Pets At Home Share Discussion Threads

[pictureframe] 28/11/2018 17:35

Well I added at 1.20 just before close.

[yump] 28/11/2018 15:33

Have to wait and see if the algorithms 'spot' it. Then you get the unexplained consistent rises after the unexplained consistent falls.

[pictureframe] 28/11/2018 13:25

Nice recover and bounce on the way.

[muchodinero] 28/11/2018 09:04

results

Well considering the half year update was more downbeat than was being stated in the previous management statements, revenues are still growing strongly. Looks like management have taken the opportunity to carry out some write offs (reduces tax bill also). Share price reaction is surprisingly robust considering the headline reduction in profit for half year. Shorts appear to have lost their appetite for PETS in the light of robust management actions and 7.5p dividend being re-stated. I'm quite happy to get a 6.5% yield with prospects of 10% share price growth. Also there is always the potential for PE to come back for PETS. Shorts won't enjoy paying a 7.5p dividend and paying at least the same again to borrow the stock. I think this will creep higher over the next 12 months based on the latest update and all factors mentioned. Aimho adyor!!!

[paulhunt1] 27/11/2018 19:40

Also shorts leaving quickly at last. Knoteki now gone and some 3 million shares put through after hours today. Engadine looking very exposed now

[muchodinero] 27/11/2018 17:58

Divi yield looking good

[balancedviews] 27/11/2018 13:49

Looks pretty solid with some realistic views and plans around growth.
With a solid dividend little reason to not keep believing. Mathematically still consider them undervalued.

[crystball] 27/11/2018 12:33

I listened in to the live webcast this morning. Steady progress in retail and a measured plan for growth in Vets practices. I hope they survive long term and don't get bought out. Happy to continue holding.

[yump] 27/11/2018 11:57

I suppose there are no other businesses doing what they are doing, so the original model with vet practices, despite revenue growing well, wasn't necessarily going to be right for ever - seeing as there wasn't a precedent to copy.

By the look of it, dealing with it is the important issue, which they are doing.

Hopefully this is not a business that gets taken over at a 'bottom' price, like INTU.

Private equity has 'insurance' when investing in pre-float businesses as they can often unload during and after float.

With existing businesses, they must be pretty sure they can take private and then be the sole beneficiaries of an upturn. Either that or take an axe to stuff and benefit from a shorter term stream of profits and cash.

It sucks when floated companies are taken private.

[pete160] 27/11/2018 08:10

Sounds as if they recognise that there is a need to gear up to make the most of their vets position but they don't have the skills or resources to do it quickly enough.
A private equity owner probably would.... ?

[yump] 27/11/2018 07:45

There was a hint in the previous statement that they were going to do something to address some issues with the vet businesses:

"We know one of the biggest opportunities in our business is to accelerate the maturity and returns of our vet practices. We therefore need to address the challenges, such as the shortage of veterinary practitioners and the associated cost and cashflow support that is required."

Be interesting to see whether the buy-backs of some practices and associated costs are viewed as positive or not, because the issue is being dealt with.

FCF from the practices forecast to improve by the look of it, which is important wrt dividend, which is presumably why there have been a few worries voiced in various places.

[creditcrunchies] 27/11/2018 07:39

decent yield on the dividend maintained at 7.5p for the year I make that 6.5% at current SP

[skinny] 27/11/2018 07:07

Becoming the leading pet care specialist and returning to sustainable cashflow growth: interim financial results, strategic update and veterinary business review



· UK pet care market remains resilient, growing at c3-4%

· Pets at Home unique strategy winning with customers

o Retail business H1 FY19 LFL growth of 4.7%#, taking market share

o Vet practice H1 FY19 customer revenues growing at 15.4%

· New strategy to become a complete pet care company

· Taking action in our vet business to release cash profits and deliver more sustainable growth

· Building the right leadership team to deliver, having recently appointed our Chief Data Officer, COO of Retail and CEO of the First Opinion vet business to our Executive Management Team

· Group focus is to deliver sustainable free cashflow growth

Comment from Peter Pritchard, Group Chief Executive Officer

"Since becoming the Group CEO in May, I have had the opportunity to take stock of the wider group and shape my view of our future. What I have found fills me with confidence. Pets at Home is a healthy business and customers are loving what we do; responding to our price repositioning, investment in digital and the amazing service delivered by our vet partners. We have the ability to offer almost everything a pet owner needs, giving us opportunities our competitors simply don't have. Which is why my vision is to develop a complete pet care company, uniting our retail and vet businesses.

Reviewing our Vet Group has been a priority. I recognise we have grown at pace and more recently, have seen the pressure that rising costs and our fees are placing on this young business. We will need to recalibrate the business to deliver more measured growth, whilst maintaining our plan to generate significant cash profits.

