
Cost of sales includes costs of goods sold and other directly
attributable costs, promotional income and rebate income received
from suppliers, including costs to deliver administrative support
services to Joint Venture veterinary practices and costs to deliver
grooming services.
Non-underlying items
Income or costs considered by the Directors to be non-underlying
are disclosed separately to facilitate year-on-year comparison of
the underlying trade of the business. The Directors consider that
changes to the fair value of the put and call liabilities warrant
separate disclosure due to the nature of these arrangements as they
do not relate to the underlying trade of the business.
Alternative Performance Measures
The Directors measure the performance of the Group based on a
range of financial measures, including measures not recognised by
EU-adopted IFRS. These Alternative Performance Measures may not be
directly comparable with other companies' alternative performance
measures and the Directors do not intend these to be a substitute
for, or superior to, IFRS measures. Further information can be
found in the Glossary on page 85.
Supplier income
A number of different types of supplier income are negotiated
with suppliers via the joint business planning process in
connection with the purchase of goods for resale, the largest of
which being overrider income and promotional income, which is
explained below. The supplier income arrangements are typically not
co-terminus with the Group's financial period, instead running
alongside the calendar year. Such income is only recognised when
there is reasonable certainty that the conditions for recognition
have been met by the Group, and the income can be measured reliably
based on the terms of the contract. This income is recognised as a
credit within gross margin to cost of sales and, to the extent that
the rebate relates to unsold stock purchases, as a reduction in the
cost of inventory.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract. The accrued incentives,
rebates and discounts receivable at year end are included within
trade and other receivables.
Given the presence of the joint business plans, on the basis of
the historic recoverability of accrued balances, and as amounts are
typically agreed with suppliers prior to recognition, supplier
income is not considered to be an area of significant estimation
that could impact on the following financial year.
Supplier income comprises:
Overrider income
Overrider income comprises three main elements:
1. Fixed percentage based income: These relate largely to
volumetric rebates based on the joint business plan agreements with
suppliers. The income accrued is based on the Group's latest
forecast volumes and the latest contract agreed with the supplier.
Income is not recognised until the Group has reasonable certainty
that the joint business agreement will be fulfilled, with the
amount of income accrued regularly re-assessed and re-measured
throughout the contractual period, based on actual performance
against the joint business plan.
2. Fixed lump sum income: These are typically guaranteed lump
sum payments made by the supplier and are not based on volume.
Fixed lump sum income is usually predicated on confirmation of a
supplier contract and typically includes performance conditions
upon the Group, such as marketing and promotional campaigns. These
amounts are recognised periodically when contractual milestones
have been met such as the promotion being run or marketing in
store.
3. Growth income: These are tiered volumetric rebates relating
to growth targets agreed with the supplier in the joint business
planning process. These are retrospective rebates based on sales
volumes or purchased volumes. Income is recognised to the extent
that it is reasonably certain that the conditions will be achieved,
with such certainty increasing in the latter part of the calendar
year.
Promotional income
Promotional income relates to supplier funded rebates specific
to promotional activity run in agreement between the Group and its
suppliers. Rebates are agreed at an individual inventory article
level for agreed periods of time and are systemically calculated
based on article sales information. No estimation is applied in
calculating the promotional income receivable.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract. The accrued incentives,
rebates and discounts receivable at year end are included within
trade and other receivables.
1.19 Expenses
Financing income and expenses
Financing expenses comprise interest payable under the effective
interest rate method, incorporating amortisation of loan
arrangement fees, finance charges on shares classified as
liabilities, unwinding of the discount on provisions , interest on
lease liabilities and net foreign exchange losses that are
recognised in the income statement (see foreign currency accounting
policy). Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that takes a
substantial time to be prepared for use are capitalised as part of
the cost of that asset. Financing income comprises interest
receivable on funds invested, dividend income, and net foreign
exchange gains.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Dividend
income is recognised in the income statement on the date the
entity's right to receive payment is established. Foreign currency
gains and losses are reported on a net basis.
1.20 Taxation
Tax on the profit or loss for the period comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the period, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous periods.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
1.21 Accounting estimates and judgements
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions concerning the future that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. These judgements are
based on historical experience and management's best knowledge at
the time and the actual results may ultimately differ from these
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis and revisions to accounting estimates are recognised
in the period in which the estimates are revised and in any future
periods affected.
The estimates and assumptions that have significant risk of
causing a material adjustment to the carrying value of assets and
liabilities are explained below.
Impairment of goodwill and other intangibles (significant
estimate)
Determining whether goodwill and other intangibles are impaired
requires an estimation of the value in use of the cash-generating
units to which goodwill and other intangible assets have been
allocated. The value in use calculation requires estimation of
future cash flows expected to arise from the cash-generating unit
(CGU) and a suitable discount rate in order to calculate present
value. Details of CGUs as well as further information about the
assumptions made are disclosed in note 13.
Operating and other loans (significant estimate)
The Group provides longer term operating loans and other loans
to a number of Joint Venture veterinary practices as detailed in
notes 16, 17 and 27 to support their working capital requirements.
The operating loans advanced to the practices are interest free and
either repayable on demand or repayable within 90 days of demand.
As detailed in these notes, provisions for expected credit losses
are held in respect of operating and other loans to Joint Venture
veterinary practices. In line with IFRS 9, judgement is applied in
determining expected credit losses on these loans, the qualitative
and quantitative risk-related criteria used to assess default and
therefore also the probability of default (as defined in note
1.15), and in estimating an appropriate 'loss given default' to
apply to each loan based on forecast future cash flows. In
assessing the qualitative and quantitative information, the Group
takes into account factors including current performance against
business plan, availability of suitable personnel to operate
effectively, and level of indebtedness. The revenue, profit, and
cash flow expectations of the practices are taken into account in
determining the length of time that the practice is expected to
take in order to repay the loans. This is also the period over
which losses are estimated should default occur within the
contractual period. The provision for expected credit loss is based
on forward-looking information, taking into account expected credit
losses giving due consideration to the Joint Venture's business
plan, as well as macro-economic factors such as growth in the size
of the veterinary market, availability of veterinary practitioners
and cost inflation within the industry. The quantum of operating
loans and other loans and expected credit loss made against these
loans is disclosed in notes 16, 17 and 27.
Assessment of control with regard to Joint Ventures (significant
judgement)
The Group has assessed, and continually assesses,whether the
level of an individual Joint Venture veterinary practice's
indebtedness to the Group, particularly those with high levels of
indebtedness, implies that the Group has the practical ability to
control the Joint Venture, which would result in the requirement to
consolidate. In making this judgement, the Group reviewed the terms
of the Joint Venture agreement and the question of practical
ability, as a provider of working capital to control the activities
of the practice. This included consideration of barriers to the
Group's ability to exercise such practical or other control which
include difficulty in replacing Joint Venture Partners due to the
shortage of veterinarians in the UK and reputational damage within
the veterinary network should the Group attempt to exercise
control, as well as potential barriers to the Joint Venture Partner
exercising their own power over the activities of the practice. We
note that under the terms of the Joint Venture agreement, the
partners run their practices with complete operational and clinical
freedom. The Group is satisfied that on the balance of evidence
from the Group's experience as shareholder and provider of working
capital support to the practices, it does not have the current
ability to exercise control over those practices to which operating
loans are advanced, and therefore non consolidation is
appropriate.
Put and call options (significant estimate)
The Group recognises put and call options over non-controlling
interests (NCI) in its subsidiary undertakings as a liability in
the consolidated balance sheet. The nature of the Group's option
agreements are such that there is an element that is a minimum
amount and a growth element to reward and retain key individuals
employed by the acquired business who are also non-controlling
shareholders which is linked to improvements in the results of the
acquired business. The growth element would be forfeited under
certain conditions by the NCI, including if they ceased to be
employed by the Group.
Upon initial recognition, the minimum amount is recognised as a
liability at fair value, which is estimated as the present value of
the future exercise price based upon the fair value of the business
at acquisition. For the growth element, the expected amount is
charged to the income statement as employment costs over the option
period within non-underlying items. The financial liability is
valued based on management's best estimate of the future pay out,
which is based on the estimated future earnings. The charge is
spread over the financial years before the put and call can be
exercised for the first time.
The Group considers that no reasonably possible change in
assumptions underlying the carrying value of the put and call
options would result in a material range of estimation uncertainty
in the next 12 months. Therefore, the carrying value of the options
is not considered a significant estimate as at 25 March 2021.
Carrying value of inventory (significant estimate)
A provision is made for those items of inventory where the net
realisable value is estimated to be lower than cost. Net realisable
value is based on both historical experience and assumptions
regarding future selling values and disposal channels, and is
consequently a source of estimation uncertainty. At 25 March 2021
the inventory provision amounted to GBP3.9m (26 March 2020:
GBP3.2m). Of this, GBP2.5m of the provision relates to a provision
against ageing inventory. The value of inventory against which an
ageing provision is held is GBP8.9m (26 March 2020: GBP7.1m). The
remaining GBP1.4m of the provision relates to specific inventory
provisioning relating to factors other than ageing. Management
consider the range of reasonably possible estimation uncertainty to
be immaterial given the value of the provision, the value of
inventory against which the provision is held, and the degree of
historical accuracy in the provisioning policy.
1.22 Dividends
Final dividends are recognised in the Group's financial
statements as a liability in the period in which the dividends are
approved by shareholders such that the Company is obliged to pay
the dividend. Interim equity dividends are recognised in the period
in which they are paid.
2 Segmental Reporting
The Group has three reportable segments, Retail, Vet Group and
Central, which are the Group's strategic business units. The
Group's operating segments are based on the internal management
structure and internal management reports, which are reviewed by
the Executive Directors on a periodic basis. The Executive
Directors are considered to be the Chief Operating Decision
Makers.
The Group is a pet care business with the strategic advantage of
being able to provide products, services and advice, addressing all
pet owners' needs. Within this strategic umbrella, the Group has
three reportable segments, Retail, Vet Group and Central, which are
the Group's strategic business units. The strategic business units
offer different products and services, are managed separately and
require different operational and marketing strategies.
The operations of the Retail reporting segment comprise the
retailing of pet products purchased online and in-store, pet sales,
grooming services and insurance products. The operations of the Vet
Group reporting segment comprise First Opinion practices and
specialist referral centres up until 31 December 2020. Central
includes veterinary telehealth business, group costs and finance
expenses. Revenue and costs are allocated to a segment where
reasonably possible.
The following summary describes the operations in each of the
Group's reportable segments. Performance is measured based on
segment underlying operating profit as included in the management
reports that are reviewed by the Executive Directors. These
internal reports are prepared in accordance with IFRS accounting
policies consistent with these financial statements. All material
operations of the reportable segments are carried out in the UK and
all revenue is from external customers.
52 week period ended 25 March 2021
----------------------------------- ----------------------------------------------
Retail Vet Group Central Total
Income statement GBPm GBPm GBPm GBPm
----------------------------------- ------- ----------- --------------- -------
Revenue 1,018.9 123.2 0.7 1,142.8
Gross profit 501.6 56.7 0.5 558.8
Underlying operating profit/(loss) 79.5 36.0 (9.6) 105.9
Non-underlying items - 28.9 - 28.9
------------------------------------- ------- ----------- --------------- -------
Segment operating profit 79.5 64.9 (9.6) 134.8
Net financing expense (12.0) (0.5) (5.9) (18.4)
Profit before tax 67.5 64.4 (15.5) 116.4
------------------------------------- ------- ----------- --------------- -------
Non-underlying operating expenses in the periods ended 25 March
2021 and 26 March 2020 are explained in note 3.
52 week period ended 26 March 2020
----------------------------------- -------------------------------------------
Retail Vet Group Central Total
Income statement GBPm GBPm GBPm GBPm
----------------------------------- ------ ----------- ------------- -------
Revenue 937.6 121.2 - 1,058.8
Gross profit 466.2 51.7 - 517.9
Underlying operating profit/(loss) 89.3 30.6 (8.6) 111.3
Non-underlying items - (7.6) - (7.6)
------------------------------------- ------ ----------- ------------- -------
Segment operating profit/(loss) 89.3 23.0 (8.6) 103.7
Net financing expense (13.3) (0.3) (4.2) (17.8)
Profit/(loss) before tax 76.0 22.7 (12.8) 85.9
------------------------------------- ------ ----------- ------------- -------
52 week period ended 25 March 2021
----------------------------------- -----------------------------------------
Reconciliation of EBITDA before Retail Vet Group Central Total
non-underlying items GBPm GBPm GBPm GBPm
----------------------------------- --------- ------------- -------- -----
Underlying operating profit/(loss) 79.5 36.0 (9.6) 105.9
Depreciation of property, plant
and equipment 24.8 2.1 - 26.9
Depreciation of right-of-use
assets 68.2 2.1 - 70.3
Amortisation of intangible
assets 12.2 1.4 - 13.6
------------------------------------- --------- ------------- -------- -----
Underlying EBITDA 184.7 41.6 (9.6) 216.7
------------------------------------- --------- ------------- -------- -----
52 week period ended 26 March 2020
----------------------------------- -----------------------------------------
Reconciliation of EBITDA before Retail Vet Group Central Total
non-underlying items GBPm GBPm GBPm GBPm
----------------------------------- --------- ------------- -------- -----
Underlying operating profit/(loss) 89.3 30.6 (8.6) 111.3
Depreciation of property, plant
and equipment 25.8 2.5 - 28.3
Depreciation of right-of-use
assets 69.0 2.1 - 71.1
Amortisation of intangible
assets 9.5 0.5 - 10.0
------------------------------------- --------- ------------- -------- -----
Underlying EBITDA 193.6 35.7 (8.6) 220.7
------------------------------------- --------- ------------- -------- -----
EBITDA before non-underlying items is defined on page 85.
52 week period ended 25 March 2021
-------------------------------- -----------------------------------------
Segmental revenue analysis Retail Vet Group Central Total
by revenue stream GBPm GBPm GBPm GBPm
-------------------------------- --------- ------------ ------- -------
Retail - Food 551.5 - - 551.5
Retail - Accessories 431.4 - - 431.4
Retail - Services 36.0 - - 36.0
Vet Group - First Opinion fee
income - 57.0 - 57.0
Vet Group - Company managed
practices - 25.5 - 25.5
Vet Group - Other income - 6.8 - 6.8
Vet Group - Specialist - 33.9 - 33.9
Central - Veterinary telehealth
services - - 0.7 0.7
---------------------------------- --------- ------------ ------- -------
Total 1,018.9 123.2 0.7 1,142.8
---------------------------------- --------- ------------ ------- -------
52 week period ended 26 March 2020
-------------------------------- -----------------------------------------
Segmental revenue analysis Retail Vet Group Central Total
by revenue stream GBPm GBPm GBPm GBPm
-------------------------------- --------- ------------ ------- -------
Retail - Food 517.4 - - 517.4
Retail - Accessories 375.3 - - 375.3
Retail - Services 44.9 - - 44.9
Vet Group - First Opinion fee
income - 53.8 - 53.8
Vet Group - Company managed
practices - 21.6 - 21.6
Vet Group - Other income - 6.2 - 6.2
Vet Group - Specialist - 39.6 - 39.6
---------------------------------- --------- ------------ ------- -------
Total 937.6 121.2 - 1,058.8
---------------------------------- --------- ------------ ------- -------
3 Expenses and auditor's remuneration
Included in operating profit are the following:
52 week 52 week
period period ended
ended 25 26 March
March 2021 2020
GBPm GBPm
---------------------------------------------------------- ----------- -------------
Non-underlying items
Write off and provisions for operating loans, initial
set-up loans, and trading balances with Joint Venture
veterinary practices - (0.3)
Other costs associated with the purchase of Joint Venture
veterinary practices (0.6) 3.5
Impairment of right-of-use assets following acquisition
of Joint Venture veterinary practices - 1.6
Impairment of property, plant & equipment and intangible
assets following acquisition of Joint Venture veterinary
practices - 1.8
Increase in fair value of put and call liability 1.9 1.0
Profit on disposal of subsidiary (30.2) -
Total non-underlying items (28.9) 7.6
Underlying items
Impairment losses on receivables 0.8 0.9
Depreciation of property, plant and equipment 26.9 28.3
Amortisation of intangible assets 13.6 10.0
Depreciation of right-of-use assets 70.3 71.1
Rentals under operating leases:
Expenses relating to short term leases 0.1 0.1
Other income
Rental income from sub-leasing right-of-use assets
to third parties(1) (0.3) (0.3)
Rental income from related parties(1) (7.3) (7.4)
Share based payment charges 4.7 4.2
---------------------------------------------------------- ----------- -------------
(1) This other income is presented within selling and
distribution expenses.
During the 52 week period ended 25 March 2021, the Group
disposed of its 100% shareholding in the subsidiary Pets at Home
Veterinary Specialist Group Limited, and its subsidiaries Northwest
Veterinary Specialists Limited, Anderson Moores Veterinary
Specialists Limited, Eye-Vet Limited, Dick White Referrals Limited
and Veterinary Specialists (Scotland) Limited. The profit on
disposal reported in the non-underlying items above represents
consideration received and costs incurred by the Group in relation
to the disposal, as follows:
GBPm
--------------------------------- ------
Cash consideration received 80.0
Net assets disposed of (48.5)
---------------------------------- ------
Profit on disposal of net assets 31.5
Costs borne by the Group (1.3)
---------------------------------- ------
Profit on disposal 30.2
---------------------------------- ------
Further deferred contingent consideration of GBP20.0m may become
payable at a future date, subject to the Specialist Referral
Centres achieving certain financial KPIs. The fair value of the
deferred consideration is immaterial due to the substantial
uncertainty regarding the timing and achievement of the financial
KPIs, which are not within the control of the Group.
The remaining non-underlying operating expenses in the period
ended 25 March 2021 of GBP1.3m relate to:
- GBP1.9m of non-underlying operating expenses relate to an
increase in the financial liability for put and call options over
shares held by clinicians in Dick White Referrals Limited and
Veterinary Specialists (Scotland) Limited, prior to the disposal of
the Specialist Referral Centres. The charge represents an increase
in the equity 'option' value held by those clinicians based on the
Directors' best estimate of the future settlement on exercise of
the put and call. As a result of the disposal of the Specialist
Referral Centres, the put and call options were settled in the
period and as at 25 March 2021, the financial liability held on the
consolidated balance sheet was GBPnil.
-(GBP0.6m) of non-underlying operating expenses relate to the
release of provisions for exit and closure costs provided for under
IAS 37 in relation to Joint Venture veterinary practices provided
for in the 52 week period ended 26 March 2020.
The non-underlying operating expenses in the period ended 26
March 2020 of GBP7.6m related to:
- (GBP0.3m) related to the release of allowances for expected
credit losses for operating loans, initial set-up loans, and
trading balances to Joint Venture veterinary practices which were
provided for under IFRS 9 by the Group in the period ended 28 March
2019.
- GBP3.5m related to exit and closure costs (provided for under
IAS 37) payable in relation to Joint Venture veterinary practices
which the Group has acquired.
- GBP1.6m related to the write down of right-of-use assets to
their expected recoverable amount, relating to First Opinion
veterinary practices acquired with the intention of being
closed.
- GBP1.8m related to the impairment of property, plant and
equipment and intangible assets relating to the review and
recalibration exercise of the First Opinion veterinary
practices.
