May 22, 2018

Pets At Home sinks 8% on higher staff costs

Shares in Pets at Home, the pet care and products retailer, fell nearly 8 per cent after the group cautioned that the "Path to profit growth for some practices is lengthening as a result of the upward pressure on payroll costs." The wage pressure is partly a function of the Brexit vote; Pets at Home said around 30 per cent of veterinarians are thought to be EU-domiciled, and said the "Supply of veterinarians is unlikely to change in the short term." Veterinary care is a key part of the group's strategy, offering a service-led revenue stream to complement sales of pet food and accessories. Pets at Home said its vet practices generated cash returns on invested capital of 24 per cent, and has changed its reporting structure to show revenue and earnings from the business more transparently. Private equity group KKR, which bought Pets at Home for £955m in 2010 before floating it for £1.23bn in 2014, sold its remaining shares in the group at the start of this year.

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