Pets At Home Investors - PETS

Pets At Home Investors - PETS

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Stock Name Stock Symbol Market Stock Type
Pets At Home Group Plc PETS London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-3.60 -0.78% 460.40 16:35:17
Open Price Low Price High Price Close Price Previous Close
466.80 459.80 470.80 460.40 464.00
more quote information »
Industry Sector

Top Investor Posts

chiefbrody: I wonder if PETS recent corporate affairs has spooked a few investors.
hazl: If you look at the above you will see a quote where Mr Pritchard stated that investors had started to realise what a good company Pets at home is. He said that there is more to go for the company.
crystball: Yes, an excellent day. An unexpected bonus. I have had time to listen to the analyst and investor conference call and was very impressed with what was explained and the answers to the questions.
skinny: Fortuitous that Merian Global Investors were able to increase their holding by 1.06% on the back of yesterday's 'Upgrade'!
pstick: Seems like it is being targeted by a short seller. Although for some reason, I can't find the full report on their website. It would be interesting to see the full analysis. They may be onto something, lots of hedge funds have shorted this stock in the recent years. Bonitas is Short Pets At Home (London: PETS) UK Companies House filings revealed that Pets At Home Group Plc (London: PETS) lied about GBP 34 million of undisclosed trading loans hidden from its balance sheet used to support circular payments from PETS Vet Group Joint Ventures (“PETS JVs”) which we believe artificially inflated PETS reported profits. Including undisclosed trading balances, PETS’ actual funding, trading and operating (“FTO”) loan balances owed by PETS JVs were GBP 74 million and GBP 64 million as of FYE’18 and FYE’19, 87% and 51% greater than what PETS reported in its FY’19 Annual Report. Without these loans, PETS JVs would not have been able to pay PETS service fees and rents. The circular payment scheme had a significant impact on PETS’ purported profitability. PETS recognized 50%+ operating margins on PETS JV service fees versus 8% for its retail segment. While accounting for only 6% of PETS revenues, PETS JV service fees accounted for 31% of PETS’ operating profits. We reviewed over 1,800 annual reports for 432 individual PETS JVs between FY’15 and FY’19 available for free online via UK Companies House filings. Most PETS JVs were loss-making and drowning in liabilities. In FY’18, while PETS generated GBP 27 million operating profits from PETS JV service fees, PETS JVs generated aggregate losses of GBP 14 million. PETS JVs revealed aggregate liabilities of GBP 170 million as of FYE’19. Recently PETS actively restructured some PETS JVs via step-up acquisitions and in each instance PETS assumed all PETS JV liabilities. PETS’ restructuring efforts have already cost GBP 40+ million in write-offs and expenses from 55 PETS JV step-up acquisitions as of FYE’19. As PETS JVs sink deeper into debt, we anticipate that PETS will be forced to bail out and write off additional PETS JVs. Below are additional highlights from our review of operating PETS JV annual reports: • 253 (61%) generated aggregate losses of GBP 27 million in FY’18. • 108 (26%) had adminstrative expenses that exceeded revenues in FY’18. • 283 (69%) were balance sheet insolvent with aggregate net liabilities of GBP 100 million as of FYE’19. • 60 (15%) had net liabilities that exceeded GBP 500,000 as of FYE’19 (not including 19 additional PETS JVs that were bought back and written off by PETS in FY’19). PETS charged PETS JVs service fees and rents only afforded with concurrent financial support. If PETS cannot continue to provide such a significant level of financial support to PETS JVs, the scheme collapses. PETS’ FYE’19 balance sheet held GBP 395 million goodwill largely attributable to the future cash flow generating ability of PETS JVs and reported a contingent liability of GBP 11 million, only 17% of what PETS JVs owed third party banks. To us, the evidence is clear that PETS lied to investors about the level of financial support given to PETS JVs which artificially inflated PETS’ reported profitability and understated its liabilities. We believe a restatement of PETS’ financial performance would include adjustments to goodwill, increased recognized exposure to PETS JV bank debt and further write-offs of direct loans to PETS JVs. As investors consider PETS’ hidden liabilities, its low earnings quality from circular payments and inflated carrying balances for certain assets, we think PETS’ stock price could break previous lows with a downside of 75%+.
yump: imo its sentiment that has changed. The business has stabilised very recently, its not got better over 5 years. Clearly investors went from not liking it, to liking it, in a very short space of time. Who was buying in quantity and why is an unknown, except that there are so few retailers that appear to be stable, it might just be a flow of 'retail' investment money, trying to find a home to balance out portfolios. It must be tempting to run a portfolio with absolutely no retail element, based on the generally deteriorating conditions. Or you have to have the ones on high pe's in the hope they will continue.