- GBP1.0m of non-underlying operating expenses related to an
increase in the financial liability for put and call options over
shares held by clinicians in Dick White Referrals Limited and
Veterinary Specialists (Scotland) Limited.
Income or costs considered by the Directors to be non-underlying
are disclosed separately to facilitate year-on-year comparison of
the underlying trade of the business. The Directors consider
non-underlying costs to be those that are not generated from
ordinary business operations, infrequent in nature and unlikely to
reoccur in the foreseeable future. The Directors consider that
changes to the fair value of the put and call liabilities warrant
separate disclosure due to the nature of these arrangements as they
do not relate to the underlying trade of the business.
Underlying items
The rentals under short term leases disclosed in relation to the
52 week period ended 25 March 2021 and the 52 week period ended 26
March 2020 relate to leases under short term agreements. These fall
under the short term exemption so are excluded from the
requirements of IFRS 16 on the basis that the lease terms are 12
months or less.
Auditor's remuneration
52 week
52 week period period ended
ended 25 26 March
March 2021 2020
GBPm GBPm
------------------------------------------------------------ -------------
Audit of the parent company financial statements 0.0 0.0
Amounts receivable by the Company's auditor and its
associates in respect of:
Audit of financial statements of subsidiaries pursuant
to legislation(1) 0.9 0.7
Review of interim financial statements 0.1 0.1
All other services 0.0 0.0
-------------------------------------------------------- --- -------------
1.0 0.8
-------------------------------------------------------- --- -------------
(1) The comparative auditor's remuneration has been restated to
enhance comparability.
4 Colleague numbers and costs
The average number of persons employed by the Group (including
Directors) during the period, analysed by category, was as
follows:
52 week 52 week
period period ended
ended 25 26 March
March 2021 2020
Number Number
------------------------------- ----------- -------------
Sales and distribution - FTE 6,538 6,432
Administration - FTE 732 707
------------------------------- ----------- -------------
7,270 7,139
------------------------------- ----------- -------------
Sales and distribution - total 8,904 8,506
Administration - total 1,100 1,055
------------------------------- ----------- -------------
10,004 9,561
------------------------------- ----------- -------------
The aggregate payroll costs of these persons were as
follows:
52 week 52 week
period period ended
ended 25 26 March
March 2021 2020
GBPm GBPm
---------------------------------------------------- ----------- -------------
Wages and salaries 227.6 203.1
Social security costs 19.2 17.5
Contributions to defined pension contribution plans 7.6 6.9
---------------------------------------------------- ----------- -------------
254.4 227.5
---------------------------------------------------- ----------- -------------
Remuneration of Executive Directors and Executive Management
Team
52 week 52 week
period period ended
ended 25 26 March
March 2021 2020
GBPm GBPm
---------------------------------------------------------- ----------- -------------
Executive Directors' emoluments including social security
costs 2.1 1.8
Non-Executive Directors' emoluments including social
security costs 0.5 0.5
Executive Directors' amounts receivable under share
options (1) 1.8 1.0
Executive Directors' pension contributions 0.1 0.1
---------------------------------------------------------- ----------- -------------
Total Directors' remuneration 4.5 3.4
---------------------------------------------------------- ----------- -------------
Executive Management Team emoluments including social
security costs(1) 5.5 3.9
Executive Management Team amounts receivable under
share options (1) 2.2 1.4
Executive Management Team pension contributions(1) 0.2 0.2
---------------------------------------------------------- ----------- -------------
Total Executive Management Team remuneration 7.9 5.5
---------------------------------------------------------- ----------- -------------
In the opinion of the Board, the key management as defined under
revised IAS 24 Related Party Disclosures are the Executive
Directors and the Executive Management Team. Executive Directors'
emoluments are also included within the Executive Management Team
emoluments disclosed above.
(1) The comparative numbers in the 52 week period ended 26 March
2020 have been restated to be comparable with the numbers presented
in the 52 week period ended 25 March 2021.
5 Earnings per share
Basic earnings per share is calculated by dividing the net
profit for the period attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
period.
Diluted earnings per share is calculated by dividing the net
profit for the period attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the
period plus the weighted average number of ordinary shares that
would be issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
52 week period ended 52 week period ended
25 March 2021 26 March 2020
------------------------------------------- -------------------------------- --------------------------------
Underlying After non-underlying Underlying After non-underlying
trading items trading items
------------------------------------------- ---------- -------------------- ---------- --------------------
Profit attributable to equity shareholders
of the parent (GBPm) 70.2 99.0 74.9 67.4
------------------------------------------- ---------- -------------------- ---------- --------------------
Basic weighted average number of
shares 500.0 500.0 500.0 500.0
Dilutive potential ordinary shares 11.6 11.6 9.6 9.6
------------------------------------------- ---------- -------------------- ---------- --------------------
Diluted weighted average number of
shares 511.6 511.6 509.6 509.6
------------------------------------------- ---------- -------------------- ---------- --------------------
Basic earnings per share 14.0p 19.8p 15.0p 13.5p
Diluted earnings per share 13.7p 19.4p 14.7p 13.2p
------------------------------------------- ---------- -------------------- ---------- --------------------
6 Finance income
52 week 52 week
period period
ended 25 ended 26
March 2021 March 2020
GBPm GBPm
--------------------------------------------------------- ----------- -----------
Interest receivable on loans to Joint Venture veterinary
practices 0.3 0.4
Other interest receivable 0.0 0.1
Total finance income 0.3 0.5
--------------------------------------------------------- ----------- -----------
7 Finance expense
52 week 52 week
period period
ended 25 ended 26
March 2021 March 2020
GBPm GBPm
-------------------------------------- ----------- -----------
Bank loans at effective interest rate 6.0 4.4
Interest expense on lease liability 12.8 14.0
Other interest expense (0.1) (0.1)
-------------------------------------- ----------- -----------
Total finance expense 18.7 18.3
-------------------------------------- ----------- -----------
8 Taxation
Recognised in the income statement
52 week 52 week
period period
ended 25 ended 26
March 2021 March 2020
GBPm GBPm
------------------------------------------------------ ----------- -----------
Current tax expense
Current period 20.2 22.0
Adjustments in respect of prior periods (1.8) (0.8)
------------------------------------------------------ ----------- -----------
Current tax expense 18.4 21.2
------------------------------------------------------ ----------- -----------
Deferred tax expense
Origination and reversal of temporary differences (2.2) (3.4)
Impact of difference between deferred and current tax
rates - 0.2
Adjustments in respect of prior periods 1.2 0.5
------------------------------------------------------ ----------- -----------
Deferred tax expense (1.0) (2.7)
------------------------------------------------------ ----------- -----------
Total tax expense 17.4 18.5
------------------------------------------------------ ----------- -----------
The UK corporation tax standard rate for the period is 19%
(2020: 19%). The deferred tax liability at 25 March 2021 has been
calculated at 19% (2020: 19%). In the 3 March 2021 budget it was
announced that the UK tax rate would increase to 25% from 1 April
2023. This will have a consequential effect on the Group's future
tax charge. If this rate change had been substantively enacted at
the current balance sheet date, the impact on the deferred tax
position would not have been material as a significant proportion
of the deferred tax assets and liabilities unwind at 19%.
Deferred tax recognised in comprehensive income
52 week 52 week
period period
ended 25 ended 26
March 2021 March 2020
GBPm GBPm
-------------------------------------------------------- ----------- -----------
Effective portion of changes in fair value of cash flow
hedges (note 22) 0.3 (0.9)
-------------------------------------------------------- ----------- -----------
Reconciliation of effective tax rate
52 week period ended 52 week period ended
25 March 2021 26 March 2020
--------------------------------- ---------------------------------
Underlying Non-underlying Underlying Non-underlying
trading items Total trading items Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ---------- -------------- ----- ---------- -------------- -----
Profit for the period 70.2 28.8 99.0 74.9 (7.5) 67.4
Total tax expense 17.3 0.1 17.4 18.6 (0.1) 18.5
-------------------------------- ---------- -------------- ----- ---------- -------------- -----
Profit excluding taxation 87.5 28.9 116.4 93.5 (7.6) 85.9
-------------------------------- ---------- -------------- ----- ---------- -------------- -----
Tax using the UK corporation
tax rate for the period of
19% (52 week period ended
26 March 2020: 19%) 16.6 5.5 22.1 17.8 (1.5) 16.3
Impact of difference between
deferred and current tax rates - - - 0.2 - 0.2
Depreciation on expenditure
not eligible for tax relief 0.6 - 0.6 0.9 - 0.9
Expenditure not eligible for
tax relief 0.6 (5.4) (4.8) 0.1 1.4 1.5
Adjustments in respect of
prior periods (0.5) - (0.5) (0.4) - (0.4)
-------------------------------- ---------- -------------- ----- ---------- -------------- -----
Total tax expense 17.3 0.1 17.4 18.6 (0.1) 18.5
-------------------------------- ---------- -------------- ----- ---------- -------------- -----
The UK corporation tax standard rate for the 52 week period
ended 25 March 2021 was 19% (52 week period ended 26 March 2020:
19%). The effective tax rate before non-underlying items for the 52
week period ended 25 March 2021 was 19.7%.
9 Dividends paid and proposed
Group and Company
-----------------------------
52 week period 52 week
ended period ended
25 March 26 March
2021 2020
GBPm GBPm
-------------------------------------------------------- -------------- -------------
Declared and paid during the period
Final dividend of 5.0p per share (2020: 5.0p per share) 24.7 24.8
Interim dividend of 2.5p per share (2020: 2.5p per
share) 12.4 12.3
-------------------------------------------------------- -------------- -------------
Proposed for approval by shareholders at the AGM
Final dividend of 5.5p per share (2020: 5.0p per share) 27.2 24.7
-------------------------------------------------------- -------------- -------------
The trustees of the following holdings of Pets at Home Group Plc
shares under the Pets at Home Group Employee Benefit Trust have
waived or otherwise foregone any and all dividends paid in relation
to the periods ended 25 March 2021 and 26 March 2020 and to be paid
at any time in the future (subject to the exceptions in the
relevant trust deed) on its respective shares for the time being
comprised in the trust funds:
Computershare Nominees (Channel Islands) Limited (holding at 25
March 2021: 5,958,116 shares; holding at 26 March 2020: 5,749,377
shares).
10 Business combinations
Subsidiaries acquired
On 27 November 2020, the Group acquired 100% of the total share
capital of Pet Advisory Services Limited and its subsidiary
VetsDirect Limited in exchange for cash consideration. Pet Advisory
Services Limited and Vets Direct Limited are a veterinary
tele-health service. The Group expects to realise both revenue and
cost synergies from the acquisition, which will allow the Group to
better support its customers by providing out of hours veterinary
services.
Proportion
of voting
equity Cash consideration
instruments transferred
Principal activity Date of acquisition acquired GBPm
---------------------- ---------------------- -------------------- ------------ ------------------
Pet Advisory Services Veterinary telehealth 27 November
Limited services 2020 100% 16.5
Veterinary telehealth 27 November
VetsDirect Limited services 2020 100% -
---------------------- ---------------------- -------------------- ------------ ------------------
Assets acquired and liabilities recognised at the date of
acquisition
The provisional amounts recognised in respect of identifiable
assets and liabilities relating to the acquisition are as
follows:
Adjustments Fair value
Book value of assets on acquisition of assets and
and GBPm liabilities
liabilities acquired acquired
GBPm GBPm
---------------------------- ------------------------ --------------- --------------
Current assets
Cash and cash equivalents 0.7 - 0.7
Trade and other receivables 1.0 - 1.0
Non-current assets
Intangible assets 0.2 4.5 4.7
Tangible fixed assets 0.0 - 0.0
Current liabilities
Trade and other payables (0.5) - (0.5)
Non-current liabilities
Deferred tax liability - (0.8) (0.8)
Net assets 1.4 3.7 5.1
------------------------------- --------------------- --------------- --------------
Goodwill arising on acquisition
GBPm
------------------------------------- ------
Consideration 16.5
Less: Fair value of assets acquired (5.1)
------------------------------------- ------
Goodwill arising on acquisition 11.4
------------------------------------- ------
Consideration has been given to other intangibles that are
recognisable under IFRS 3 Business Combinations. No favourable
leases were owned by the company at the time of acquisition. A
customer list intangible asset of GBP1.9m and an intangible asset
of GBP2.6m relating to call script know how have been identified
and recognised separately from goodwill at fair value. None of the
goodwill identified on this acquisition is expected to be
deductible for tax purposes.
The intangible asset recognised on acquisition relates to:
- Customer contracts of GBP1.9m have been recognised and valued
using the excess earnings method, and will be amortised over 10
years
- Call scripts know how of GBP2.6m have been recognised and
valued using the replacement cost method, and will be amortised
over 10 years
All other assets and liabilities have been valued at fair value
on acquisition.
Acquisition of Joint Venture veterinary practices
In the 52 week period ended 25 March 2021, the Group has
acquired 100% of the 'A' shares of 6 veterinary practices, which
were previously accounted for as Joint Venture veterinary
practices. These practices were previously accounted for as Joint
Venture veterinary practices as the Group only held 100% of the
non-participatory 'B' ordinary shares, equating to 50% of the total
shares. Acquisition of the 'A' shares has led to the control and
consolidation of these practices. A detailed explanation for the
basis of consolidation can be found in note 1.4.
In the 52 week period ended 25 March 2021, GBP1.4m of operating
loans relating to these practices were written off in advances of
the acquisitions.
Up to the date of acquisition and in the comparative period
being the 52 week period ending 26 March 2020, these entities
listed below were all accounted for as a Joint Venture veterinary
practice where the Group held 100% of the non-participatory 'B'
ordinary shares. Acquisition of the 'A' shares has led to the
control and consolidation of these practices on the dates below,
leading to control from the date of acquisition and consolidation
from that date forward.
Subsidiaries acquired
Total proportion
Proportion of voting
of voting equity instruments Cash consideration
Principal equity instruments owned following transferred
activity Date of acquisition acquired the acquisition GBPm
-------------------- ----------- -------------------- ------------------- -------------------- ------------------
Sidcup Vets4Pets Veterinary
Limited practice 1 July 2020 50% 100% 0.9
Sydenham Vets4Pets Veterinary
Limited practice 1 July 2020 50% 100% 0.7
Grantham Vets4Pets Veterinary 20 October
Limited practice 2020 50% 100% 0.0
Rawtenstall
Vets4Pets Veterinary 28 October
Limited practice 2020 50% 100% 0.0
Wallasey Bidston
Moss Veterinary 18 December
Vets4Pets Limited practice 2020 50% 100% 0.0
Companion Care
(Farnborough) Veterinary
Limited practice 18 March 2021 50% 100% 0.0
-------------------- ----------- -------------------- ------------------- -------------------- ------------------
Assets acquired and liabilities recognised at the date of
acquisition
The amounts recognised in respect of identifiable assets and
liabilities relating to the acquisitions are as follows. The
acquisition disclosures have been combined as each acquisition is
considered to be individually immaterial to the Group.
Adjustments Fair value
Book value of assets on acquisition of assets and
and GBPm liabilities
liabilities acquired acquired
GBPm GBPm
---------------------------- ------------------------ --------------- --------------
Current assets
Cash and cash equivalents 0.7 - 0.7
Trade and other receivables 0.2 - 0.2
Inventories 0.1 - 0.1
Non-current assets
Tangible fixed assets 0.4 - 0.4
Right-of-use assets 0.4 - 0.4
Intangible assets - 0.7 0.7
Non-current liabilities
Lease liabilities (0.4) - (0.4)
Current liabilities
Bank loans and overdrafts (0.7) - (0.7)
Trade and other payables (0.7) - (0.7)
Net assets 0.0 0.7 0.7
------------------------------- --------------------- --------------- --------------
Goodwill arising on acquisition
GBPm
------------------------------------- ------
Consideration 1.7
Less: Fair value of assets acquired (0.7)
------------------------------------- ------
Goodwill arising on acquisition 1.0
------------------------------------- ------
Impairment of goodwill (0.6)
------------------------------------- ------
Carrying value of goodwill 0.4
------------------------------------- ------
The consideration shown within the table above relates to both
consideration for the purchase of A-shares and cash settlement of
'A' shareholder Joint Venture Partner loans, which were repaid to
the 'A' shareholder at the point of acquisition. The impairment of
goodwill relates to loss making practices.
In line with IFRS 3, the right-of-use asset has been brought on
at value equal to the lease liability, adjusted for any
unfavourable market conditions. These leases relate to standalone
veterinary practices.
11 Property, plant and equipment
Fixtures,
fittings,
Freehold Leasehold tools and
property improvements equipment Total
GBPm GBPm GBPm GBPm
----------------------------------- --------- ------------- ---------- ------
Cost
Balance at 26 March 2020 2.4 63.9 239.9 306.2
Additions - 6.4 12.5 18.9
On acquisition (note 10) - - 0.4 0.4
Disposals - (7.9) (7.5) (15.4)
----------------------------------- --------- ------------- ---------- ------
Balance at 25 March 2021 2.4 62.4 245.3 310.1
----------------------------------- --------- ------------- ---------- ------
Depreciation
Balance at 26 March 2020 0.3 26.8 162.0 189.1
Depreciation charge for the period - 4.0 22.9 26.9
Disposals - (1.4) (4.1) (5.5)
----------------------------------- --------- ------------- ---------- ------
Balance at 25 March 2021 0.3 29.4 180.8 210.5
----------------------------------- --------- ------------- ---------- ------
Net book value
At 26 March 2020 2.1 37.1 77.9 117.1
----------------------------------- --------- ------------- ---------- ------
At 25 March 2021 2.1 33.0 64.5 99.6
----------------------------------- --------- ------------- ---------- ------
Fixtures,
fittings,
Freehold Leasehold tools and
property improvements equipment Total
GBPm GBPm GBPm GBPm
-------------------------------------- --------- ------------- ---------- -----
Cost
Balance at 28 March 2019 2.5 59.4 222.9 284.8
Additions - 5.4 17.6 23.0
On acquisition (note 10) - 0.5 0.3 0.8
Disposals (0.1) (1.4) (0.9) (2.4)
-------------------------------------- --------- ------------- ---------- -----
Balance at 26 March 2020 2.4 63.9 239.9 306.2
-------------------------------------- --------- ------------- ---------- -----
Depreciation
Balance at 28 March 2019 0.3 22.5 138.3 161.1
Depreciation charge for the period 0.0 4.3 24.0 28.3
Impairment of assets (non-underlying) - 1.3 0.4 1.7
Disposals (0.0) (1.3) (0.7) (2.0)
-------------------------------------- --------- ------------- ---------- -----
Balance at 26 March 2020 0.3 26.8 162.0 189.1
-------------------------------------- --------- ------------- ---------- -----
Net book value
At 28 March 2019 2.2 36.9 84.6 123.7
-------------------------------------- --------- ------------- ---------- -----
At 26 March 2020 2.1 37.1 77.9 117.1
-------------------------------------- --------- ------------- ---------- -----
12 Leases
As Lessee
Property, plant and equipment comprise owned and leased assets
that do not meet the definition of investment property.
