Pets At Home Share Discussion Threads

[gargleblaster] 09/6/2015 01:54

Positive IC write-up which I previously over-looked!

It's a good time to be in the puppy and kitten business. Growing at a rate of 3.5 per cent since 2012 to reach a value of £6.1bn last year, the UK pet sector is significantly outperforming the general retail market. In March 2014 investors gained access to this growth when retailer Pets at Home (PETS) listed its equity on the London Stock Exchange at an IPO price of 245p a share. Those who bought into the story have been rewarded with an 11 per cent share price gain and an inaugural final dividend of 5.4p a share - about 40 per cent of profits.

The payout follows a robust set of annual figures. Last year, the expansion of the group's VIP Club, plus grooming, vet services and advanced nutrition offerings all contributed to like-for-like sales growth of 4.2 per cent. Gross margins increased by 40 basis points to 54.2 per cent, while underlying cash profits (which exclude £1.7m in share-based payments) rose nearly 10 per cent to £121m.

Despite high levels of cash conversion - 77 per cent last year - chief executive Nick Wood said deleveraging "remains the priority". Only when net debt gets to roughly one times cash profits will the group consider handing back spare cash to shareholders beyond the scheduled dividend.

That's partly because the group is ploughing capital into growing its services business, namely in-store veterinary practices and 'Groom Rooms'. Mr Wood hopes this will also spark an increase in like-for-like general merchandise sales, particularly as VIP members will get special discounts and reward programmes. The advanced nutrition division will also expand. New brands will be stocked and new product lines added to the company's own-brand and private-label ranges. Mr Wood said this should help attract new customers - customers who are "increasingly engaged" with pets living "healthy lives with quality products".

Analysts at Merrill Lynch expect adjusted EPS of 15.6p for the current financial year, up from 13.6p in the period to March 2015.

PETS AT HOME (PETS)
ORD PRICE: 273p MARKET VALUE: £1.37bn
TOUCH: 272.6-273.4p 12-MONTH HIGH: 285p LOW: 162p
DIVIDEND YIELD: 2.0% PE RATIO: 19
NET ASSET VALUE: 159p* NET DEBT: 24%

Year to 26 Mar Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2011 518 28.6 na na
2012 544 25.6 na na
2013 598 26.6 na na
2014 665 22.5 -13.8 nil
2015 729 87.0 14.4 5.4
% change +10 +286 - -

Ex-div: 13 Aug

Payment: 14 Sep

*Includes intangible assets of £956m, or 191p a share

IC VIEW:

The shares are up 3 per cent on our recent buy advice (266p, 16 Apr 2015) and trade on a fairly punchy 18 times forward earnings. But given the strength of consumer sentiment and Pets' rollout potential in a fragmented market, we think this one has further to run. Buy.

Last IC view: Buy, 266p, 16 Apr 2015

[gargleblaster] 07/6/2015 15:21

Thursday’s final numbers from Pets at Home (LON:PETS) obviously pleased Nomura.

The firm has upped its 12 months price target on shares in the pet care company by 50p to 295p.

[reddave999] 05/6/2015 11:41

Tipped as a buy in The Times today.

[lollipop3] 04/6/2015 20:00

I would get some more,no reddies though

[djbilywiz] 04/6/2015 11:59

I just grabbed some more too, good opportunity imo.

[gargleblaster] 04/6/2015 11:53

Never understand why, if people are taking profits, they don't do it before results come out. Anyway imv a good oppo to top up, and that is what I have done.

[prita] 04/6/2015 11:04

Profit taking I think; a case of selling on the news. The share price has been strong recently and unless the results were overly positive i.e. trading ahead of expectations, some selling was inevitable. Also, PETS aren't particularly cheap at 16 x PBT to MCAP. So expect some further weakness until the traditionally stronger market period of winter. Good underlying business so one to buy on weakness imo.

[djbilywiz] 04/6/2015 10:15

Tree shake/profit taking?

[wins73] 03/6/2015 17:10

Why thurs?

[lollipop3] 03/6/2015 12:17

SP up Thursday ?

[reddave999] 26/5/2015 09:04

I have visited a few of these stores recently and they all seem to be busy and that is a good sign

[crystball] 22/5/2015 12:29

A very long term steady hold IMO.

[daveb12] 22/5/2015 11:23

Next year or so should be good with the expansion and profits being seen from the vet side. As long as they manage this correctly profits should increase nicely year on year. I was hoping for a relatively quick profit (recently bought in) but more I look at them the more they become a keeper for next couple of years.

[crystball] 22/5/2015 10:08

The final dividend should be at least 3.6p per share by my reckoning.

[crystball] 22/5/2015 09:50

Yes, a good run indeed. Should get a good final dividend. Back in December, Ian Kellett (CFO) said 'The Board has declared an interim dividend of 1.8 pence per share, payable on the 16th January 2015 to shareholders on the register at the close of trading on 12th December 2014. The Board is confident in targeting
a total full year dividend payment of between 35-40% of earnings, reflective of the positive outlook for the business'.

I look forward to that!

[pet lover] 22/5/2015 09:06

These vets just like CVSG and PVG are having a storming run.The hound and I think we're onto a winner.
The sector has high margins and growth. PETS is a massive company so I've gone for the lowest valued one in the hope it will catch up with PETS. I was wrong here though thinking it may run out of steam and was overvalued at the float price.

[marles] 20/5/2015 13:04

Chart looks good, you can see a lot of disgruntled investors unloaded at 240p in March 2015 to get their money back. When this had cleared the more long term investors held on and new buyers are coming in and 300p looks good although might offer a bit of resistance. The business might not have worked 30 years ago but these days people just love their pets and spend a lot of cash on them!

[lollipop3] 11/5/2015 12:31

Come on then,GIDDY UP A DING -DONG....What do you guys think is it worth buying some more?TIA.J

[daveb12] 06/5/2015 07:31

What is needed to push to 300p?

[lollipop3] 05/5/2015 13:29

Going along nicely today

[standish11] 22/4/2015 10:53

Animal spirits
Amid the plethora of initial public offerings last year Pets at Home, floated in March 2014, was one of the dogs.
Shares, initially sold at 240p a piece, immediately fell below the offer price and only bounced back in February 2015. Progress was partly held up because private equity sellers KKR loaded the enterprise up with debt that has since been refinanced at a lower cost.
Enthusiasm for its ‘groom’ operation, which offers pampering for your pet and a VIP club for loyal customers, looks to be paying off.
Woof, woof.

Above is comment by the respected Alex Brummer of the Daily Mail .

[gargleblaster] 21/4/2015 22:32

A case of profit-taking after a good run imv. Could prove to be a good buying oppo longer term.