We are focused on maximising our unique assets and delivering a plan for sustainable cashflow and profit growth. Given the success of the changes we have made in Retail, I'm confident we can do this."

First Opinion vet business review: recalibrating the business to deliver sustainable returns

We have completed a review of the First Opinion vet business, in recognition that the business' environment has evolved. Our findings have confirmed we are operating in a market growing at c5%, customer revenue growth is strong and we have a unique business model through shared ownership with Joint Venture Partners (JVPs). We also recognise the increasing cost pressures, including fees charged by Pets at Home, that certain practices are experiencing. We are taking action to put our business on a stronger long term footing and deliver significant cashflow.

We have 471 practices, of which the majority have already achieved, or are expected to remain on track to reach maturity. With our JV practices, we plan to rebalance and simplify the fee structure, to allow practices to mature more swiftly and generate returns for both Pets at Home and JVPs. We will also offer to buy back and consolidate up to 55 practices from JVPs. Around 25 of these will be operated as company managed practices, whilst we will consider the options for the remainder, which may result in us proposing to close them. For all practices which we offer to buy back, JVPs will not be expected to repay outstanding borrowings to any parties and Pets at Home will settle any liabilities for third party bank loans and leases on behalf of the JVP. We expect this to result in total non-underlying income statement costs of up to £49m and non-underlying cash costs of up to £27m.

Impact of future vet business actions on the interim financial statements

For practices which we will offer to buy back from JVPs, fee income has not been recognised within Vet Group revenue. A non-underlying charge of £29.0m has been recognised against Vet Group, and Group, gross profit to provide for the balance of funding provided by Pets at Home, guaranteed bank and lease obligations, and the cost of additional operating cash outflows forecast to be incurred by the Group through to buy-out. Further costs, including closure costs if we decide to close practices, are expected to be provided during H2 FY19 and FY20.

more.....

[yump] 25/11/2018 12:41

If there are question marks, I think it will be over the resources used to support the vets businesses while they get up and running, while at the same time having difficulty getting enough vets.

[crystball] 24/11/2018 20:01

There will be an update and news next Tuesday. Business as usual or not? It will be interesting to see what is revealed.

[paulhunt1] 24/11/2018 19:54

Same movements prior to all results. Expect a tick up to 1.30 on results falling back to mid 1.20s. The question is will shorts then see this as a permanent stabilisation of the company and move on.

[creditcrunchies] 23/11/2018 19:50

The way it dived today I'm guessing they're expecting soft numbers

[andplus] 23/11/2018 14:07

It will be rude to short. Considering shorts are closing ahead of results, this is the time to buy with caution.

[yump] 22/11/2018 11:53

Well at a time when other retailers are closing stores, PETS are opening new ones. So either that's bonkers, or its based on extrapolating performance a few years ahead and deciding that its viable. PETS at least starts from position of not having a mass of legacy shops that are losing substantial amounts and their online is growing well.

Given the massive anti-physical shop sentiment, I'm sure there are some very good opportunities for investing in retailers that get the offline/online mix right.

The main differentiator here is that there is actually a compelling reason to turn up at a store. What's unknown is whether PETS vets and groomers are going to be more trusted than the small local outfits. Our local groomer is good, but the premises is a right mess.

Perhaps some of the clothing retailers should have set up hairdressing/beauty salons within their shops years ago. They'd have had the money to use celebrities to publicise as well.

[muchodinero] 21/11/2018 20:42

RE: Short Reduction/ No longer #1 short

Was Blackrock, Kontiki and Coltrane all reducing in last month done with the help
of a certain notorious unreliable aid GS??? Not sure why the likes of Engadine aren't budging???

[balancedviews] 19/11/2018 18:44

Clearly I won't endlessly buy - just think this is a solid stock undervalued. Hey I may be wrong but I would love to read a piece of robust logic which says the share price is right

[balancedviews] 19/11/2018 18:42

We shall see
Yours
Warren

[davr0s] 19/11/2018 18:39

That's how to blow your account up

[balancedviews] 19/11/2018 16:56

Every-time there is a drop I've bought and will continue to do so.
Two things drive the share price - business performance and a bunch of cowboys. The latter may be fabulous analysts with great algorithms but do not understand the core business.
My logics are as follows -

The margin on 'core product' reducing doesn't matter as its a volume play and will be held up by 'one stop shop' and increasing online.
Its service business' of pets and grooming will likely grow further
The basic maths on the value of the company is off. The VET business alone is roughly worth the current price.
The dividend is healthy and well covered.

My only emotion in my thinking is a 'one in the eye' for the shorters who bully the market. Philosophically I think its sad such a bunch of number crunching wide boys can impact on companies success and failure.

The 'right' price for this share is close to £2. The variable will be the date it gets there.

I will not just hold out but keep buying if it drops.

[montyhedge] 18/11/2018 22:44

Zzzzzzzz all you want shares have halved.