The majority of the Group's trading stores, standalone
veterinary practices, Distribution Centres and Support Offices are
leased under operating leases, with remaining lease terms of
between 1 and 20 years. The Group also has a number of non-property
operating leases relating to vehicle, equipment and material
handling equipment, with remaining lease terms of between 1 and 6
years.
Right-of-use assets
Property Equipment Total
GBPm GBPm GBPm
----------------------------------- -------- --------- -------
Cost
Balance at 26 March 2020 486.3 11.6 497.9
Additions 34.8 3.3 38.1
On acquisition (note 10) 0.4 - 0.4
Disposals (28.0) (0.2) -(28.2)
Balance at 25 March 2021 493.5 14.7 508.2
----------------------------------- -------- --------- -------
Depreciation
Balance at 26 March 2020 69.1 3.6 72.7
Depreciation charge for the period 67.0 3.3 70.3
Disposals (3.3) (0.2) (3.5)
Balance at 25 March 2021 132.8 6.7 139.5
----------------------------------- -------- --------- -------
Net book value
At 26 March 2020 417.2 8.0 425.2
----------------------------------- -------- --------- -------
At 25 March 2021 360.7 8.0 368.7
----------------------------------- -------- --------- -------
The costs relating to leases for which the Group applied the
practical expedient described in paragraph 5a of IFRS 16 (leases
with a contract term of less than 12 months) amounted to GBP0.1m in
the 52 week period ended 25 March 2021.
Property Equipment Total
GBPm GBPm GBPm
----------------------------------- -------- --------- -----
Cost
Balance at 29 March 2019 463.0 10.1 473.1
Additions 20.6 1.5 22.1
On acquisition (note 10) 2.7 - 2.7
Balance at 26 March 2020 486.3 11.6 497.9
----------------------------------- -------- --------- -----
Depreciation
Balance at 29 March 2019 - - -
Depreciation charge for the period 67.5 3.6 71.1
Impairment (non-underlying) 1.6 - 1.6
Balance at 26 March 2020 69.1 3.6 72.7
----------------------------------- -------- --------- -----
Net book value
At 29 March 2019 463.0 10.1 473.1
----------------------------------- -------- --------- -----
At 26 March 2020 417.2 8.0 425.2
----------------------------------- -------- --------- -----
The following table sets out the maturity analysis of lease
payments, showing the undiscounted lease payments to be received
after the reporting date:
Maturity analysis - contractual undiscounted cash flows
At 26 March
At 25 March 2021 2020
GBPm GBPm
--------------------------------------------- ---------------- ------------
Less than one year 78.4 82.2
Between one and five years 241.9 258.0
More than 5 years 131.9 182.6
Total undiscounted lease liabilities 452.2 522.8
--------------------------------------------- ---------------- ------------
Carrying value of lease liabilities included
in the statement of financial position 409.7 463.9
Current 78.4 83.7
Non-current 331.3 380.2
--------------------------------------------- ---------------- ------------
For the lease liabilities at 25 March 2021 a 0.1% change in the
discount rate used would have increased the carrying value of lease
liabilities by GBP1.5m.
Surplus leases
The Group has a small number of leases on properties from which
it no longer trades. A small number of these properties are
currently vacant or the sublet is not for the full term of the
lease and there is deemed to be a risk on the sublet.
Short term leases
The Group has a small number of leases on properties from which
it no longer trades, or a subsection of a trading retail store.
These properties are sublet to third parties at contracted
rates.
In line with IAS 36, the carrying value of the right-of-use
asset will be assessed for indicators of impairment and an
impairment charge will be recognised if necessary. Under IAS 17, an
onerous lease provision was recognised where management believed
there was a risk of default or where the property remained vacant
for a period of time. As part of this review the Group has assessed
the ability to sub-lease the property and the right-of-use asset
has been written down to GBPnil where the Group does not consider a
sublease likely.
13 Intangible assets
Customer
lists and
Goodwill 'know how' Software Total
GBPm GBPm GBPm GBPm
-------------------------------------- -------- ----------- -------- -------
Cost
Balance at 26 March 2020 981.3 1.9 63.1 1,046.3
Additions - - 25.5 25.5
On acquisition 11.8 5.1 0.2 17.1
Disposals (34.6) (0.8) (0.1) (35.5)
Balance at 25 March 2021 958.5 6.2 88.7 1,053.4
-------------------------------------- -------- ----------- -------- -------
Amortisation
Balance at 26 March 2020 0.1 0.5 39.3 39.9
Amortisation charge for the period - 0.2 13.4 13.6
Disposals - (0.3) - (0.3)
Balance at 25 March 2021 0.1 0.4 52.7 53.2
-------------------------------------- -------- ----------- -------- -------
Net book value
At 26 March 2020 981.2 1.4 23.8 1,006.4
-------------------------------------- -------- ----------- -------- -------
At 25 March 2021 958.4 5.8 36.0 1,000.2
Customer
Goodwill list Software Total
GBPm GBPm GBPm GBPm
-------------------------------------- -------- ----------- -------- -------
Cost
Balance at 28 March 2019 981.3 1.7 47.5 1,030.5
Additions - 0.2 15.6 15.8
Balance at 26 March 2020 981.3 1.9 63.1 1,046.3
-------------------------------------- -------- ----------- -------- -------
Amortisation
Balance at 28 March 2019 - 0.3 29.5 29.8
Amortisation charge for the period - 0.1 9.8 9.9
Impairment of assets (non-underlying) 0.0 0.1 - 0.1
Impairment of goodwill (underlying) 0.1 - - 0.1
-------------------------------------- -------- ----------- -------- -------
Balance at 26 March 2020 0.1 0.5 39.3 39.9
-------------------------------------- -------- ----------- -------- -------
Net book value
At 28 March 2019 981.3 1.4 18.0 1,000.7
-------------------------------------- -------- ----------- -------- -------
At 26 March 2020 981.2 1.4 23.8 1,006.4
-------------------------------------- -------- ----------- -------- -------
The goodwill impairment in the 52 week period ended 26 March
2020 relates to goodwill acquired as part of the buyout of Bicester
Vets4Pets Limited in the 52 week period ended 28 March 2019.
Impairment testing
Cash generating units ('CGUs'), as defined by IAS 36, within the
Group are considered to be aligned to three operating segments as
shown in the table below. Within the Retail operating segment, the
CGU comprises the body of stores, online operations, grooming
operations and insurance operations. Within the Vet Group operating
segment, the CGU comprises the First Opinion veterinary practices
and included Specialist Referral Centres up until 31 December 2020.
Central includes veterinary telehealth business, group costs and
finance expenses. Revenue and costs are allocated to a segment and
CGU where reasonably possible.
As at 25 March 2021 and 26 March 2020, the Group is deemed to
have CGUs as follows:
Goodwill
---------- -----------------------------
At 26 March
At 25 March 2021 2020
GBPm GBPm
---------- ---------------- -----------
Retail 586.1 586.1
Central 11.4 -
Vet Group 360.9 395.1
---------- ---------------- -----------
Total 958.4 981.2
---------- ---------------- -----------
The recoverable amount of the CGU group has been calculated with
reference to its value in use. The key assumptions of this
calculation are shown below:
52 week period
52 week period ended ended
25 March 2021 26 March 2020
---------------------------------------------- ---------------------- -------------------
Retail Vet Group Retail Vet Group
---------------------------------------------- -------- ------------ ------ ---------
Period on which management approved forecasts
are based (years) 5 5 5 5
Growth rate applied beyond approved forecast
period 2.0% 3.5% 2.0% 3.5%
Discount rate (pre-tax) 10% 10% 10% 10%
Like-for-like sales growth 8% 10% 4% 11%
Gross profit margin 48% 58% 48% 49%
---------------------------------------------- -------- ------------ ------ ---------
The goodwill is considered to have an indefinite useful economic
life and the recoverable amount is determined based on
'value-in-use' calculations. These calculations use a post-tax cash
flow projection based on a five-year plan approved by the Board.
For the purposes of intangible asset impairment testing, the model
removes all cash flows associated with business units (for example
stores or practices yet to open, but within the planning horizon)
which the Group has a strategic intention to invest capital in, but
has not yet done so, thus ensuring that the future cash flows used
in modelling for impairment exclude any cash flows where the
investment is yet to take place, in accordance with the
requirements of IAS 36 to exclude capital expenditure to improve
asset performance. Contributions from and costs associated with new
stores and veterinary practices which are already operational at
the impairment test date are included in the cash flows. The Group
reviews components within CGUs such as stores and veterinary
practices for indicators of impairment. This approach is consistent
with impairment reviews carried out in the 2020 financial
statements.
The key assumptions in the business plans for both the Retail
and Vet Group CGUs are like-for-like sales growth and gross profit
margin. The Retail forecast assumptions reflect continual
innovation and our deep understanding of our customers,
incorporating assumptions based on past experience of the industry,
products and markets in which the CGU operates, in order to
generate the detailed assumptions used in the annual budget setting
process, and five year strategic planning process. The Vet Group
forecast assumptions are based on a deep understanding of the
maturity profile of the practices and their performance,
incorporating assumptions based on past experience of the industry,
services and markets in which the CGU operates in order to generate
the detailed assumptions used in the annual budget setting process,
and five year strategic planning process. The projections are based
on all available information and growth rates do not exceed growth
rates experienced in prior periods. A different set of assumptions
may be more appropriate in future years depending on changes in the
macro-economic environment and the industry in which each CGU
operates. No impairment review has been carried out on the Central
CGU due to the acquisition being completed on 27 November 2020 and
subsequent trading being in line with financial forecasts.
The discount rate was estimated based on past experience and a
market participant weighted average cost of capital. A post tax
discount rate was used within the value in use calculation. The
pre-tax discount rate is disclosed above in line with IAS 36
requirements.
The Directors have assumed a growth rate projection beyond the
five-year period based on market growth rates based on past
experience within the Group taking into account the economic growth
forecasts within the relevant industries. The long term growth rate
in the Vets CGU exceeds the long term average for the UK but is an
appropriate rate for the industry.
The Group disposed of GBP34.6m of goodwill in the 52 week period
ended 25 March 2021 in relation to the disposal of the Specialist
Referral Centres. The goodwill was previously held in the Vet Group
CGU. In line with IAS 36 and in the absence of a market valuation,
the Group applied the value in use method to value the total Vet
Group CGU using the value of discounted future cash flows. Given
the sale of the Specialist Referral Centres, the value in use
method cannot be used to value the element of the Vet Group CGU
relating to the Specialist Referral Centres, and instead the value
of the disposal proceeds has been used for this element. On the
basis of the GBP80.0m of sales proceeds, the Group disposed of 9.0%
of the Vet Group CGU which equated to GBP34.6m of goodwill disposed
of.
The total recoverable amount in respect of goodwill for the CGU
group as assessed by the Directors using the above assumptions is
greater than the carrying amount and therefore no impairment charge
has been recorded in each period, with the exception of the
goodwill impaired immediately following the acquisition of certain
First Opinion veterinary practices as part of the review and
recalibration exercise (see note 10).
Within the Retail CGU, a number of sensitivities have been
applied to the assumptions in reaching this conclusion
including:
- Reduction in growth rate applied beyond forecast period by 100
bps
- Increasing the discount rate by 100 bps
- Reduction in gross margin percentage of 100 bps
None of the above, considered reasonably possible changes in
assumptions, would result in impairment when applied either
individually or collectively.
Within the Vet Group CGU, a number of sensitivities have been
applied to the assumptions in reaching this conclusion
including:
- Reduction in growth rate applied beyond forecast period by 100
bps
- Increasing the discount rate by 100 bps
- Reduction in gross margin percentage of 100 bps
None of the above, considered reasonably possible changes in
assumptions, would result in impairment when applied either
individually or collectively. The same sensitivities were applied
to both the Retail CGU and Vet Group CGU in the 52 week period
ended 26 March 2020. In addition, further sensitivities were
applied in the 52 week period ended 26 March 2020 to reflect the
risk of COVID-19. These were:
- Reduction in FY21 H1 Retail sales by 30% as a COVID-19
sensitivity
- Reduction in FY21 H1 Vet Group sales by 50% as a COVID-19
sensitivity
Neither of the above, considered reasonably possible changes in
assumptions when applied, resulted in impairment when applied
either individually or collectively.
The Directors consider that it is not reasonably possible for
the assumptions to change so significantly as to eliminate the
excess of the recoverable amount over the carrying value.
14 Inventories
At 26 March
At 25 March 2020
2021 GBPm GBPm
--------------- ----------- -----------
Finished goods 83.7 62.8
--------------- ----------- -----------
The cost of inventories recognised as an expense and included in
'cost of sales' is GBP487.6m (period ended 26 March 2020:
GBP438.3m).
Inventory expensed to cost of sales includes the cost of the
Stock Keeping Units (SKUs) sold, supplier income, stock wastage and
foreign exchange variances.
At 25 March 2021 the inventory provision amounted to GBP3.9m (26
March 2020: GBP3.2m). The inventory provision is calculated by
reference to the age of the SKU and the length of time it is
expected to take to sell. The provision percentages applied in
calculating the provision are as follows:
-- Discontinued stock greater than 365 days: 100%
-- Current stock greater than 365 days with a use by date:
50%
-- Current stock within 180 and 365 days with a use by date:
25%
-- Greater than 180 days with no use by date: 25%
In addition, a provision is held to account for store stock
losses during the period since which the SKU was last counted.
The value of inventory against which an ageing provision is held
is GBP8.9m (2020: GBP7.1m).
In the 52 week period ended 25 March 2021, the value of
inventory written off to the income statement amounted to GBP9.3m
(52 week period ended 26 March 2020: GBP8.7m).
15 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the
following:
At 25 March 2021 At 26 March 2020
-------------------------------------- -------------------------- --------------------------
Assets Liabilities Total Assets Liabilities Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Property, plant and equipment 2.6 - 2.6 2.4 - 2.4
Financial assets 0.6 - 0.6 0.9 - 0.9
Financial liabilities - (0.2) (0.2) - (0.2) (0.2)
Other short term timing
differences 2.4 (5.0) (2.6) 2.2 (5.7) (3.5)
Arising on acquisition
of intangible assets - (0.9) (0.9) - - -
SBP reserve 3.4 - 3.4 - - -
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Net deferred tax assets/(liabilities) 9.0 (6.1) 2.9 5.5 (5.9) (0.4)
-------------------------------------- ------ ----------- ----- ------ ----------- -----
Movement in deferred tax during the period
26 March Recognised Recognised Recognised 25 March
2020 in income in equity on acquisition 2021
GBPm GBPm GBPm GBPm GBPm
----------------------------------- -------- ---------- ---------- --------------- --------
Property, plant and equipment 2.4 0.2 - - 2.6
Net financial assets/(liabilities) 0.7 - (0.3) - 0.4
Other short term timing
differences (3.5) 0.9 - - (2.6)
Arising on acquisition
of intangible assets - - - (0.9) (0.9)
SBP reserve - - 3.4 - 3.4
----------------------------------- -------- ---------- ---------- --------------- --------
(0.4) 1.1 3.1 (0.9) 2.9
----------------------------------- -------- ---------- ---------- --------------- --------
Other short term timing differences primarily relate to share
based payment schemes and inventory provisions.
Movement in deferred tax during the prior period
28 March Recognised Recognised 26 March
2019 in income in equity 2020
GBPm GBPm GBPm GBPm
------------------------------------ -------- ---------- ---------- --------
Property, plant and equipment 0.2 2.2 - 2.4
Net financial assets/ (liabilities) (0.2) - 0.9 0.7
Other short term timing differences (4.0) 0.5 - (3.5)
------------------------------------ -------- ---------- ---------- --------
(4.0) 2.7 0.9 (0.4)
------------------------------------ -------- ---------- ---------- --------
Company
Movement in deferred tax during the period
26 March Recognised Recognised 25 March
2020 in income in equity 2021
GBPm GBPm GBPm GBPm
--------------------- -------- ---------- ---------- --------
Net financial assets 0.4 0.0 (0.1) 0.3
SBP reserve - - 3.4 3.4
--------------------- -------- ---------- ---------- --------
0.4 0.0 3.3 3.7
--------------------- -------- ---------- ---------- --------
The rate used to calculate deferred tax assets and liabilities
is 19% in line with the corporation tax rate.
16 Other financial assets and liabilities
Group Company
---------------------------------------- ------------------------ ------------------------
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
---------------------------------------- ----------- ----------- ----------- -----------
Non-current assets
Investments in Joint Venture veterinary
practices 0.2 0.4 - -
Loans to Joint Venture veterinary
practices - initial set up loans 11.3 13.3 - -
Loans to Joint Venture veterinary
practices - other loans 3.3 4.0 - -
Other investments 1.1 1.1 - -
Other receivables 0.6 1.8 - -
Interest rate swaps 0.2 0.3 0.2 0.3
16.7 20.9 0.2 0.3
---------------------------------------- ----------- ----------- ----------- -----------
Investments in Joint Venture veterinary practices
Investments represent GBP0.2m (2020: GBP0.4m) of the 'B' share
capital in Joint Venture veterinary practice companies. These
investments are held at cost less impairment. The fair values of
investments in unlisted equity securities are considered to be
their carrying value as the impact of discounting future cash flows
has been assessed as not material and the investment is
non-participatory. The share capital of the veterinary practice
companies is split equally into 'A' ordinary shares (held by Joint
Venture Partners) and 'B' ordinary shares (held by the Group). Any
operational decisions require the agreement of the Joint Venture
Partner.
Under the terms of the agreements, the Group ('B' shareholder)
is not entitled to any profits, losses or dividends, or any surplus
on winding up or disposal, although it is entitled to appoint
Directors to the Board and carry the same shareholder voting rights
as 'A' ordinary shareholders.
The agreements entitle the Group to receive income in relation
to support services offered in such areas as clinical development,
promotion and methods of operation as well as service activities
including accountancy, legal and property.
Loans to Joint Venture veterinary practices - initial set up
loans
Loans to Joint Venture veterinary practices of GBP11.3m (2020:
GBP13.3m) are provided to Joint Venture veterinary practice
companies trading under the Companion Care and Vets4Pets brands, in
which the Group's share interest is non-participatory. These loans
represent a long term investment in the Joint Venture, supporting
their initial set up and working capital, and are held at amortised
cost under IFRS 9. The carrying value is cost as the impact of
discounting future cash flows at a market rate of interest has been
assessed as not material. Under the terms of the loans provided to
veterinary companies trading under the Companion Care and Vets4Pets
brands the loans attract varying interest rates between 2% and 3%.
There is no set date for repayment of the loans due to the
Group.
The balances are shown net of an expected credit loss ('ECL') of
GBP1.2m (2020: GBPnil). An ECL has been recognised during the
period in relation to loans with Joint Venture veterinary practices
where the Group considers the loan to be in default and credit
impaired based on the criteria set out in note 1.15.
Gross Expected Carrying
loan credit value of
value loss loan
GBPm GBPm GBPm
----------------------------------- ------ -------- ---------
As at 26 March 2020 13.3 - 13.3
Net repayment and further advances (0.8) - (0.8)
Provisions made during the period - (1.2) (1.2)
----------------------------------- ------ -------- ---------
As at 25 March 2021 12.5 (1.2) 11.3
Closing position 12.5 (1.2) 11.3
----------------------------------- ------ -------- ---------
Analysis of expected credit loss by risk category
The following table presents an analysis of the credit risk and
credit impairment of initial set up loans held at amortised cost.
