Pets at Home Group Plc Annual Report and Accounts 2024
Bringing together
the very best in
pet care
Annual Report and Accounts 2024
We provide the best
products, services and
advice to guide pet
owners through their
pet care journey.
Bringing together
the very best in
pet care
We are the UK’s leading pet care business,
offering a unique blend of pet care
solutions seamlessly connected across
all channels, delivering an unrivalled
experience to consumers.
For more information:
www.petsathomeplc.com
Strategic Report Governance Financial Statements
01
2024
£1,404.2m
£1,317.8m
2023
2022
£1,476.6m
2024 £105.7m
£122.5m
£148.7m
2023
2022
2024 £132.0m
£136.4m
£130.1m
2023
2022
2024 12.8p
12.8p
11.8p
2023
2022
Strategic Report
1 Highlights
2 Chair’s Statement
4 Business Model
5 Investment Case
6
Performance Summary
7
Chief Executive Officer’s Review
8 Key Performance Indicators
10
Market Overview
12
Stakeholder Engagement and
Section 172 Statement
16
Sustainability Review
19 Chief Financial Officer’s Review
22 Risks Review
Governance
33 Chair’s Introduction to Governance
34
Board of Directors
36
Leadership and Purpose
38
Division of Responsibilities
41
Composition, Succession and Evaluation
44
Nomination and Corporate
Governance Committee Report
46
Audit and Risk Committee Report
52
ESG Committee Report
54
TCFD Statement
66
Directors’ Remuneration Report
70
Our Directors’ Remuneration Policy
85
Directors’ Report
92
Statement of Directors’ Responsibilities
Financial statements
94 Independent Auditor’s Report
100
Consolidated Income Statement
100 Consolidated Statement of
Comprehensive Income
101
Consolidated Balance Sheet
102 Consolidated Statement of Changes
in Equity as at 28March 2024
102 Consolidated Statement of Changes
in Equity as at 30March 2023
103
Consolidated Statement of Cash Flows
104
Company Balance Sheet
105 Company Statement of Changes
in Equity as at 28March 2024
105 Company Statement of Changes
in Equity as at 30March 2023
106
Company Statement of Cash Flows
107 Notes (Forming Part of the
Financial Statements)
168
Glossary – Alternative Performance Measures
01–32 33–92 93–170
£1,476.6m £132.0m
£
105.7m 12.8p
+5.2% (3.2)%
(13.7)%
Financial highlights
Revenue (£m) Underlying PBT
1
(£m)
Profit before tax (PBT) (£m) Dividend per share (pence)
Sustainability highlights
£9.2m
raised to support pet charities
16,000
hours donated to local communities
44%
reduction in absolute scope
1 & 2 CO
2
e emissions in 9 years
Highlights
1
Alternative Performance Measures (APMs) are defined and reconciled to IFRS information, where possible, on pages 168 to 170.
Pets at Home Group Plc Annual Report and Accounts 2024
02
Chair’s Statement
Delivering
our strategy
Ian Burke, Chair
Strategy
Our business has a clear purpose –
‘to create a better world for pets and
the people who love them’ – and a clear
strategy to deliverthis.
This strategy is to build an integrated,
omnichannel, consumer centric platform
which unifies our unique blend of products,
services, and advice, connecting them
seamlessly across all channels to deliver
an unrivalled experience for consumers.
In what has been a challenging year for
many, I am proud to say we have delivered
progress against this strategy. We continued
to support the nation’s pet owners through
offering a unique combination of convenient
and affordable pet care solutions.
The launch of our unified Pets brand last
April helped bring together all our products
and services under one master brand,
representing our consumer positioning as a
provider of all pet owners’ pet care needs.
Last Summer, we launched our new
distribution centre (DC) in Stafford, which
is now supporting all store deliveries. We
will complete the transition of our online
business to the new DC in the coming year
which will vastly improve our operational
capability, underpinning our capacity needs
for the next decade.