niggle: yump - I think there are so few retailers getting it right that this one is sucking in some major investors. I just hope there are no bumps ahead. If Labour gets in expect a sell off.
yump: The studies that would actually be useful don't seem to have been done, although there's lots of anecdotes and lots of attention to candles, charts, supposed 'tech' stuff. For instance, is it just the case that because of the internet and rapid information release, stocks that (say 30 years ago) would have taken say 5 years to go from 50p to 300p, reflecting their growth, now get the same rise in 2 or less, purely because a flood of investors all buy at the same time. Previously it would have taken much longer to digest all the information and make a decision. So although on traditional investment strategy you should buy and hold, it actually makes complete sense to sell after those 2 years, because the stock has actually got way ahead of itself and your return is just as good as it would have been after 5. Of course, there's the 'look what you could have won' brigade who will quote ASOS until they're blue in the face, but realistically what are the chances of spotting it and knowing that it will grow for xx years and holding it for that long ? 'look what I could have won if I'd sold when the stock shot up way ahead of where I thought it should be' I think might be a better adage... In a full bull recovery market, buy and hold probably works better though - but then you've got to know its happening and for how long.
yump: Perhaps it is just one of the few stocks that had a stable market, brexit or no brexit, boom or bust, so it’s just collecting investors from all over. I would have kept longer only it looked quite highly rated and I’d have been happy with 200p in a year, so thought I’d be clever, sell out and buy back when it dropped as been burnt by holding a few stocks like easyJet that just kept going up in the face of worries and then halved. No idea what price to consider buying back at now ! Also blame wife as she kept saying shop was empty whenever she went in. To be fair she also said don’t buy Saga and now it’s plummeted
skinny: Trading Statement. Financial summary · Group revenue1 growth of 9.9% to £303.4m o Retail revenue up 8.7% to £266.4m, including omnichannel2 revenue up 36.0% to £26.0m o Vet Group revenue1 up 18.8% to £37.0m. First Opinion customer sales growth across all vet practices was 11.4%, with mature practices growing ahead of the market · Group like-for-like3 revenue growth of 8.0% o Retail like-for-like revenue growth of 8.2% o Vet Group like-for-like revenue growth4 of 6.2%, with like-for-like Joint Venture fee income up 1.1% to £16.2m, reflecting the planned impact of our fee remediation measures · We now expect underlying profit for the year, before IFRS16 impacts5, to be slightly above current market expectations6, reflecting: o Good transaction and cash growth in Retail, particularly in food and omnichannel where strong growth has more than offset adverse margin mix o Vet Group underlying performance in line with our plans, with the financial impact of buying out a number of Joint Venture vet practices comfortably within expectations · All other FY20 financial guidance components7 are maintained Strategic highlights We are introducing more customers to our complete pet care offer, allowing us to take a greater share of their overall spend: o Number of VIPs who purchase products and a service has grown 23% y/y, driven by increased use of both the Groom Room and our First Opinion vets o Number of subscription customers8 across the Group is now over 765,000 · In Retail, our investment in convenient, competitive and innovative shopping has brought success across categories, in particular with acquiring new customers and their food shop · Vet Group recalibration on track, with the buy out and closure of practices largely complete · Formed a strategic partnership through an investment in, a leading online marketplace in the UK for pet walking, sitting and boarding services, which will enhance our pet care services to customers Peter Pritchard, Group Chief Executive Officer, commented: "The momentum with which we exited FY19 has continued into the first quarter of FY20. We have seen a strong sales performance across the business, particularly in Retail where like-for-like sales were 8.2% - an impressive 14% on a two year basis. We are also making good progress in our Vet Group. Our plans to buy out a number of Joint Venture vet practices have been carefully executed, whilst performance in the ongoing estate remains strong. We have the right foundations in place to accelerate the maturity of our vet practices in a sustainable way, delivering cashflow benefits to both Joint Venture Partners and Pets at Home. At this early stage in the year, and with ongoing uncertainty across the wider retail sector, we remain cautiously optimistic and focused on delivering our pet care strategy." Conference call A conference call for analysts and investors will be held at 8.30am today. To join the call, please dial +44 (0)330 336 9125 and use the participant access code 9026449. A recording will be available at http://investors.petsathome
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