Based on their score card performance, loans are categorised as
high, medium or low credit risk. The loss allowance is calculated
in accordance with the policy set out in note 1.15, depending on
the credit risk of each loan and the Group's expectations of future
cash flow recoverability.
Credit risk At 26 March
At 25 March 2021 2020
GBPm GBPm
----------------------
Low 10.5 13.3
Medium 1.2 -
High 0.8 -
Gross carrying amount 12.5 13.3
Loss allowance (1.2) -
Net carrying amount 11.3 13.3
----------------------
Loans to Joint Venture veterinary practices - other loans
Loans to Joint Venture veterinary practices - other loans of
GBP3.3m (2020: GBP4.0m) represent loan balances to Joint Venture
veterinary practices. These loans are unsecured, typically for five
to seven years and attract an interest rate of LIBOR plus 2.8%. The
loans are accounted for at amortised cost under IFRS 9. The
carrying value is considered to be cost as the impact of
discounting future cash flows at a market rate of interest has been
assessed as not material. The loans are typically to support
capacity expansion. The balances have been assessed under the
criteria set out in note 1.15 as fully performing, and any expected
credit losses are immaterial (2020: GBPnil).
Other investments
Other investments are held at fair value through other
comprehensive income ('FVOCI'). The fair values of investments in
unlisted equity securities are considered to be their carrying
value as the impact of discounting future cash flows has been
assessed as not material and the investment is
non-participatory.
Group Company
At 25 March At 26 March At 25 March At 26 March
Other financial assets 2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
----------- ----------- -----------
Current assets
Fuel forward contracts 0.1 - - -
Forward exchange contracts 0.8 0.8 - -
Other receivables 0.6 0.7 - -
-----------
1.5 1.5 - -
Group Company
At 25 March At 26 March At 25 March At 26 March
Other financial liabilities 2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
----------- ----------- -----------
Current liabilities
Fuel forward contracts (0.0) (0.4) - -
Forward exchange contracts (1.2) (1.7) - -
Interest rate swaps (0.1) - (0.1) (0.0)
Finance lease liabilities - (0.1) - -
-----------
(1.3) (2.2) (0.1) (0.0)
Group Company
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
----------- ----------- -----------
Non-current liabilities
Interest rate swaps (1.6) (2.3) (1.6) (2.3)
Put and call liability - (3.4) - -
Finance lease liabilities - (0.1) - -
(1.6) (5.8) (1.6) (2.3)
17 Trade and other receivables
Group Company
----------------------------------------- ------------------------
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
----------------------------------------- ----------- ----------- ----------- -----------
Trade receivables 11.4 17.4 - -
Amounts owed by Joint Venture veterinary
practices - funding for new practices 0.3 1.6 - -
Amounts owed by Joint Venture veterinary
practices - operating loans 20.5 29.5 - -
Other receivables 9.0 2.2 - -
Amounts owed by Group undertakings - - 587.9 579.2
Prepayments 0.5 1.5 - -
Accrued income 7.6 3.7 - -
49.3 55.9 587.9 579.2
----------------------------------------- ----------- ----------- ----------- -----------
Trade and other receivables
The impairment of trade and other receivables is assessed in
line with IFRS 9. As at 25 March 2021 and 26 March 2020 the impact
of expected credit loss on these balances was deemed to be
immaterial and as such no provision has been made.
The Group apply the simplified approach under IFRS 9 and default
to lifetime expected credit loss. The ECL is immaterial on the
trade receivables balance for the 52 week period ended 25 March
2021.
Amounts owed by Joint Venture veterinary practices
Amounts owed by Joint Venture veterinary practices represent
funding for new practices, trading balances and operating loans
owed by J oint Venture veterinary practices to the Group. Operating
loans are provided on a short term monthly cycle to the extent that
a practice requires additional funding above their external bank
loan. Practices generate cash on a monthly basis which is applied
to the repayment of brought forward operating loans. For immature
practices, loan balances may increase due to operating
requirements. Based on a projected cash flow forecast on a practice
by practice basis, the funding is expected to be required for a
number of years, however as cash is applied against opening loan
balances, the Group's expectation is that the brought forward
balance will be repaid in cash within 12 months. The loans have
been classified as current on this basis and the Group has chosen
not to charge interest on these balances, and they are initially
recognised under IFRS 9 at their nominal value as the effect of
discounting the expected cash flows based on the effective interest
rate at the market rate of interest is not material. The loans
advanced to the practices are interest free and either repayable on
demand or repayable within 90 days of demand. No facility exists
and the levels of loans are monitored in relation to review of the
practices performance against business plan and a number of
financial and non-financial KPIs in accordance with the policy set
out in note 1.15.
For those practices in default, a credit impairment charge is
recognised under IFRS 9 taking into account the Group's
expectations of future cash flow recoverability. For other
practices, a credit impairment charge is recognised under IFRS 9,
taking into account both the probability of loss and the loss
proportion given default.
The balances above are shown net of allowances for expected
credit losses held for operating loans of GBP6.2m (2020: GBP8.0m).
The basis for this allowance and the movement in the period is set
out below and further detail is provided in note 1.21.
Group
Gross Expected Carrying
loan credit value of
value loss loan
GBPm GBPm GBPm
---------
As at 26 March 2020 37.5 (8.0) 29.5
Loans written off (1.4) 1.4 -
Net repayment and further advances (9.4) - (9.4)
Release of impairment recognised during the period - 0.4 0.4
-------- ---------
As at 25 March 2021
Closing position 26.7 (6.2) 20.5
-------- ---------
During the period ended 25 March 2021, GBP1.4m of operating
loans which were deemed to be in default were written off in
advance of the acquisition of the 'A' shares which led to the
control and consolidation of these practices. Further details of
these acquisitions are provided in note 10.
The Group holds expected credit losses of GBP6.2m against
operating loans of GBP26.7m (26 March 2020: ECLs of GBP8.0m against
operating loans of GBP37.5m). The movements are shown in the table
above. The Group continues to work with a number of Joint Venture
Partners, where the partners choose to follow the Group's
recommendations on remediation plans aimed at improving practice
performance. Further details regarding credit risk are provided in
note 1.15.
The following table presents an analysis of the credit risk and
credit impairment of operating loans held at amortised cost. Based
on their score card performance, loans are categorised as high,
medium or low credit risk. The loss allowance is calculated in
accordance with the policy set out in note 1.15, depending on the
credit risk of each loan.
Credit risk At 26 March
At 25 March 2021 2020
GBPm GBPm
----------------------
Low 15.9 26.6
Medium 5.4 6.7
High 5.4 4.2
Gross carrying amount 26.7 37.5
Loss allowance (6.2) (8.0)
Net carrying amount 20.5 29.5
----------------------
Should each operating loan risk, as defined by the risk criteria
in note 1.15, increase by 10%, this would lead to an increase in
the required provision for operating loans of GBP0.4m (26 March
2020: GBP1.9m). This sensitivity is considered by management to
represent a reasonably possible range of estimation uncertainty,
based on the variance in current trading performance within these
Joint Venture veterinary practices. The factors which give rise to
the estimation uncertainty include macro-economic and industry
specific factors, including the level of industry growth, as well
as gross margin percentages achieved within the industry, which
contain a number of factors including the availability of suitably
qualified veterinary personnel. Further details are provided in
note 27.
Accrued income
Accrued income relates to income in relation to fees to Joint
Venture veterinary practices, revenues generated through Specialist
Referral Centres up until 31 December 2020, and overrider and
promotional income from suppliers which have not yet been invoiced
. Accrued income is classified as current as it is expected to be
invoiced and received within 12 months of the period end date.
Supplier income is recognised on an accruals basis, based on the
expected entitlement that has been earned up to the balance sheet
date for each relevant supplier contract. As detailed in note 1.18,
supplier income is recognised as a credit within gross margin to
cost of sales and is outside of the scope of IFRS 15 and therefore
a contract asset has not been separately recognised. Further detail
of the Group's revenue recognition policy is provided in note
1.18.
Company
Amounts owed by Group undertakings
Amounts owed by Group undertakings have been assessed in line
with IFRS 9 and an assessment is made of the expected credit loss.
As at 25 March 2021 and 26 March 2020 the impact of expected credit
loss on these balances was deemed to be immaterial and as such no
provision has been made.
18 Cash and cash equivalents
Group Company
-------------------------- ------------------------ ------------------------
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
-------------------------- ----------- -----------
Cash and cash equivalents 101.4 79.1 - -
----------- -----------
19 Other interest-bearing loans and borrowings
Group Company
------------------------
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
------------------------ ----------- ----------- -----------
Non-current liabilities
Unsecured bank loans 98.7 163.3 98.7 163.3
------------------------ ----------- ----------- ----------- -----------
Terms and debt repayment schedule
Face value Carrying Face value Carrying
at 25 amount at 26 amount
Nominal March at 25 March March at 26 March
interest 2021 2021 2020 2020
Currency rate Year of maturity GBPm GBPm GBPm GBPm
--------- ------------ ---------- ------------
Revolving credit
facility GBP LIBOR +1.15% 2023 100.0 98.7 165.0 163.3
--------- ---------- ------------ ---------- ------------
The Group has a revolving credit facility of GBP248.0m which
expires on 25 September 2023 and a further facility of GBP100.0m
which expired on 12 May 2021.
The drawn amount on the GBP248.0m facility was GBP100.0m at 25
March 2021 (GBP165.0m at 26 March 2020) and this amount is reviewed
each month. Interest is charged at LIBOR plus a margin based on
leverage on a pre-IFRS 16 basis (net debt: EBITDA). Face value
represents the principal value of the revolving credit facility.
The facility is unsecured. In addition to this, the Group held a
further GBP100.0m 364 day liquidity facility which commenced on 13
May 2020 and expired on 12 May 2021. The drawn amount on the
GBP100.0m facility at 25 March 2021 was GBPnil (26 March 2020:
GBPnil).
Interest-bearing borrowings are recognised initially at fair
value, being the principal value of the loan net of attributable
transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at a carrying value, which
represents the amortised cost of the loans using the effective
interest method.
The analysis of repayments on the loans is as follows:
At 26 March
At 25 March 2020
2021 GBPm GBPm
--------------------------------------- -----------
Within one year or repayable on demand - -
Between one and two years - -
Between two and five years 100.0 165.0
----------- -----------
100.0 165.0
----------- -----------
The loans at 25 March 2021 and 26 March 2020 are held by the
Company.
The Group's policy with regard to interest rate risk is to hedge
the appropriate level of borrowings by entering into fixed rate
agreements. The Group has entered into one fixed rate interest rate
swap agreement over a total of GBP100.0m of the senior facility
borrowings at the balance sheet date at a fixed rate of 0.918%
which expires on 31 March 2021. The Group has further fixed
interest rate swap agreements over a total of GBP100.0m of the
senior facility borrowings at the balance sheet date at a blended
fixed rate of 0.811% which commence on 31 March 2021 and expire on
25 September 2023.
The hedges are structured to hedge at least 70% of the forecast
outstanding debt for the next 12 months.
Analysis of changes in net debt
At Non-cash At
26 March Cash flow movement 25 March
2020 GBPm GBPm GBPm 2021 GBPm
--------------------------------------- ---------- --------- --------- ----------
Cash and cash equivalents 79.1 22.3 - 101.4
Debt due within one year at face value - - - -
Debt due after one year at face value (165.0) 65.0 - (100.0)
--------------------------------------- ---------- --------- --------- ----------
Net debt (85.9) 87.3 - 1.4
--------------------------------------- ---------- --------- --------- ----------
20 Trade and other payables
Group Company
----------------------------------------- ------------------------
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
----------------------------------------- ----------- ----------- ----------- -----------
Current
Trade payables 107.1 110.8 - -
Accruals 57.9 45.1 0.4 0.1
Amounts owed to Joint Venture veterinary
practices 17.6 6.7 - -
Other payables including tax and
social security 28.5 34.0 - -
Amounts owed to Group undertakings - - 509.3 387.7
----------------------------------------- ----------- ----------- ----------- -----------
211.1 196.6 509.7 387.8
----------------------------------------- ----------- ----------- ----------- -----------
Amounts owed to Joint Venture veterinary practices that relate
to trading balances are interest free and repayable on demand.
Within accruals above, contract liabilities under IFRS 15 of
GBP0.8m (2020: GBP0.7m) relate to advanced consideration received
from customers in relation to gift vouchers, cards and points
redeemable by charities. This revenue will be recognised as the
vouchers, cards and points are redeemed, which is expected to be
over the next two years.
Within accruals above, contract liabilities under IFRS 15 of
GBP0.4m (2020: GBP3.2m) relate to advanced consideration received
from customers in relation to online orders which have not yet been
delivered. This revenue will be recognised as the online orders are
delivered to customers, which is expected to be in less than one
week from the balance sheet date.
21 Provisions
Provisions
for exit and
closure costs
relating to
Closed Joint Venture
Dilapidation stores veterinary
provision provision practices Total
GBPm GBPm GBPm GBPm
----------
Balance at 26 March 2020 1.9 1.1 2.2 5.2
Provisions made during the period 2.1 0.4 2.7 5.2
Provisions utilised during the period (0.4) (0.8) (2.3) (3.5)
Provisions released during the period (0.2) - (0.3) (0.5)
Balance at 25 March 2021 3.4 0.7 2.3 6.4
------------ ---------- -----
At 25 March At 26 March
2021 GBPm 2020 GBPm
------------ -----------
Current 4.3 3.9
Non-current 2.1 1.3
----------- -----------
6.4 5.2
----------- -----------
The closed stores provision relates to the rates, service charge
and utilities payable on sublet or vacant stores. The timing of the
utilisation of these provisions is variable dependent upon the
lease expiry dates of the properties concerned, which vary between
1 and 4 years. Market conditions have a significant impact and
hence the assumptions on future cash flows are reviewed regularly
and revisions to the provision made where necessary.
The provision is discounted in line with the discount rates used
to calculate the value of a right-of-use asset. A decrease in this
rate of 100 bps would increase the provision by GBP0.0m.
The provisions for exit and closure costs relating to Joint
Venture veterinary practices relate to expenses for any Joint
Venture veterinary practices that the Group has bought out or has
offered to buy out from Joint Venture Partners, and therefore which
have been provided for under IAS 37. The timing of the utilisation
of these provisions is variable dependent upon the lease expiry
dates of the properties concerned, which vary between 1 and 17
years. Market conditions have a significant impact and hence the
assumptions on future cash flows are reviewed regularly and
revisions to the provision made where necessary.
22 Capital and reserves
Share capital
Group
Share capital Share capital
Number GBPm
----------------- ------------- -------------
At 28 March 2019 500,000,000 5.0
At 26 March 2020 500,000,000 5.0
At 25 March 2021 500,000,000 5.0
------------- -------------
Company
Share capital
25 March
2021
GBPm
-------------
At beginning of period 5.0
On issue at period end 5.0
-------------
Share capital
26 March
2020
GBPm
-------------
At beginning of period 5.0
On issue at period end 5.0
-------------
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
Consolidation and Merger reserves
The consolidation reserve and the merger reserve arose as a
result of the creation of Pets at Home Group Plc and its purchase
of the existing group of companies as part of the Initial Public
Offering in 2014. As part of the IPO, a number of shares in Plc
were issued in exchange for various instruments or cash. The
premium arising on the issue was allocated between the share
premium and merger reserve. A consolidation reserve was also
created which reflected the difference between Plc reserves and the
consolidated equity of PAH Lux S.a.r.l at the start of the
comparative period.
Translation reserve
The translation reserve comprises all foreign exchange
differences arising since 21 November 2011, the date of
incorporation of Pets at Home Asia Ltd where the functional
currency differs from that of the rest of the Group.
Cash flow hedging reserve
The cash flow hedging reserve comprises the effective portion of
the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet
occurred.
Retained earnings
Included within the Group is Pets at Home Employee Benefit Trust
(EBT). The EBT purchases shares to fund the share option schemes.
As at 25 March 2021, the EBT held 5,958,116 ordinary shares (26
March 2020: 5,749,377) with a cost of GBP18,501,342 (2020:
GBP11,805,745). The market value of these shares as at 25 March
2021 was 386.20 pence per share (26 March 2020: 268.80).
Other comprehensive income
25 March 2021
Cash flow Total other
Translation hedging comprehensive
reserve reserve income
GBPm GBPm GBPm
----------- --------- --------------
Other comprehensive income 0.1 - 0.1
Effective portion of changes in fair value of cash
flow hedges - 5.0 5.0
Deferred tax on changes in fair value of cash flow
hedges - (0.3) (0.3)
----------- --------- --------------
Total other comprehensive income 0.1 4.7 4.8
----------- --------- --------------
26 March 2020
Cash flow Total other
Translation hedging comprehensive
reserve reserve income
GBPm GBPm GBPm
--------- --------------
Other comprehensive income (0.1) - (0.1)
Effective portion of changes in fair value of cash
flow hedges - (5.5) (5.5)
Deferred tax on changes in fair value of cash flow
hedges - 0.9 0.9
----------- --------- --------------
Total other comprehensive income (0.1) (4.6) (4.7)
----------- --------- --------------
23 Financial instruments
Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk, fair value interest
rate risk and cash flow interest rate risk), credit risk and
liquidity risk.
Risk management framework
Risk management in respect of financial risk is carried out by
the Group Treasury function under policies approved by the Board of
Directors. The Board of Directors has overall responsibility for
the establishment and oversight of the Group's risk management
framework. The Board provides written principles through its Group
Treasury Policy for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial
instruments and non-derivative financial instruments, and
investment of excess liquidity.
The main objectives of the Group Treasury function are:
To ensure shareholder and management expectations are managed on
cash flow and earnings volatility resulting from financial market
movements;
To protect the expected cash flow and earnings from interest
rate and foreign exchange fluctuations to within parameters
acceptable to the Board and shareholders; and
To control banking costs and service levels.
Market risk
Foreign currency risk
The Group sources a significant level of purchases in foreign
currency, in the region of US$100 million each financial year, and
monitors its foreign currency requirements through short, medium
and long term cash flow forecasting. The value of purchases in US
dollars continues to increase each year and the risk management
policy has evolved with this increased risk.
At 25 March 2021, the Group's policy is to hedge up to 95% of
the next 12 months and additionally up to 60% of the following six
months out to 18 months forecast foreign exchange transactions,
using foreign currency bank accounts and forward foreign exchange
contracts. The transactions are deemed to be 'highly probable' and
are based on historical knowledge and forecast purchase and sales
projections.
The Group's exposure to foreign currency risk is as follows.