And most recently, we reached a major
milestone in the digitisation of the business,
launching our brand new app and website
to consumers. Once the integration of our
new vet practice management system is
implemented, this will provide pet owners a
digital home for all of their pet care needs.
Our commitment to running a sustainable
business plays a critical role in supporting
this strategy. Acting responsibly has always
been at the heart of our business and by
focusing on financial sustainability, as well
as the sustainability of human and natural
capital, our strategy will ensure we continue
to generate long-term sustainable growth for
all of our stakeholders.
Colleagues
Our colleagues, and their unrivalled skill,
passion, and expertise, remain a key strategic
advantage. They are the face of our business,
and work tirelessly every day to help guide
pet owners through their pet care journey.
The last 12 months represent a critical year
for the business with much to celebrate,
but also with some challenges, such as
the transition to our new DC, which our
colleagues have successfully navigated
by working well together. Personally, and
on behalf of the Board, I would like to
thank them for their ongoing hard work
anddedication.
FY24 has been a pivotal year for the business,
in delivering against our strategy to build the
world’s best pet care platform. We have delivered
some key foundations that will support long-
term growth, alongside a resilient financial
performance, in what remains a challenging
economic environment. We have also made
progress against our sustainability agenda.
Strategic Report Governance Financial Statements
03
Our Vision
Our Purpose
Our Sustainability Commitments
To create a better world for pets
and the people who love them
To build the world’s best pet care platform
An unrivalled experience
To make pet care
environmentally sustainable
Seamlessly connected
To be the best employer
and developer of talent
A unified blend of products,
services and advice
To improve the life of
every pet in the UK
Planet
Pets
People
Governance
During the year, we were delighted to
welcome Natalie-Jane Macdonald to the
Board as an independent Non-Executive
Director. Natalie has deep knowledge of the
healthcare sector including experience at
Bupa and Nuffield Health. Her experience will
be of great value to the business as it embarks
on the next stage of its ambitious growth plan,
particularly in our veterinary business.
We also welcomed Angelique Augereau to
the Board as an independent Non-Executive
Director. Angelique has extensive experience
in data, Artificial Intelligence and machine
learning, having served as the Chief Analytics
Officer at Capital One Financial Corporation.
Her skills and expertise will ensure the Board
is well placed to deal with future growth in
this field.
Dennis Millard, who served as the
Company’s Senior Independent Director for
nine years, stood down from that position in
February 2023, however remained a Director
of the Company for a further year.
The Directors, on behalf of the Company,
wish to thank him for his dedicated service.
Susan Dawson, who has served on the Board
as an independent Non-Executive Director
since 2018, has decided to step down from
the Board at this year’s AGM. Myself and
the Board would like to thank Susan for her
service to the business.
Dividend
The business continues to be highly cash
generative, and despite strong levels of
investment, we finish the year in a net cash
position.
As such, the Board has recommended a final
dividend of 8.3 pence per share, taking the
total dividend for the year to 12.8 pence per
share. The final dividend will be payable on
16July 2024 to shareholders on the register
at the close of trading on 7 June 2024.
Looking ahead
Looking ahead, the growth outlook for the
pet care sector remains promising, and our
fully integrated omnichannel model positions
Pets at Home well to benefit from these
favourable market trends. The significant
investments we have made in the business
over the last year will continue to deliver
benefits in the years ahead, and our balance
sheet strength enables us to continue
investing in the new capabilities needed to
build the world’s best pet care platform. We
look to the future with much optimism and
I remain confident that our unique pet care
strategy will continue to deliver long-term
sustainable value to all our stakeholders.
Ian Burke
Chair
28 May 2024
Integrated Omnichannel Consumer-centric
Pets at Home Group Plc Annual Report and Accounts 2024
04
Business Model
A wide range of pet products are available both
online and in our stores, which offer far more
to the pet owner than just a place to buy food
and accessories. Through a combination of our
in-store experience and services, knowledgeable
colleagues and award winning Pets loyalty club,
we aim to make pet ownership convenient,
affordable and rewarding.