This is based on the carrying amount for monetary financial
instruments, except for derivatives which are based on notional
amounts:
25 March 2021
Euro US Dollar HKD Total
GBPm GBPm GBPm GBPm
--------------------------- ----- --------- ----- -----
Cash and cash equivalents 0.5 0.3 0.0 0.8
Trade payables (0.9) (5.9) - (6.8)
Forward exchange contracts - (0.4) - (0.4)
--------------------------- ----- --------- ----- -----
Balance sheet exposure (0.4) (6.0) 0.0 (6.4)
--------------------------- ----- --------- ----- -----
26 March 2020
Euro US Dollar HKD Total
GBPm GBPm GBPm GBPm
--------------------------- ----- --------- ----- -----
Cash and cash equivalents 0.8 0.4 0.0 1.2
Trade payables (1.1) (6.5) - (7.6)
Forward exchange contracts (0.0) (1.0) - (1.0)
--------------------------- ----- --------- ----- -----
Balance sheet exposure (0.3) (7.1) 0.0 (7.4)
--------------------------- ----- --------- ----- -----
Sensitivity analysis
A 5% weakening of the following currencies against the pound
sterling at the period end date in both years would have increased
profit or loss or equity by the amounts shown below. This
calculation assumes that the change occurred at the balance sheet
date and had been applied to risk exposures existing at that
date.
This analysis assumes that all other variables, in particular
other exchange rates and interest rates, remain constant.
Equity Profit or loss
----------
25 March 26 March 25 March 26 March
2021 2020 2021 2020
GBPm GBPm GBPm GBPm
---------- -------- -------- -------- --------
US Dollar - - 0.3 0.3
Euro - - - -
---------- -------- -------- -------- --------
A 5% strengthening of the above currencies against the pound
sterling in any period would have had the equal but opposite effect
on the above currencies to the amounts shown above, on the basis
that all other variables remain constant.
Managing interest rate benchmark reform and associated risks
A fundamental reform of major interest rate benchmarks is being
undertaken globally, including the replacement of some interbank
offered rates (IBORs) with alternative nearly risk-free rates
(referred to as 'IBOR reform'). The Group has exposures to IBORs on
its financial instruments that will be replaced or reformed as part
of these market-wide initiatives. There is uncertainty over the
timing and the methods of transition in some jurisdictions that the
Group operates in. The Group anticipates that IBOR reform will
impact its risk management and hedge accounting.
The Group's exposure to sterling LIBOR designated in hedging
relationships is GBP100.0m at 25 March 2021 representing both the
nominal amount of the hedging interest rate swap and the principal
amount of the hedged sterling-denominated revolving credit
facility. The Group is working with its banking syndicate and
hedging partners to document a transition from LIBOR to a SONIA
benchmark rate by the end of calendar year 2021, for both the
revolving credit facility and interest rate swap hedging products.
The effect of the transition on the Group and Company's financial
statements for the periods ending 31 March 2022 and 30 March 2023,
which represents the remaining term of these facilities and
products, is expected to be less than GBP0.1m.
(ii) Interest rate risk
Cash flow and fair value interest rate risk
The Group's interest rate risk arises from long term borrowings.
As at 25 March 2021, the Group had a revolving credit facility with
a face value totalling GBP100.0m. The Group's borrowings as at 25
March 2021 incur interest at a rate of 1.15% plus LIBOR at the
leverage prevalent in the period, which exposes the Group to cash
flow interest rate risk. The analysis of loan repayments is
detailed in note 19.
The Group's policy with regard to interest rate risk is to hedge
the appropriate level of borrowings by entering into fixed rate
agreements. The Group has a fixed rate interest rate swap agreement
over a total of GBP100.0m of the senior facility borrowings at the
balance sheet date at a fixed rate of 0.918% which expires on 31
March 2021. The Group has further fixed interest rate swap
agreements over a total of GBP100.0m of the senior facility
borrowings at the balance sheet date at a blended fixed rate of
0.811% which commence on 31 March 2021 and expire on 25 September
2023. The hedge is structured to hedge at least 70% of the forecast
outstanding debt for the next year.
Profile
At the balance sheet date the interest rate profile of the
Group's interest-bearing financial instruments was:
Group Company
--------------------------
Book value Book value Book value Book value
At 25 March At 26 March At 25 March At 26 March
2021 GBPm 2020 GBPm 2021 GBPm 2020 GBPm
------------ ------------
Fixed rate instruments
Financial liabilities 100.0 162.4 100.0 162.4
Variable rate instruments
Financial liabilities - 0.9 - 0.9
------------ ------------
Total financial liabilities 100.0 163.3 100.0 163.3
------------ ------------
All borrowings bear a variable rate of interest based on LIBOR.
Group policy is to hedge at least 70% of the loan to ensure a fixed
rate of interest. Therefore, designated above is the portion of the
loan hedged by a fixed rate interest rate swap and the remaining
un-hedged portion is designated as variable rate.
Sensitivity analysis
A change of 50 basis points in interest rates at the period end
date would have increased/ (decreased) equity and profit or loss by
the amounts shown below. This calculation assumes that the change
occurred at the balance sheet date and had been applied to risk
exposures existing at that date.
This analysis assumes that all other variables, in particular
foreign currency rates, remain constant and considers the effect of
financial instruments with variable interest rates, financial
instruments at fair value through profit or loss or available for
sale with fixed interest rates and the fixed rate element of
interest rate swaps. The analysis is performed on the same basis
for the comparative period.
At 25 March At 26 March
2021 GBPm 2020 GBPm
--------------- -----------
Equity
Increase 0.5 0.8
Decrease (0.5) (0.8)
Profit or loss
Increase - -
Decrease - -
----------- -----------
Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers, investment securities and operating
loans to Joint Venture veterinary practices.
Credit risk also arises from cash and cash equivalents,
derivative financial instruments and deposits with banks and
financial institutions. The Group ensures that the banks used for
the financing of the revolving credit facilities and interest rate
swap agreements hold an acceptable risk rating by independent
parties.
The Group has in place certain guarantees over the bank loans
taken out by a number of Joint Venture veterinary practice
companies in which it holds an investment. Further details of these
guarantees are disclosed in note 27. The performance of the Joint
Venture veterinary practice companies is reviewed on an ongoing
basis.
Exposure to credit risk
The Group's maximum exposure to credit risk, being the carrying
amount of financial assets, is summarised in the table within the
fair values section below.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
Management prepares and monitors rolling forecasts of the
Group's cash balances based on expected cash flows to ensure, as
far as possible, that it will have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions
without risking damage to the Group's reputation. Covenants are
monitored on a regular basis to ensure there is no risk or breach
which would lead to an 'Event of Default' and compliance
certificates are issued as required to the syndicate agent.
The following are the contractual maturities of financial
liabilities, including estimated interest payments:
Group
25 March 2021
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ----------- --------- -------
Non-derivative financial
liabilities
Bank loans (note 19) 98.7 100.0 - - 100.0 -
Trade payables (note 20) 107.1 107.1 107.1 - - -
Derivative financial liabilities
Interest rate swaps used
for hedging:
Outflow (note 16) 1.7 1.7 0.1 0.8 0.8 -
Forward exchange contracts
used for hedging:
Outflow (note 16) 1.2 1.2 1.2 - - -
Fuel forward contracts
used for hedging:
Outflow (note 16) 0.0 0.0 0.0 - - -
208.7 210.0 108.4 0.8 100.8 -
--------------------------------- ----------- --------- -------
26 March 2020
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 163.3 165.0 - - 165.0 -
Trade payables (note 20) 110.8 110.8 110.8 - - -
Finance lease liabilities
(note 16) 0.2 0.2 0.1 0.1 - -
Put and call liability
(note 16) 3.4 3.4 - 3.0 0.2 0.2
Derivative financial liabilities
Interest rate swaps used
for hedging:
Outflow (note 16) 2.3 2.3 0.0 1.0 1.3 -
Forward exchange contracts
used for hedging:
Outflow (note 16) 1.7 1.7 1.7 - - -
Fuel forward contracts
used for hedging:
Outflow (note 16) 0.4 0.4 0.4 0.0 - -
282.1 283.8 113.0 4.1 166.5 0.2
--------------------------------- ----------- --------- ------- ------------- ---------
Company
25 March 2021
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 98.7 100.0 - - 100.0 -
98.7 100.0 - - 100.0 -
------------------------- ----------- --------- ------- ------------- ---------
26 March 2020
Carrying Contractual 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- --------- ------- ------------- ---------
Non-derivative financial
liabilities
Bank loans (note 19) 163.3 165.0 - - 165.0 -
163.3 165.0 - - 165.0 -
------------------------- ----------- --------- ------- ------------- ---------
Liquidity risk and cash flow hedges
Cash flow hedges
The following table indicates the periods in which the cash
flows associated with cash flow hedging instruments are expected to
occur and to affect profit or loss:
Group
25 March 2021
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 0.2 0.2 - - 0.2 -
Liabilities (note 16) (1.7) (1.7) (0.1) (0.8) (0.8) -
Forward exchange contracts:
Assets (note 16) 0.8 0.8 0.8 - - -
Liabilities (note 16) (1.2) (1.2) (1.2) - - -
Fuel forward contracts:
Assets (note 16) 0.1 0.1 0.1 - - -
Liabilities (note 16) (0.0) (0.0) (0.0) - - -
---------------------------- -------- ----------- -------- ------- ------------- ---------
(1.8) (1.8) (0.4) (0.8) (0.6) -
---------------------------- -------- ----------- -------- ------- ------------- ---------
26 March 2020
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 0.3 0.3 - - 0.3 -
Liabilities (note 16) (2.3) (2.3) 0.0 (1.0) (1.3) -
Forward exchange contracts:
Assets (note 16) 0.8 0.8 0.8 - - -
Liabilities (note 16) (1.7) (1.7) (1.7) - - -
Fuel forward contracts:
Liabilities (note 16) (0.4) (0.4) (0.4) (0.0) - -
---------------------------- -------- ----------- -------- ------- ------------- ---------
(3.3) (3.3) (1.3) (1.0) (1.0) -
---------------------------- -------- ----------- -------- ------- ------------- ---------
Company
25 March 2021
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 0.2 0.2 - - 0.2 -
Liabilities (note 16) (1.7) (1.7) (0.1) (0.8) (0.8) -
(1.5) (1.5) (0.1) (0.8) (0.6) -
---------------------- ----------- -------- ------- ------------- ---------
26 March 2020
Carrying Expected 1 year 1 to <2 2 to <5 5 years
amount cash flows or less years years and over
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ----------- -------- ------- ------------- ---------
Interest rate swaps:
Assets (note 16) 0.3 0.3 - - 0.3 -
Liabilities (note 16) (2.3) (2.3) - (1.0) (1.3) -
(2.0) (2.0) - (1.0) (1.0) -
---------------------- ----------- -------- ------- ------------- ---------
Fair values of financial instruments
Investments
The fair values of investments are considered to be their
carrying value as the impact of discounting future cash flows has
been assessed as not material and the investment is
non-participatory.
Trade and other payables and receivables
The fair values of these items are considered to be their
carrying value as the impact of discounting future cash flows has
been assessed as not material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand (such as term deposits), then the fair
value is estimated at the present value of future cash flows,
discounted at the market rate of interest at the balance sheet
date.
Long term and short term borrowings
The fair value of bank loans and other loans approximates their
carrying value as they have interest rates based on LIBOR.
Short term deposits
The fair value of short term deposits is considered to be their
carrying value as the balances are held in floating rate accounts
where the interest rate is reset to market rates.
Derivative financial instruments
The fair values of forward exchange contracts and interest rate
swap contracts are calculated by management based on external
valuations received from the Group's bankers and are based on
forward exchange rates and anticipated future interest yield
respectively.
Contingent consideration
Contingent consideration on acquisition or disposal of a
subsidiary is valued at fair value at the time of acquisition or
disposal. Any subsequent changes in fair values are recognised in
profit or loss.
Put and call options over non-controlling interests
Put and call options over non-controlling interests are
recognised at fair value at the acquisition date and included
within the valuation of goodwill. Subsequent changes to fair value
are recognised in profit or loss.
Fair values
The fair values of all financial assets and financial
liabilities by class together with their carrying amounts shown in
the balance sheet are as follows:
Fair value hierarchy
The table below shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels
in the fair value hierarchy.
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs)
25 March 2021
Financial
Fair value FVOCI assets Other Total
- hedging - equity at amortised financial carrying
instruments instruments cost liabilities amount
Carrying amount GBPm GBPm GBPm GBPm GBPm
Financial assets measured at fair
value
Investments in Joint Venture veterinary
practices (note 16) - 0.2 - - 0.2
Other investments (note 16) - 1.1 - - 1.1
Forward exchange contracts used for
hedging (note 16) 0.8 - - - 0.8
Fuel forward contracts used for hedging
(note 16) 0.1 - - - 0.1
Interest rate swaps used for hedging
(note 16) 0.2 - - - 0.2
1.1 1.3 - - 2.4
Financial assets not measured at
fair value
Current trade and other receivables
(note 17) - - 20.4 - 20.4
Amounts owed by Joint Venture veterinary
practices - funding, trading and operating
loans (note 17) - - 20.8 - 20.8
Cash and cash equivalents (note 18) - - 101.4 - 101.4
Loans to Joint Venture veterinary
practices - initial set up loans (note
16) - - 11.3 - 11.3
Loans to Joint Venture veterinary
practices - other loans (note 16) - - 3.3 - 3.3
Other receivables (note 16) - - 1.2 - 1.2
- - 158.4 - 158.4
Financial liabilities measured at
fair value
Fuel forward contracts used for hedging
(note 16) (0.0) - - - (0.0)
Forward exchange contracts used for
hedging (note 16) (1.2) - - - (1.2)
Interest rate swaps used for hedging
(note 16) (1.7) - - - (1.7)
(2.9) - - - (2.9)
Financial liabilities not measured
at fair value
Current lease liabilities (note 12) - - - (78.4) (78.4)
Non-current lease liabilities (note
12) - - - (331.3) (331.3)
Trade payables (note 20) - - - (107.1) (107.1)
Amounts owed to Joint Venture veterinary
practices (note 20) - - - (17.6) (17.6)
Other interest-bearing loans and borrowings
(note 19) - - - (98.7) (98.7)
- - - (633.1) (633.1)
25 March 2021
Level Level Level
1 2 3 Total
Fair value GBPm GBPm GBPm GBPm
Financial assets measured at fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.2 0.2
Other investments (note 16) - - 1.1 1.1
Financial assets not measured at fair value
Amounts owed by Joint Venture veterinary
practices - Funding and operating loans
(note 17) - - 20.8 20.8
Loans to Joint Venture veterinary practices
- initial set up loans (note 16) - - 11.3 11.3
Loans to Joint Venture veterinary practices
- other loans (note 16) - - 3.3 3.3
Other receivables (note 16) - - 1.2 1.2
Financial liabilities not measured at fair
value
Other interest-bearing loans and borrowings
(note 19) - (100.0) - (100.0)
26 March 2020
Financial
Fair value FVOCI assets Other Total
- hedging - equity at amortised financial carrying
instruments instruments cost liabilities amount
Carrying amount GBPm GBPm GBPm GBPm GBPm
Financial assets measured at fair
value
Investments in Joint Venture veterinary
practices (note 16) - 0.4 - - 0.4
Other investments (note 16) - 1.1 - - 1.1
Forward exchange contracts used for
hedging (note 16) 0.8 - - - 0.8
Interest rate swaps used for hedging
(note 16) 0.3 - - - 0.3
1.1 1.5 - - 2.6
Financial assets not measured at
fair value
Current trade and other receivables
(note 17) - - 19.6 - 19.6
Amounts owed by Joint Venture veterinary
practices - funding, trading and operating
loans (note 17) - - 31.1 - 31.1
Cash and cash equivalents (note 18) - - 79.1 - 79.1
Loans to Joint Venture veterinary
practices - initial set up loans (note
16) - - 13.3 - 13.3
Loans to Joint Venture veterinary
practices - other loans (note 16) - - 4.0 - 4.0
Other receivables (note 16) - - 2.5 - 2.5
- - 149.6 - 149.6
Financial liabilities measured at
fair value
Fuel forward contracts used for hedging
(note 16) (0.4) - - - (0.4)
Forward exchange contracts used for
hedging (note 16) (1.7) - - - (1.7)
Interest rate swaps used for hedging
(note 16) (2.3) - - - (2.3)
(4.4) - - - (4.4)
Financial liabilities not measured
at fair value
Finance lease liabilities (note 16) - - - (0.2) (0.2)
Current lease liabilities (note 12) - - - (83.7) (83.7)
Non-current lease liabilities (note
12) - - - (380.2) (380.2)
Trade payables (note 20) - - - (110.8) (110.8)
Amounts owed to Joint Venture veterinary
practices (note 20) - - - (6.7) (6.7)
Put & call liability (note 16) - - - (3.4) (3.4)
Other interest-bearing loans and borrowings
(note 19) - - - (163.3) (163.3)
- - - (748.3) (748.3)
26 March 2020
Level Level Level
1 2 3 Total
Fair value GBPm GBPm GBPm GBPm
Financial assets measured at fair value
Investments in Joint Venture veterinary
practices (note 16) - - 0.4 0.4
Other investments (note 16) - - 1.1 1.1
Financial assets not measured at fair value
Amounts owed by Joint Venture veterinary
practices - funding and operating loans
(note 17) - 31.1 - 31.1
Loans to Joint Venture veterinary practices
- initial set up loans (note 16) - 13.3 - 13.3
Loans to Joint Venture veterinary practices
- other loans (note 16) - 4.0 - 4.0
Other receivables (note 16) - 2.5 - 2.5
Financial liabilities not measured at fair
value
Put & call liability - - (3.4) (3.4)
Other interest-bearing loans and borrowings
(note 19) - (165.0) - (165.0)
Changes in liabilities arising from financing activities
Loans and Lease Total
borrowings liabilities
GBPm GBPm GBPm
Balance at 26 March 2020 163.3 463.9 627.2
Changes from financing cash flows
Proceeds from loans and borrowings - - -
Repayment of borrowings (65.0) - (65.0)
Payment of lease liabilities - (79.2) (79.2)
Total changes from financing cash flows 98.3 384.7 483.0
Other changes
Interest expense on lease liabilities - 12.8 12.8
Additions to lease liabilities - 38.5 38.5
Disposal of lease liabilities - (26.3) (26.3)
Amortisation of debt issue costs 0.4 - 0.4
Total other changes 0.4 25.0 25.4
Balance at 25 March 2021 98.7 409.7 508.4
Measurement of fair values
The following table shows the valuation techniques used in
measuring Level 2 and Level 3 fair values at the balance sheet
dates, as well as the significant unobservable inputs used.
Type Valuation technique Significant Inter-relationship between
unobservable significant unobservable
inputs inputs and fair value
measurement
Investment The fair values of investments Not applicable Not applicable
in equity in unlisted equity securities
securities are considered to be
their carrying value
as the impact of discounting
future cash flows has
been assessed as not
material and the investment
is non-participatory.
Forward exchange Market comparison technique Not applicable Not applicable
contracts - the fair values are
and interest based on broker quotes.
rate swaps Similar contracts are
traded in an active market
and the quotes reflect
the actual transactions
on similar instruments.
Other financial Other financial liabilities Future earnings Fair value linked to
liabilities include the fair values performance increase or decrease
of the put and call options in the best estimate
over the non-controlling of the future earnings
interests of subsidiary performance
undertakings. The fair
values represent the
best estimate of amounts
payable based on future
earnings performance
discounted to present
value.
Hedge accounting
Cash flow hedges
At 25 March 2021 and 26 March 2020, the Group held the following
instruments to hedge exposures to changes in foreign currency and
interest rates.
Maturity
1-6 months 6-12 months More than 1-6 months 6-12 months More
1 year than
1 year
2021 2021 2021 2020 2020 2020
Foreign currency risk
Forward exchange contracts
Net exposure (GBPm) 42.4 18.0 - 36.6 15.0 -
Average GBP-USD forward
contract rate 1.32 1.36 - 1.27 1.31 -
Average GBP-EUR forward
contract rate 1.11 1.15 - 1.14 1.19 -
Interest rate risk
Interest rate swaps
Net exposure (GBPm) 100.0 - 100.0 162.4 - 100.0
Average fixed interest
rate 0.918% 0.811% 0.814% - 0.865%
Company
The Company held interest rate swaps as at 25 March 2021 and 26
March 2020 which are valued as above.
Capital management
The Group's objectives when managing capital, which is deemed to
be total equity plus total debt, are to safeguard the Group's
ability to continue as a going concern in order to provide returns
for shareholders and benefits for other stakeholders, through the
optimisation of the debt and equity balance, and to maintain a
strong credit rating and headroom on financial covenants. The Group
manages its capital structure and makes appropriate decisions in
light of the current economic conditions and strategic objectives
of the Group.
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the Group.
The funding requirements of the Group are met by the utilisation
of external borrowings together with available cash, as detailed in
note 19.
A key objective of the Group's capital management is to maintain
compliance with the covenants set out in the revolving credit
facility and to maintain a comfortable level of headroom over and
above these requirements.
Management have continued to measure and monitor covenant
compliance throughout the period and the Group has complied with
the requirements set.
24 Share based payments
At 25 March 2021 and 26 March 2020, the Group has five share
award plans, all of which are equity settled schemes.
1 The Co-Invest Plan (CIP)
On 25 February 2014 the Company adopted the Co-Invest Plan
(CIP). Matching awards under the CIP (as described in section 1(b)
below) were made on 17 March 2014 to Executive Directors and the
Senior Executives by reference to corresponding investment pledges
by those colleagues.
These matching awards vested over a period of three years
subject to the satisfaction of performance conditions and once
vested as to performance became exercisable in equal one-third
tranches in years three, four and five subject to continued
employment with the Group. These awards were granted at nil
cost.
(a) Eligibility
Only the Executive Directors, the Senior Executives and certain
other senior colleagues were selected to participate in the
CIP.
(b) Type of awards
Colleagues were invited to participate in the CIP by making an
'investment' or 'pledge' of their own shares (the 'Co-Invest
Shares'), which could include existing, locked-in shares or new
shares acquired with cash, in return for a nil cost-matching award
over shares (the 'Matching Award').
Matching Awards were granted by reference to a ratio not
exceeding one matched share for every Co-Invest Share 'pledged'.
Matching Awards under the CIP did not form part of a participant's
pensionable earnings and are not transferable other than on
death.
(c) Individual limits
The Executive Directors and the Senior Executives pledged
Co-Invest Shares with a market value equal to 2.5 times their
annual salary. Other senior colleagues who elected to participate
in the CIP pledged Co-Invest Shares with a market value equal to a
limit specified by the Remuneration Committee, but not exceeding 1
times their annual salary.
(d) Performance, vesting and performance adjustment
The Matching Awards granted on 17 March 2014 vested subject to
the satisfaction of the performance conditions outlined below. To
the extent that any future awards are granted, different conditions
may apply (in the absolute discretion of the Remuneration
Committee).
The performance conditions were as follows:
-- 75% of the Matching Award was subject to the CAGR in the
Company's earnings per share ('EPS') over three financial years,
namely FY15, FY16 and FY17 (together the 'Performance Period')
(which, for the avoidance of doubt, ended on 30 March 2017). If the
CAGR in the Company's EPS was 10%, then 10% of the total Matching
Award would vest. If the CAGR in the Company's EPS was 17.5% or
more, then 75% of the total Matching Award would vest. Vesting was
on a straight-line basis between these two points. For the
avoidance of doubt, if the CAGR in the EPS was less than 10% over
the Performance Period then the amount of the Matching Award which
would vest under this EPS performance condition would be nil.
-- 25% of the total Matching Award was subject to the Company's
total shareholder return ('TSR') as compared to a comparator group
made up of a selected group of retail companies over the
Performance Period. Vesting of 6.25% of the total Matching Award
would occur for median performance. Vesting of the maximum 25% of
the total Matching Award would occur for upper quartile performance
or above. Vesting would occur on a straight-line basis between
these two points. If the Company's TSR performance over the
Performance Period was below median, then the amount of the
Matching Award which would vest under this TSR performance
condition would be nil.
-- To the extent vested as to performance, Matching Awards
became exercisable in three equal amounts on the third, fourth and
fifth anniversary of 17 March 2014, but subject to continued
employment with the Group.
2 CSOP
On 25 February 2014 the Company adopted the CSOP. Part I of the
CSOP is tax approved under Schedule 4 to the Income Tax (Earnings
and Pensions) Act 2003 and provides for the grant of tax approved
options. Part II of the CSOP provides for the grant of unapproved
options.
The tax approved options under Part I of the CSOP will be
exercisable between the third and tenth anniversary of the date of
grant, subject to continued employment with the Group. These awards
will be granted with an exercise price equal to the market value of
the shares at the grant date (as agreed with HMRC).
(a) Eligibility
All colleagues, including the Executive Directors and Senior
Executives, are eligible to participate in the CSOP, at the
discretion of the Remuneration Committee.
(b) Grant of options
No options may be granted more than ten years after the adoption
of the CSOP. Options under the CSOP will not form part of a
colleague's pensionable earnings.
(c) Vesting and performance
Colleagues who receive options under the CSOP and under the PSP
in connection with Admission will be subject to the same
performance conditions described in Section 1 (d) above in respect
of both grants. Colleagues who only receive options under the CSOP
in connection with Admission will not be subject to performance
conditions.
(d) Exercise price
The price at which an option holder may acquire shares on the
exercise of an option shall be determined by the Board but shall
not be less than the greater of market value of a share at the time
of grant and its nominal value. The exercise price is therefore
fixed at grant date.
(e) Individual limits
No option may be granted to an eligible colleague under Part I
of the CSOP which would result in the aggregate exercise prices of
shares comprised in all outstanding options granted to him/her
under Part I, when aggregated with outstanding options held under
any other tax approved executive share option scheme established by
the Company, exceeding the tax approved limit (currently
GBP30,000).
In addition, (both under Part I and II of the CSOP) the
aggregate exercise price of shares comprised in options granted to
a colleague under the CSOP and the PSP in any financial year shall
not exceed 150% of his/her annual salary for that year.
For the purposes of these limits, market value will be
calculated by reference to the market value of the shares on or
prior to the relevant date of grant as determined by the Board
(following consultation with the Remuneration Committee) and
subject to HMRC approval if applicable.
Part II of the CSOP provides for the grant of unapproved
options. This enables options to be granted under the same terms as
Part I of the CSOP but without complying with the particular
requirements of the legislation applicable to tax approved CSOP
Schemes. The provisions of the CSOP that do not apply under Part II
include the GBP30,000 limit and the need to seek HMRC approval for
the scheme and subsequent amendments (as applicable).
3 PSP
On 25 February 2014 the Company adopted the PSP. Awards under
the PSP were made on 17 March 2014 and annually thereafter up until
2017 after which no further awards were granted. The awards will be
exercisable between the third and tenth anniversary of the grant
date, subject to continued employment with the Group and the
satisfaction of performance conditions. These awards were granted
at nil cost.
(a) Eligibility
Only the Executive Directors, Senior Executives and certain
other senior colleagues were selected to participate in the
PSP.
(b) Grant of awards
Awards under the PSP will not form part of a colleague's
pensionable earnings. Awards are not transferable (other than on
death) without the consent of the Remuneration Committee.
(c) Exercise price
The price at which a colleague may acquire shares on the
exercise or vesting of an award under the PSP shall be determined
by the Remuneration Committee on the date of grant, and may, if the
Remuneration Committee determines, be nil or nominal value
only.
(d) Scheme limits
The number of newly issued shares over which (or in respect of
which) awards may be granted under the PSP on any date shall be
limited so that: (i) the total number of shares issued and issuable
in respect of options or awards granted in any ten year period
under the PSP and any other discretionary share option scheme of
the Company (including the CIP, RSA and the CSOP but other than to
satisfy dividend equivalent payments) is restricted to 5% of the
Company's issued shares calculated at the relevant time; and (ii)
the total number of shares issued and issuable pursuant to options
or awards granted in any ten year period under the PSP and any
other employee share scheme operated by the Company (including the
CIP, CSOP, SAYE and RSA but other than to satisfy dividend
equivalent payments) is restricted to 10% of the Company's issued
shares calculated at the relevant time.
For the purposes of these limits, no account will be taken of
options or awards granted before, on or in connection with
Admission and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting. Shares held in treasury will be treated as
newly issued shares for the purposes of these limits (as long as
this is required by institutional investor guidelines), but (for
the avoidance of doubt) shares acquired in the market will not.
(e) Individual limits
The aggregate market value of shares comprised in awards granted
to a colleague under the PSP, RSA and the CSOP in any financial
year shall not exceed 150% of their annual salary for that
year.
For the purposes of awards granted on (or before) Admission,
market value for these purposes was calculated by reference to the
Offer Price. For the purposes of awards granted following
Admission, market value for these purposes will be calculated by
reference to the market value of the shares on the relevant date of
grant as determined by the Board (following consultation with the
Remuneration Committee) in its absolute discretion.
(f) Performance
For awards granted on, or in connection with, Admission, the
performance conditions are the same as for the CIP outlined in
Section 1(d) above.
4 SAYE
On 25 February 2014, the Company adopted the SAYE (which was
registered with and self-certified with HMRC on 4 April 2015). The
rules of the SAYE were adopted pursuant to Schedule 3 of the Income
Tax (Earnings and Pensions) Act 2003 and provide for the grant of
tax approved options. In September each year, the Company issues
invitations under the rules of the SAYE which provides eligible
colleagues with an opportunity to receive share options at a 20%
discount to the market price. The maximum monthly savings is GBP500
per month. The Executive Directors have elected to participate in
the SAYE, along with 17.2% of eligible colleagues.
The options are granted once a year, and in normal circumstances
they are not exercisable until completion of a three year savings
period, beginning on 1 December each year, and will then be
exercisable for a period of six months following completion of the
relevant savings period.
(a) Eligibility
All colleagues and full-time Directors of the Group, who have
been in continuous service for such period of time (not exceeding
five years) as may be determined by the Board prior to the relevant
date of grant of an option and who are liable to UK income tax, are
eligible to participate in the SAYE.
Participation may also be offered, at the discretion of the
Board (taking account of the recommendations of the Remuneration
Committee), to other Directors or employees who otherwise do not
satisfy all of the above criteria, although Non-Executive Directors
are not eligible to participate in the SAYE.
(b) Issue of invitations
Invitations to participate in the SAYE may be made during each
42 day period from (and including) (i) the date on which any
amendment to the SAYE is approved or adopted by the Company's
shareholders, (ii) the announcement of the Company's final or
interim results for any financial period, (iii) the occurrence of
an event which the Remuneration Committee considers to be an
non-underlying event concerning the Group or (iv) changes to the
legislation affecting tax approved SAYE option schemes coming into
effect. If any of the above periods is a 'close period' as a result
of the application of the Model Code for Securities Transactions by
Directors of Listed Companies (or as a result of the Company's
equivalent internal share dealing rules) and the Company is
prohibited from issuing invitations and/or granting options as a
result, then invitations may be made within 42 days of the end of
the close period.
Invitations may be issued by the trustee of an employee benefit
trust. No invitations may be issued or options granted more than
ten years after the adoption of the SAYE.
(c) Exercise price
The price at which an option holder may acquire shares on the
exercise of an option shall be determined by the Board but shall
not be less than the greater of 80% of the market value of a share
at the time of grant and its nominal value.
(d) Savings contract
Options may be granted by the Board or the trustee of an
employee benefit trust. Upon applying for an option, the colleague
will be required to enter into an approved savings contract with a
savings institution nominated by the Company which lasts for three
years. The maximum amount which an employee is permitted to
contribute under SAYE contracts is GBP500 per month. The Board may
set lower savings limits than this for different colleagues by
reference to objective criteria such as levels of salary or length
of service. The minimum contribution is GBP5 per month (or such
greater amount as the Board may specify, not to exceed GBP10). The
total exercise price of the shares over which the option is granted
may not exceed the aggregate of the monthly contributions and bonus
payable at the end of the colleague's related SAYE contract.
(e) Scheme limits
The number of newly issued shares over which (or in respect of
which) options may be granted under the SAYE on any date of grant
shall be limited so that the total number of shares issued or
capable of being issued in any ten year period under all the
Company's employee share schemes (including the CIP, CSOP, PSP and
RSA but other than to satisfy dividend equivalent payments) is
restricted to 10% of the Company's issued shares calculated at the
relevant time. Any options or rights to acquire shares granted
before, on or in connection with Admission will be excluded from
this limit, and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting.
(f) Exercisability
Options will normally be exercisable during a period of six
months following the allocation of a bonus under the related SAYE
contract and will normally lapse upon cessation of employment.
Earlier exercise is, however, permitted if the colleague dies or
leaves employment through injury, disability, redundancy or
retirement or where a colleague leaves employment of the Group by
reason of his employing company ceasing to be a member of the
Group, or if the undertaking in which he is employed is sold
outside the Group. Early exercise will also be permitted in the
event of a takeover, reconstructions or voluntary winding up of the
Company.
5 RSA
On 20 July 2017 the Company adopted the RSA. Awards under the
RSA were made on 20 July 2017 and annually thereafter and will be
exercisable between the third and tenth anniversary of this date,
subject to continued employment with the Group and the satisfaction
of performance conditions. These awards are granted at nil
cost.
(a) Eligibility
All colleagues, including the Executive Directors and Senior
Executives, are eligible to participate in the RSA, at the
discretion of the Remuneration Committee.
(b) Grant of awards
Awards under the RSA will not form part of a colleague's
pensionable earnings. Awards are not transferable (other than on
death) without the consent of the Remuneration Committee.
(c) Exercise price
The price at which a colleague may acquire shares on the
exercise or vesting of an award under the RSA shall be determined
by the Remuneration Committee on the date of grant, and may, if the
Remuneration Committee determines, be nil or nominal value
only.
(d) Scheme limits
The number of newly issued shares over which (or in respect of
which) awards may be granted under the RSA on any date shall be
limited so that: (i) the total number of shares issued and issuable
in respect of options or awards granted in any ten year period
under the RSA and any other discretionary share option scheme of
the Company (including the CIP, PSP and the CSOP but other than to
satisfy dividend equivalent payments) is restricted to 5% of the
Company's issued shares calculated at the relevant time; and (ii)
the total number of shares issued and issuable pursuant to options
or awards granted in any ten year period under the RSA and any
other employee share scheme operated by the Company (including the
CIP, CSOP, SAYE and PSP but other than to satisfy dividend
equivalent payments) is restricted to 10% of the Company's issued
shares calculated at the relevant time.
For the purposes of these limits, no account will be taken of
options or awards granted before, on or in connection with
Admission and no account will be taken of options or awards which
have lapsed, been surrendered or otherwise become incapable of
exercise or vesting. Shares held in treasury will be treated as
newly issued shares for the purposes of these limits (as long as
this is required by institutional investor guidelines), but (for
the avoidance of doubt) shares acquired in the market will not.
(e) Individual limits
The aggregate market value of shares comprised in awards granted
to a colleague under the RSA, PSP and the CSOP in any financial
year shall not exceed 150% of their annual salary for that year.
Market value for these purposes will be calculated by reference to
the market value of the shares on the relevant date of grant as
determined by the Board (following consultation with the
Remuneration Committee) in its absolute discretion.
Fair value of share awards
The expected volatility is based on historical volatility of a
peer group of companies over a relevant period prior to award. The
expected life is the average expected period to exercise, which has
been taken as three years. The risk free rate of return is the
yield on zero-coupon UK government bonds with a life equal to this
expected life.
Options are valued using a Black-Scholes option-pricing model
for the non-market based (EPS element) performance conditions and a
Monte-Carlo simulation for the market-based (TSR element)
performance conditions.
Special provisions allow early exercise in the case of death,
injury, disability, redundancy, retirement or because the Company
which employs the option holder ceases to be part of the Group or
in the event of a change in control, reconstruction or winding up
of the Company.
The key assumptions used in the fair value of the awards were as
follows:
RSA CIP PSP
2020 2019 2018 2015 2017 2016 2015
At grant date
Share price GBP2.28 GBP1.87 GBP1.37 GBP2.45 GBP2.59 GBP2.75 GBP2.45
Exercise price GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00 GBP0.00
Expected volatility 32% 32% 32% 30% 32% 30% 30%
Option life (years) 10 10 10 3 10 10 10
Expected dividend yield 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Risk free interest rate n/a n/a n/a n/a 0.50% 1.07% 1.07%
Weighted average fair value GBP2.28 GBP1.87 GBP1.37 GBP2.06 GBP2.06 GBP2.06 GBP2.06
of options granted
CSOP SAYE
2017 2016 2015 2020 2019 2018
At grant date
Share price GBP2.59 GBP2.75 GBP2.31 GBP2.87 GBP2.37 GBP1.17
Exercise price GBP2.59 GBP2.75 GBP2.31 GBP2.29 GBP1.98 GBP0.94
Expected volatility 32% 32% 37% 32% 32% 32%
Option life (years) 10 10 10 3 3 3
Expected dividend yield 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Risk free interest
rate 0.50% 2.25% 2.25% 0.20% 0.20% 0.20%
Weighted average fair GBP0.65 GBP0.89 GBP0.75 GBP0.95 GBP0.78 GBP0.39
value of options granted
As both the RSA and PSP awards have a nil exercise price the
risk free rate of return does not have any effect on the estimated
fair value.
Movements in awards under share based payment schemes:
CIP PSP CSOP SAYE RSA Total
000 000 000 000 000 000
Outstanding at
start of year 51 8 2,196 5,001 7,300 14,556
Granted - - - 2,069 2,264 4,333
Forfeited (47) - (129) (419) (860) (1,455)
Exercised - (6) (1,025) (526) (1,596) (3,153)
Lapsed (4) - - (111) (11) (126)
Outstanding at
end of year - 2 1,042 6,014 7,097 14,155
Weighted average
exercise price - - 2.44 1.47 - NA
The Group income statement charge recognised in respect of share
based payments for the 52 week period ended 25 March 2021 is
GBP4.7m (52 week period ended 26 March 2020: GBP4.2m).
25 Commitments
Capital commitments
At 25 March 2021, the Group is committed to incur capital
expenditure of GBP6.1m (26 March 2020: GBP3.7m). Capital
commitments predominantly relate to the cost of investment in new
IT systems and refurbishment of Pets at Home stores.
At 25 March 2021, the Group has a commitment to increase the
loan funding to Joint Venture companies of GBP0.8m (26 March 2020:
GBP0.8m), this increase in funding is written into the Joint
Venture agreements and becomes payable when certain criteria are
met.
26 Contingencies
Veterinary practices
Provisions are maintained by the Group, where necessary, against
certain balances held with the veterinary practices. During the
period, the Group also had in place certain guarantees over the
bank loans taken out by a number of veterinary practice companies
in which it holds an investment in non-participatory share capital.
At the end of the period, the total amount of bank overdrafts and
loans guaranteed by the Group amounted to GBP12.8m (26 March 2020:
GBP10.9m).
The Group is a guarantor for the lease for veterinary practices
that are not located within Pets at Home stores. The Group is also
a guarantor to a small number of third parties where the lease has
been reassigned.
Exemption from audit by parent guarantee
The following wholly owned subsidiaries of the Company are
covered by a guarantee provided by Pets at Home Group Plc and are
consequently entitled to an exemption under s479A from the
requirement of the Act relating to the audit of individual
accounts. Under this guarantee, the Group will guarantee all
outstanding liabilities of these entities. No liability is expected
to arise under the guarantee. The entities covered by this
guarantee are disclosed below.
Company Registered number
Aberdeen Vets4Pets Limited 09393267
Aberdeen North Vets4Pets
Limited 11024679
Alton Vets4Pets Limited 09639868
Andover Vets4Pets Limited 08132407
Companion Care (Ballymena)
Limited 08294444
Bearsden Vets4Pets Limited 07780175
Bedminster Vets4Pets Limited 09267870
Belfast Stormont Vets4Pets
Limited 09022077
Bicester Vets4Pets Limited 10285804
Blackpool Squires Gate Vets4Pets
Limited 09578581
Bonnyrigg Vets4Pets Limited 10757330
Borehamwood Vets4Pets Limited 09319066
Bourne Vets4Pets Limited 10200670
Bracknell Vets4Pets Limited 10605544
Bramley Vets4Pets Limited 04238788
Carmarthen Vets4Pets Limited 09498169
Clitheroe Vets4Pets Limited 09878308
Corby Vets4Pets Limited 08163294
Craigavon Vets4Pets Limited 08846831
Davidsons Mains Vets4Pets
Limited 07726992
Doncaster Vets4Pets Limited 04335358
Dorchester Vets4Pets Limited 08708025
East Kilbride Vets4Pets Limited 09628917
Ellesmere Port Vets4Pets
Limited 09725644
Evesham Vets4Pets Limited 09269582
Companion Care (Exeter) Limited 04930076
Companion Care (Exeter Marsh)
Limited 08314727
Companion Care (Farnborough)
Limited 07673889
Grantham Vets4Pets Limited 08361049
Haverfordwest Vets4Pets Limited 09485504
Inverurie Vets4Pets Limited 11056047
Kilmarnock Vets4Pets Limited 08850288
Companion Care (Kirkcaldy)
Limited 07680864
Leeds Kirkstall Vets4Pets
Limited 10291543
Leicester St Georges Vets4Pets
Limited 09881176
Linlithgow Vets4Pets Limited 09966547
Liverpool OS Vets4Pets Limited 06959208
Companion Care (Speke) Limited 07149744
Companion Care (Macclesfield)
Limited 08285995
Company Registered number
Companion Care (Maidstone)
Limited 05094399
Maidstone Vets4Pets Limited 05171954
Malvern Vets4Pets Limited 10516552
Market Harborough Vets4Pets
Limited 10602806
Marlborough Vets4Pets Limited 09869384
Monmouth Vets4Pets Limited 10756991
Musselburgh Vets4Pets Limited 10425760
Companion Care (Newport)
Limited 08425358
Newton Mearns Vets4Pets Limited 07957431
Pentland Vets4Pets Limited 09360949
Prescot Vets4Pets Limited 08878815
Redditch Vets4Pets Limited 05612150
Sheffield Drakehouse Vets4Pets
Limited 08790953
Sheldon Vets4Pets Limited 08822150
Sidcup Vets4Pets Limited 08187232
Companion Care (Slough) Limited 07427613
St Neots Vets4Pets Limited 09811640
Companion Care (Stevenage)
Limited 08282080
Companion Care (Stratford-upon-Avon)
Limited 07329166
Sudbury Vets4Pets Limited 09916308
Sydenham Vets4Pets Limited 08802574
Thamesmead Vets4Pets Limited 09881179
Tiverton Vets4Pets Limited 11023079
Uttoxeter Vets4Pets Limited 11145982
Wallasey Bidston Moss Vets4Pets
Limited 09190138
Wellingborough Vets4Pets
Limited 07620413
Wokingham Vets4Pets Limited 09869355
Wrexham Vets4Pets Limited 07103838
Companion Care Management
Services Limited 08878037
Pet Investments Limited 04428715
Vets4Pets (Services) Limited 04317414
Vets4Pets Services Limited 05055601
Vets4Pets UK Limited 03940967
Vets4Pets Veterinary Group
Limited 04263054
27 Related parties
Joint Venture veterinary practice transactions
The Group has entered into a number of arrangements with third
parties in respect of veterinary practices. These veterinary
practices are deemed to be related parties due to the factors
explained in note 1.4.
Financial commitments provided to related party veterinary
practices for funding are set out in note 25.
During the period, the Group had in place certain guarantees
over the bank loans taken out by a number of veterinary practice
companies in which it holds an investment in non-participatory
share capital. At the end of the period, the total amount of bank
overdrafts and loans guaranteed by the Group amounted to GBP12.8m
(26 March 2020: GBP10.9m).
The transactions entered into during the period and the balances
outstanding at the end of the period are as follows:
25 March 26 March
2021 GBPm 2020 GBPm
----------------------------------------------------------- ---------- ----------
Transactions
- Fees for services provided to Joint Venture veterinary
practices 57.0 54.7
- Rental and other occupancy charges to Joint Venture
veterinary practices 8.2 12.2
---------- ----------
Total income from Joint Venture veterinary practices 65.2 66.9
Acquisitions
- Consideration for Joint Venture veterinary practices
acquired (note 10) 1.6 1.3
Balances
Included within trade and other receivables (note 17):
- Funding for new practices 0.3 1.6
- Operating loans
- Gross value of operating loans 26.7 37.5
- Allowance for expected credit losses held for operating
loans (6.2) (8.0)
---------- ----------
- Net operating loans 20.5 29.5
Included within other financial assets and liabilities
(note 16):
- Loans to Joint Venture veterinary practices - initial
set up loans
- Gross value of initial set up loans 12.5 13.3
- Allowance for expected credit losses held for initial
set up loans (1.2) -
---------- ----------
- Net initial set up loans 11.3 13.3
- Loans to other related parties - other loans
- Gross value of other loans 3.3 4.0
- Allowance for expected credit losses held for other
loans - -
---------- ----------
- Net other loans 3.3 4.0
Included within trade and other payables (note 20):
- Trading balances (17.6) (6.7)
Total amounts receivable from veterinary practices (before
provisions) 25.2 49.7
Fees for services provided to related party veterinary practices
are included within revenue and relate to charges for support
services offered in such areas as clinical development, promotion
and methods of operation as well as service activities including
accountancy, legal and property. In accordance with IFRS 15,
revenue in the 52 week period ended 25 March 2021 and the 52 week
period ended 26 March 2020 excludes irrecoverable fee income from
Joint Venture veterinary practices.
Funding for new practices represents the amounts advanced by the
Group to support veterinary practice opening costs. The funding is
short term and the related party Joint Venture veterinary practice
draws down their own bank funding to settle these amounts
outstanding with the Group shortly after opening.
Trading balances represent costs incurred and income received by
the Group in relation to the services provided to the Joint Venture
veterinary practices that have yet to be recharged.
Operating loans represent amounts advanced to related party
Joint Venture veterinary practices to support their working capital
requirements and longer term growth. The loans advanced to the
practices are interest free and either repayable on demand or
repayable within 90 days of demand. No facility exists and the
levels of loans are monitored in relation to review of the
practices performance against business plan. Based on the projected
cash flow forecast on a practice by practice basis, the funding is
often expected to be required for a number of years. As practices
generate cash on a monthly basis it is applied to the repayment of
brought forward operating loans. For immature practices, loan
balances may increase due to operating requirements. The balances
above are shown net of allowances for expected credit losses held
for operating loans of GBP6.2m (26 March 2020: GBP8.0m).
Loans to Joint Venture veterinary practices are provided to
Joint Venture veterinary practice companies trading under the
Companion Care and Vets4Pets brands, in which the Group's share
interest is non-participatory. These loans represent a long term
investment in the Joint Venture, supporting their initial set up
and working capital, and are held at amortised cost under IFRS 9.
The balances above are shown net of allowances for expected credit
losses held for operating loans of GBP1.2m (26 March 2020:
GBPnil).
In the 52 week period ended 25 March 2021, the value of loans
written off recognised in the income statement amounted to GBP1.4m
which relates to operating loans. In the 52 week period ended 26
March 2020 the value of loans written off recognised in the income
statement amounted to GBP9.0m, which relates to operating loans
GBP7.2m, initial set up loans GBP1.1m and other loans GBP0.7m.
At 25 March 2021, the Group had a commitment to increase the
loan funding to Joint Venture companies of GBP0.8m (26 March 2020:
GBP0.8m); this increase in funding is written into the Joint
Venture agreements and becomes payable when certain criteria are
met.
The Group is a guarantor for the lease for veterinary practices
that are not located within Pets at Home stores.
Key management personnel
Details of remuneration paid to key management personnel are set
out in note 4.
28 Investments in subsidiaries
Company
Investments
in subsidiaries
GBPm
----------------
At 26 March 2021 and 25 March 2021 936.2
----------------
Impairment testing
Management have conducted a full impairment review which has
been undertaken on the Group's cash generating units of which the
Company's investments form part. The results of this review are
disclosed in note 13, including a sensitivity analysis. In this
review, the goodwill on consolidation balance of GBP958.4m at 25
March 2021 exceeds the investments held in subsidiary undertakings
of GBP936.2m, and therefore management have concluded that under
IAS 36, no impairment has been identified with regard to the
Company's investments in subsidiaries.
Registered office address
Pets at Home (Asia) Limited: Units 704 5A, 7/F, Tower B,
Manulife Financial Centre, 223-231 Wai Yip Street, Kwun Tong,
Kowloon, Hong Kong
PAH Pty Limited: Herbert Greer and Rundle, Level 21, 385 Bourke
Street, Melbourne, VIC 3000, Australia
Pure Pet Food Limited: Unit 6, Brookmills, Saddleworth Road,
Greetland, Halifax, West Yorkshire, England, HX4 8LZ
Dog Stay Limited: 305 Regents Park Road, Finchley, London,
England, N3 1DP
VetsDirect Limited: Dickson Minto, 16 Charlotte Square,
Edinburgh, Scotland, EH2 4DF
The registered office of all the remaining companies in which
the Group has an interest in the share capital is Epsom Avenue,
Stanley Green, Handforth, Cheshire, Englad SK9 3RN.
Group
Details of the subsidiary undertakings are as follows:
In the 52 week period ended 25 March 2021, the Group has
acquired 100% of the share capital in Pet Advisory Services Limited
and its subsidiary VetsDirect Limited.
In the 52 week period ended 25 March 2021, the Group has also
acquired 100% of the 'A' shares of 6 companies. These practices
were previously accounted for as Joint Venture veterinary practices
as the Group held 100% of the non-participatory 'B' ordinary
shares. Acquisition of the 'A' shares has led to the control and
consolidation of these companies. A detailed explanation for the
basis of consolidation can be found in note 1.
Further details of these acquisitions can be found in note
10.
Class of
Country shares At 25 March At 26 March
Company Holding of incorporation held 2021 % 2020 %
--------- -----------
Dick White Referrals Limited Indirect United Kingdom Ordinary - 91
Eye-Vet Limited Indirect United Kingdom Ordinary - 100
Anderson Moores Veterinary Specialists
Ltd Indirect United Kingdom Ordinary - 100
Brand Development Limited Indirect Guernsey Ordinary 100 100
Companion Care (Services) Limited Indirect United Kingdom Ordinary 100 100
Companion Care Management Services
Limited Indirect United Kingdom Ordinary 100 100
Les Boues Limited Indirect Jersey Ordinary 100 100
Northwest Veterinary Specialists
Limited Indirect United Kingdom Ordinary - 100
PAH Pty Limited Indirect Australia Ordinary 100 100
Pet Advisory Services Limited Indirect United Kingdom Ordinary 100 -
Pet Investments Limited Indirect United Kingdom Ordinary 100 100
Pets at Home (Asia) Limited Indirect Hong Kong Ordinary 100 100
PAH Financial Services Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Holdings Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Limited Indirect United Kingdom Ordinary 100 100
Pets at Home No.1 Limited Direct United Kingdom Ordinary 100 100
Pets at Home Superstores Limited Indirect United Kingdom Ordinary 100 100
Pets at Home Veterinary Specialist
Group Limited Indirect United Kingdom Ordinary - 100
Pets at Home Vets Group Limited Indirect United Kingdom Ordinary 100 100
Pets at Home (ESOT) Limited Indirect United Kingdom Ordinary 100 100
Pet City Holdings Limited Indirect United Kingdom Ordinary 100 100
Pet City Limited Indirect United Kingdom Ordinary 100 100
Pet City Resources Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets (Services) Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets Holdings Limited Indirect Guernsey Ordinary 100 100
Vets4Pets I.P. Limited Indirect Guernsey Ordinary 100 100
Vets4Pets Services Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets UK Limited Indirect United Kingdom Ordinary 100 100
Vets4Pets Limited Indirect Guernsey Ordinary 100 100
Vets4Pets Veterinary Group Limited Indirect United Kingdom Ordinary 100 100
VetsDirect Limited Indirect United Kingdom Ordinary 100 -
Veterinary Specialists (Scotland)
Limited Indirect United Kingdom Ordinary - 94
Aberdeen North Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Aberdeen Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Addlestone Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Alton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Andover Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Aylesbury Berryfields Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bearsden Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bedminster Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Belfast Stormont Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bicester Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bishop Auckland Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Blackpool Squires Gate Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Bodmin Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bolton Central Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bonnyrigg Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Borehamwood Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bourne Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bradford Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bramley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bramley Vets4Pets (Newco) Limited Indirect United Kingdom Ordinary 100 100
Bridlington Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Bromborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Cambridge Perne Road Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Canvey Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Carmarthen Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Chorley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Clitheroe Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Coalville Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Colchester Layer Road Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Ballymena) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Exeter Marsh)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Exeter) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Farnborough)
Limited Indirect United Kingdom Ordinary 100 50
Companion Care (Kendal) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Kirkcaldy) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Macclesfield)
Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Maidstone) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Newport) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Nottingham) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Slough) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Speke) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Stevenage) Limited Indirect United Kingdom Ordinary 100 100
Companion Care (Stratford-Upon-Avon)
Limited Indirect United Kingdom Ordinary 100 100
Corby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Coventry Canley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Craigavon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Crosby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Cumbernauld Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Davidsons Mains Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Doncaster Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Dorchester Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Dundee Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
East Grinstead Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
East Kilbride South Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Ellesmere Port Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Evesham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Gillingham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Grantham Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Great Yarmouth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Haverfordwest Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Heanor Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Hemsworth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Hexham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Horden Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Inverness Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Inverurie Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Kilmarnock Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Kingswood Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Leamington Spa Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Leeds Kirkstall Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Leicester St Georges Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Leven Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Linlithgow Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Littleover Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Liverpool OS Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Long Eaton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Maidstone Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Malvern Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Market Harborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Marlborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Melton Mowbray Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Mexborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Milton Keynes Broughton Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Monmouth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Musselburgh Vet4sPets Limited Indirect United Kingdom Ordinary 100 100
Newark Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newhaven Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Newton Mearns Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Norwich Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Nottingham Castle Marina Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Pentland Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Perth Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Peterlee Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Poynton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Prescot Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Rawtenstall Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Redditch Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Ripon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Salford Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Scunthorpe Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Selby Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sheffield Drakehouse Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Sheffield Heeley Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sheldon Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Shepton Mallet Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sidcup Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
St Austell Vets4Pets Limited Indirect United Kingdom Ordinary 95 95
St Neots Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Stocksbridge Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Stoke-On-Trent Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sudbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Sydenham Vets4Pets Limited Indirect United Kingdom Ordinary 100 50
Teesside Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Thamesmead Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
The Heart of Dulwich Veterinary
Care Limited Indirect United Kingdom Ordinary 100 100
Thornbury Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Tiverton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Uckfield Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Uttoxeter Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wallasey Bidston Moss Vets4Pets
Limited Indirect United Kingdom Ordinary 100 50
Warrington Winnick Vets4Pets
Limited Indirect United Kingdom Ordinary 100 100
Wellingborough Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
West Drayton Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wokingham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
Wrexham Vets4Pets Limited Indirect United Kingdom Ordinary 100 100
--------- -----------
Investments in Joint Venture practices and other investments
The Group holds an indirect interest in the share capital of the
following companies:
Class of
Country shares At 25 March At 26 March
Company Holding of incorporation held 2021 % 2020 %
---------- ----------- -----------
Abingdon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
ABTW Limited Indirect United Kingdom Ordinary 50 50
Accrington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Airdrie Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Alsager Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Altrincham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Amesbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bagshot Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bangor Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bangor Wales Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnsley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnstaple Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Barnwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Barry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bedford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bedlington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Beeston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Beverley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Biggleswade Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bishops Stortford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bishopston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bitterne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackburn Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackheath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Blackpool Warbreck Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Blackwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bolton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bracknell Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Bradford Idle Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Brighouse Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bristol Emerson Green Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bristol Imperial Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bristol Kingswood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bristol Longwell Green Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Bromsgrove Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Buckingham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bulwell Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Burscough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Burton-On-Trent Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bury St Edmunds Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Bury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Byfleet Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Caerphilly Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Camborne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cannock Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Canterbury Sturry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cardiff Ely Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cardiff Newport Road Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Carlisle Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Carrickfergus Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Castleford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Catterick Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cc (Rustington) Newco Limited Indirect United Kingdom Ordinary 50 50
Chadwell Heath Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cheadle Hulme Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chester Caldy Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chester Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Chesterfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cirencester Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clevedon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cleveleys Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clifton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Clowne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Colne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Aintree) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Andover) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ashford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ashton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Aylesbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ayr) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Banbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Barnsley Cortonwood)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basildon Pipps
Hill) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basildon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Basingstoke)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Beckton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bedford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Belfast) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bishopbriggs)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bletchley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bolton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bournemouth)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Braintree) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Brentford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bridgend) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bridgwater) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Brislington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Bristol Filton)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Broadstairs)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Burgess Hill)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cambridge Beehive)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cambridge) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cannock) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Canterbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cardiff) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Charlton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chatham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chelmsford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cheltenham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chesterfield)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chichester) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chingford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Chippenham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Christchurch)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Colchester) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Corstorphine)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Coventry Walsgrave)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Cramlington)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Crawley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Crayford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Croydon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Derby Kingsway)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Derby) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Dunstable) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Eastbourne) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ely) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Enfield) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Falmouth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fareham Collingwood)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fareham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Farnham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Folkestone) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Fort Kinnaird)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Friern Barnet)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Gloucester) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Harlow) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hatfield) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hemel Hempstead)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (High Wycombe)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Hove) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Huddersfield)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Huntingdon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ilford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Ipswich Martlesham)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Keighley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Kidderminster)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Kings Lynn) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leicester Beaumont
Leys) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leicester Fosse
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Leighton Buzzard)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Linwood) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Lisburn) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Liverpool Penny
Lane) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Livingston) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Llantrisant)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Merry Hill) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Milton Keynes)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (New Malden) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Newbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Newcastle Kingston
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Northampton Nene
Valley) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich Hall
Road) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich Longwater)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Norwich) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oldbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oldham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Orpington) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Oxford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Perth) Limited Indirect United Kingdom Ordinary 50 100
Companion Care (Peterborough
Bretton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Peterborough)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Plymouth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Poole) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Portsmouth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Preston Capitol)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Pudsey) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Reading) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Redditch) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Redhill) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Romford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Rotherham) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Rustington) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Salisbury) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Scarborough)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Southampton)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Southend-On-Sea)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stirling) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stockport) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Stoke Festival
Park) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Swansea) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Swindon) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Tamworth) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Taunton) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Telford) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Truro) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Tunbridge Wells)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Wakefield) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Weston-Super-Mare)
Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Winchester) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Winnersh) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Woking) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Woolwell) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Worcester) Limited Indirect United Kingdom Ordinary 50 50
Companion Care (Wrexham Holt
Road) Limited Indirect United Kingdom Ordinary 50 50
Craigleith Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Crescent Link Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Crewe Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Cross Hands Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dagenham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Darlington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Daventry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Denbigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Denton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dewsbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dog Stay Limited Indirect United Kingdom Ordinary 12 12
Dover Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Droitwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Drumchapel Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dudley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dumbarton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Dunfermline Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Durham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
East Kilbride Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eastleigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eastwood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Eccleshill Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Epsom Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Falkirk Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Feltham Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Filton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gamston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gateshead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Glasgow Forge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Glasgow Pollokshaws Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Goldenhill Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gosport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Gravesend Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Greasby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Greenford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Grimsby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Guernsey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Halesowen Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Halifax Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hamilton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Harrogate New Park Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Harrogate Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hartlepool Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hastings Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Havant Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Haverhill Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hayling Island Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hedge End Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hemel Hempstead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hendon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hereford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hertford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
High Wycombe Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hinckley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hucknall Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Huddersfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Anlaby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Stoneferry Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Hull Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ilkeston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ipswich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Irvine Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kendal Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kettering Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kidderminster Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Kirkby in Ashfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Lancaster Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Larne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Launceston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Birstall Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Colton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leeds Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leigh-On-Sea Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Letchworth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Leyland Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lichfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lincoln South Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lisburn Longstone Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Llandudno Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Llanelli Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Llanrumney Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Longton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Loughborough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Loughton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Luton Gipsy Lane Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Luton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Lytham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Maidenhead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Maldon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Mansfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Mapperley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Merthyr Tydfil Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middlesbrough Cleveland Park
Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middlesbrough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Middleton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Millhouses Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Morpeth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
New Milton Vets4pets Limited Indirect United Kingdom Ordinary 50 50
Newcastle-Upon-Tyne Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Newmarket Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newton Abbot Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newtownabbey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Newtownards Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
North Tyneside Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Northallerton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Northampton Riverside Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Northampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Northwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Nottingham Chilwell Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Nottingham Netherfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Nuneaton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Oadby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Old Kent Road Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Oxford Cowley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Paisley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Penrith Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Penzance Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Peterborough Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Pontypridd Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Poole Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Portishead Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Portsmouth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Prenton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Preston Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Prestwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Pure Pet Food Ltd Indirect United Kingdom Ordinary 12 19
Quinton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rayleigh Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rhyl Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Richmond Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rochdale Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rotherham Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rugby Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rugby Central Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Ruislip Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Runcorn Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Rushden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Saffron Walden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Selly Oak Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sevenoaks Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sheffield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sheffield Wadsley Bridge Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Shelfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Shrewsbury Meole Brace Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Shrewsbury Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sittingbourne Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Solihull Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Somercotes Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
South Shields Quays Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
South Shields Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southend Airport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southend-On-Sea Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Southport Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
St Albans Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
St Helens Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stafford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stechford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stockton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Stourbridge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Street Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sunderland South Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sunderland Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sutton Coldfield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Sutton In Ashfield Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Swindon Bridgemead Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Swinton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Telford Madeley Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Thurrock Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Tilehurst Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Torquay Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Totton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Trafford Park Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Trowbridge Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wakefield Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walkden Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walsall Reedswood Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Waltham Abbey Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walton on Thames Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Walton Vale Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Warminster Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Warrington Riverside Vets4Pets
Limited Indirect United Kingdom Ordinary 50 50
Warrington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Washington Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Waterlooville Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Watford Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
West Bromwich Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Weymouth Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Whitstable Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
Widnes Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wigan Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wimbledon Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Wolverhampton Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Worksop Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Worthing Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
WSM Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Yate Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
Yeovil Vets4Pets Limited Indirect United Kingdom Ordinary 50 100
York Clifton Moor Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
York Vets4Pets Limited Indirect United Kingdom Ordinary 50 50
---------- ----------- -----------
During the 52 week period ended 25 March 2021, the Group has
sold 100% of the 'A' shares in a number of companies which were
previously classified as subsidiaries, and subsequent to sale of
the 'A' shares, have been accounted for as Joint Venture veterinary
practices, which has led to the reduction in the holding in 7
entities listed above to 50% investment.
Glossary - Alternative Performance Measures
Guidelines on Alternative Performance Measures (APMs) issued by
the European Securities and Markets Authority came into effect for
all communications released on or after 3 July 2016 for issuers of
securities on a regulated market.
In the reporting of financial information, the Directors have
adopted various APMs of historical or future financial performance,
position or cash flows other than those defined or specified under
International Financial Reporting Standards (IFRS).
The Directors measure the performance of the Group based on the
following financial measures which are not recognised under
EU-adopted IFRS, and consider these to be important measures in
evaluating the Group's strategic and financial performance. The
Directors believe that these APMs assist in providing additional
useful information on the underlying trends, performance and
position of the Group.
APMs are also used to enhance the comparability of information
between reporting periods by adjusting for non-underlying items, to
aid the user in understanding the Group's performance.
Consequently, APMs are used by the Directors and management for
performance analysis, planning, reporting and incentive setting
purposes and have remained consistent with the prior year.
All APMs relate to the current period's results and comparative
periods where provided. Where the current APM has been amended to
exclude the impact of transition to IFRS 16, this has been set out
in the definition below.
APMs considered by the business to be a key performance
indicator are explained in more detail on page 13 of the Annual
Report.
The key APMs used by the Group are:
'Like-for-Like' sales growth comprises total revenue in a
financial period compared to revenue achieved in a prior period for
stores, online operations, grooming salons, veterinary practices
and Specialist Referral Centres that have been trading for 52 weeks
or more, excluding fee income from Joint Venture veterinary
practices where the Group has bought out the Joint Venture Partners
or will offer to buy out the Joint Venture Partners in the
future
Omnichannel revenue: Revenue net of discounts and VAT from core
online sales, subscriptions and order to store
Underlying EBITDA: Earnings before interest, tax, depreciation
and amortisation before the effect of non-underlying items in the
period
Underlying free cash flow: Net cash from operating activities,
after tax, less net cash used in investing activities (excluding
acquisitions), less interest paid and debt issue costs before the
effect of non-underlying items in the period
Underlying CROIC: Cash return on invested capital, represents
cash returns divided by the average of gross capital invested (GCI)
for the last 12 months. Cash returns represent underlying operating
profit before property rentals and share based payments subject to
tax, then adjusted for depreciation and amortisation. GCI
represents gross property, plant and equipment, plus software and
other intangibles excluding the goodwill created on the acquisition
of the Group by KKR (GBP906,445,000) plus net working capital, plus
capitalised rent multiplied by a factor of 8x, before the effect of
non-underlying items in the period
Non-underlying items: Certain costs or incomes that derive from
events or transactions that fall outside the normal activities of
the Group, and are excluded by virtue of their size and nature in
order to reflect management's view of the performance of the
Group
References to Underlying GAAP measures and Underlying APMs
throughout the financial statements are measured before the effect
of non-underlying items.
APM Definition Reconciliation
Cash EBITDA Underlying EBITDA (see Cash EBITDA (GBPm) FY21 FY20 Note
below) Underlying EBITDA 216.7 220.7 2
adjusted for share based Share based payment
payment charges. charge 4.7 4.2 3
----
Cash EBITDA 221.4 224.9
----
Underlying Earnings before interest, Underlying EBITDA
EBITDA tax, depreciation and (GBPm) FY21 FY20 Note
amortisation Statutory operating
before the effect of profit 134.8 103.7 2
non-underlying Depreciation on tangible
items in the period. fixed assets 26.9 28.3 3
Amortisation of intangible
assets 13.6 10.0 3
Non-underlying items (28.9) 7.6 3
----
Underlying EBITDA
before IFRS 16 146.4 149.6
Depreciation on right-of-use
assets 70.3 71.1 3
Underlying EBITDA 216.7 220.7
Underlying Cash return on invested CROIC FY21 FY20 Note
CROIC capital, represents cash Cash returns:
returns divided by the Underlying operating
average profit 105.9 111.3 2
of gross capital invested Share based payment
(GCI) for the last 12 charges 4.7 4.2 3
months. 110.6 115.5
Cash returns represent Effective tax rate 19% 20%
underlying Tax charge on above (21.0) (23.1)
operating profit before 89.6 92.4
share based payments Depreciation and amortisation 110.8 109.4 2
subject Cash returns 200.4 201.8
to tax, and then adjusted
for depreciation on Gross capital invested
property, (GCI):
plant and equipment, Gross property, plant
depreciation and equipment 310.1 306.2 11
on right-of-use assets and Gross right-of-use
amortisation on intangible assets 508.2 497.9 12
assets. GCI represents Intangibles 1,053.4 1,046.3 13
gross Less KKR goodwill (906.5) (906.5)
property, plant and Investments 12.6 14.8 16
equipment Net working capital (87.3) (91.1) see definition
and right-of-use assets, GCI 890.5 867.6
plus software and other Underlying CROIC 22.5% 23.3%
intangibles excluding the
goodwill created on the
acquisition of the Group
by KKR (GBP906,445,000)
plus net working capital.
Underlying Net cash from operating Underlying free cash
free activities, after tax, less flow (GBPm) FY21 FY20 Note
cash flow net cash used in investing Underlying free cash
activities (excluding flow 67.4 89.6
acquisitions), Non-underlying working
less interest paid and debt capital - 1.2
issue costs before the ----
effect Free cash flow 67.4 90.8
of non-underlying items Underlying cash flow
in the period. Dividends (37.1) (37.1) CFS
Investments - (1.0) CFS
Acquisition of subsidiary (16.9) (0.5) CFS
Proceeds from new
loan - 61.0 CFS
Repayment of borrowings (65.0) (77.0) CFS
Non-underlying cash
flow
Proceeds from sale
of PPE - 0.4 CFS
Proceeds from sale
of PPE relating to
GVs - (0.3)
Payment of deferred
consideration - - CFS
Settlement of put
& call (5.5) (6.4) CFS
Acquisition of subsidiary - (0.5) CFS
Costs associated with
acquisitions - (3.7) CFS
Repayment of borrowings
on acquisition - (5.9) CFS
Non-underlying working
capital - (1.2) CFS
Disposal of subsidiaries 79.4 - CFS
----
Net increase in cash 22.3 18.6
CFS = Consolidated
statement of cash
flows
----
Like-for-like 'Like-for-like' sales Not applicable.
growth
comprises total revenue
in a financial period
compared
to revenue achieved in a
prior period for stores,
online operations, grooming
salons, veterinary
practices
and Specialist Referral
Centres that have been
trading
for 52 weeks or more,
excluding
fee income from Joint
Venture
veterinary practices where
the Group has bought out
the Joint Venture Partners
or will offer to buy out
the Joint Venture Partners
in the future.
2-year like-for-like 2 year 'like-for-like' Not applicable.
sales
growth comprises total
revenue
in a financial period
compared
to revenue achieved in a
prior period for stores,
online operations, grooming
salons, veterinary
practices
and Specialist Referral
Centres that have been
trading
for 104 weeks or more,
excluding
fee income from Joint
Venture
veterinary practices where
the Group has bought out
the Joint Venture Partners
or will offer to buy out
the Joint Venture Partners
in the future.
Underlying Underlying basic earnings Underlying basic EPS
basic EPS per share (EPS) is based (p) FY21 FY20 Note
on earnings per share after Underlying basic EPS 14.0 15.0 5
the impact of IFRS 16, but Non-underlying items 5.8 (1.5) 5
before the impact of ----
certain Basic earnings per
costs or incomes that share 19.8 13.5
derive
from events or transactions
that fall outside the
normal
activities of the Group,
and are excluded by virtue
of their size and nature
in order to reflect
management's
view of the performance
of the Group.
Underlying Underlying operating profit Underlying operating
operating is based on operating profit (GBPm) FY21 FY20 Note
profit profit Underlying operating
before the impact of profit 105.9 111.3 2
certain Non-underlying items 28.9 (7.6) 3
costs or incomes that ----
derive Operating profit 134.8 103.7
from events or transactions ----
that fall outside the
normal
activities of the Group,
and are excluded by virtue
of their size and nature
in order to reflect
management's
view of the performance
of the Group.
Underlying Underlying profit before Underlying PBT (GBPm) FY21 FY20 Note
profit before tax (PBT) is based on Underlying PBT 87.5 93.5 CIS
tax pre-tax Non-underlying items 28.9 (7.6) 3
profit before the impact ----
of certain costs or incomes PBT 116.4 85.9
that derive from events CIS = Consolidated income statement
or transactions that fall
outside the normal
activities
of the Group, and are
excluded
by virtue of their size
and nature in order to
reflect
management's view of the
performance of the Group.
Underlying Underlying profit after Underlying PAT (GBPm) FY21 FY20 Note
profit after tax (PAT) is based on post Underlying PAT 70.2 74.9 CIS
tax tax profit before the Non-underlying items 28.8 (7.5) CIS
impact ----
of certain costs or incomes PAT 99.0 67.4
that derive from events CIS = Consolidated income statement
or transactions that fall
outside the normal
activities
of the Group, and are
excluded
by virtue of their size
and nature in order to
reflect
management's view of the
performance of the Group.
Underlying Underlying total tax Underlying total tax
total tax expense expense (GBPm) FY21 FY20 Note
expense is based on the statutory Underlying tax expense (17.3) (18.6) 8
tax expense for the period Non-underlying items (0.1) 0.1 8
(being the net of current ----
and deferred tax) before Tax expense (17.4) (18.5)
the impact of certain costs
of incomes that derive from
events or transactions that
fall outside the normal
activities of the Group,
and are excluded by virtue
of their size and nature
in order to reflect
management's
view of the performance
of the Group.
Underlying Underlying net working Underlying net working
net working capital capital movement (GBPm) FY21 FY20 Note
capital movement is a measure of Net working capital
the cash required by the per cash flow statement (7.5) 27.3 CFS
business to fund its ----
inventory, Being:
receivables and payables. Movement in trade
The change year on year and other receivables (5.9) 8.8
reflects the cash Movement in inventories (22.1) 5.7 CFS
in/outflow Movement in trade
in relation to changes in and other payables 10.2 16.9 CFS
the working capital cycle Movement in provisions 1.3 (0.7) CFS
excluding non-underlying Trading working capital
items. movement (16.5) 30.7
The change in net working ----
capital is a key component Movement in gross
of the free cash flow operating loans 10.8 (2.5)
measure ----
of the Group. Cash working capital
movement (5.7) 28.2
----
Underlying allowance
for expected credit
losses against operating
loans (1.8) (0.9)
----
Net working capital
movement (7.5) 27.3
CFS = Consolidated
statement of cash
flows
(GBPm) FY21 FY20 Note
Receivables 49.3 55.9 17
Inventory 83.7 62.8 14
Trade and other payables (213.9) (204.6)
Provisions (4.3) (3.9) 21
Non-current provisions (2.1) (1.3) 21
Net working capital (87.3) (91.1)
Underlying Working capital before Underlying cash working
cash working increase/decrease capital (GBPm) FY21 FY20 Note
capital in gross operating loans Net working capital
to Joint Venture practices (above) (7.5) 27.3
Net loans and borrowings (9.0) 1.6 27
Underlying cash working
capital (16.5) 28.9
Operating Net cash flow from Operating free cash
cash flow operating flow(GBPm) FY21 FY20 Note
activities per the cash Net cash flow from
flow statement, before the operating activities
effects of corporation tax (per cash flow statement) 195.1 215.2 CFS
payments, non-underlying Add back:
elements, and IFRS 16 Tax paid 17.5 30.8 CFS
Settlement of put
& call liabilities
(growth element) - 0.8 CFS
Pre-tax underlying
operating cash flow 212.6 246.8
Capital lease payments (66.6) (67.0) CFS
Interest paid on lease
obligations (12.8) (14.0) CFS
Operating cash flow 133.2 165.8
Tax paid (17.5) (30.8) CFS
Interest paid (4.8) (3.7) CFS
Interest received 0.4 0.5 CFS
Debt issue costs (0.2) - CFS
Purchase of own shares (8.7) (2.8) CFS
Acquisition of PPE
and intangible assets (34.9) (39.6) CFS
Proceeds from sale
of PPE 0.3 0.4 CFS
Proceeds from sale
of PPE (non-underlying) - (0.2) CFS
Costs to acquire ROU
assets (0.4) - CFS
Underlying free cash
flow 67.4 89.6
CFS = Consolidated
statement of cash
flows
Omnichannel Revenue net of discounts Omnichannel revenue
revenue and VAT from core online (GBPm) FY21 FY20 Note
sales, subscriptions and Omnichannel revenue 161.3 93.9
order to store.
Underlying Earnings before interest Underlying EBIT (GBPm) FY21 FY20 Note
EBIT and tax agreed to operating Operating profit relating
profit relating to to underlying trading
underlying (EBIT) 105.9 111.3 2
trading.
Retail underlying Earnings before interest Retail underlying
EBIT and tax agreed to operating EBIT (GBPm) FY21 FY20 Note
profit relating to Retail operating profit
underlying relating to underlying
trading for the Retail trading (EBIT) 79.5 89.3 2
division.
Vet Group Earnings before interest Vet Group underlying
underlying and tax agreed to operating EBIT (GBPm) FY21 FY20 Note
EBIT profit relating to Vet Group operating
underlying profit relating to
trading for the Vet Group underlying trading
division. (EBIT) 36.0 30.6 2
Net cash/(debt) Cash and cash equivalents Net cash/(debt) (GBPm) FY21 FY20 Note
less loans and borrowings. Cash and cash equivalents 101.4 79.1 18
Loans and borrowings (100.0) (165.0) 19
----
Net cash/(debt) 1.4 (85.9)
Total indebtedness Cash and cash equivalents Total indebtedness
less loans and borrowings (GBPm) FY21 FY20 Note
plus lease liabilities. Cash and cash equivalents 101.4 79.1 18
Loans and borrowings (100.0) (165.0) 19
----
Net cash/(debt) 1.4 (85.9)
Lease liabilities (409.7) (463.9) 12
Total indebtedness (408.3) (549.8)
Customer Customer sales being Customer sales (GBPm) FY21 FY20 Note
sales statutory Statutory Group revenue 1,142.8 1,058.8 CIS
Group revenue, less Joint Fee income (57.0) (53.8) 2
Venture veterinary practice Sales by Joint Venture
fee income (which forms veterinary practices 351.3 329.7
part of statutory revenue ----
within the Vet Group), plus Customer sales 1,437.1 1,334.7
gross customer sales made ----
by Joint Venture veterinary IS = Consolidated income
practices (unaudited). statement
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR UNURRANUVUUR
(END) Dow Jones Newswires
May 27, 2021 02:00 ET (06:00 GMT)
Pets At Home (LSE:PETS)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Pets At Home (LSE:PETS)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024