We provide a comprehensive range of small
animal veterinary services through a network of
general practices, which handle all aspects of
general veterinary care. We also offer round-the-
clock veterinary telehealth advice and triage so
clients can access all their pet healthcare needs
whenever they need to.
O
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r
P
e
t
C
a
r
e
P
l
a
t
f
o
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m
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d
e
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p
i
n
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y
O
u
r
B
e
t
t
e
r
W
o
r
l
d
P
l
e
d
g
e
Grooming and
wellness
Subscription
plans
Advice and
support
Digital and
hybrid
solutions
Food and
nutrition
General
veterinary
practices
Accessories
and
consumables
Advanced
and 24-hour
veterinary care
Vet GroupRetail
Strategic Report Governance Financial Statements
05
Investment Case
Leading position in a
growing, resilient market
– We have a leading position in the
£8.2bn pet care market, providing
significant opportunity to take
further share
– The pet care market is in structural
growth underpinned by increasing
humanisation, premiumisation and
penetration
Unique pet care model
– An expanding platform of pet care,
combining products, services and
expert advice from a trusted, well
known brand
– Only business in the UK offering
complete pet care to owners
throughout the full pet care journey,
seamlessly connected across
all channels
Best in class digital
platform
– Creating a proprietary digital platform
where customers can access their
entire pet care needs in one place
– Launched new customer app and
website in FY24, a key foundation for
future growth, enabling us to deliver
a succession of improvements in the
years ahead
Differentiated veterinary
business
– Largest branded veterinary business
in the UK, with practices located in
two-thirds of stores
– Practice maturity represents a
significant future growth opportunity,
with further upside from practice
rollout, extension and advanced
capabilities
Unrivalled proprietary
data set
– Unique loyalty club, providing over 10
years’ worth of proprietary analytical
pet data
– By leveraging our data insights, we
can offer more personalised, targeted
solutions, driving customer loyalty,
retention and lifetime value
Well-invested nationwide
physical network
– A well-located network of pet care
centres, 58% with co-located grooming
and veterinary services
– Well-invested estate, with 41 refits
completed in FY24, offering an
engaging and rewarding experience
for consumers
Strong financial position
and returns potential
– Robust balance sheet with good
liquidity, low leverage and significant
headroom on banking covenants
– Highly cash generative with free cash
flow of £69.0m and dividend per share
of 12.8p
Unwavering commitment
to sustainability
– Strong commitment to sustainability
with a strategy designed to balance
the interests of all stakeholders
– Balanced Board of Directors with
a broad range of skills, experience
and expertise
Extensive pet care
expertise
– Our colleagues, and their unrivalled
skill, passion, and expertise, are a key
strategic advantage
– Unique ability to provide pet owners
with clinical, nutritional, and wellbeing
advice through physical and digital
channels
23%
market share
£178
average customer value
+12%
average online order growth YoY
447
veterinary practices
458
pet care centres
7.8m
active loyalty club members
12.8
p
Dividend per share
£9.2m
raised for charities
6,000+
trained nutritionists
A clear and compelling
investment case
Pets at Home Group Plc Annual Report and Accounts 2024
06
Laying the
foundations
for future
growth
Performance Summary
FY24 has been a
year of delivery
For more information:
www.petsathomeplc.com
Financial highlights
Strategic highlights
Consumer Revenue
1
£1,906.3m
Free cash flow
1
£69.0m
Dividend per share
12.8p
Revenue
£1,476.6m
Statutory PBT
£105.7m
Underlying PBT
1
£132.0m
1
Alternative Performance Measures (APMs) are defined and reconciled to IFRS information, where possible, on pages 168 to 170.
Opened new DC
Stafford DC launched, now supporting
100% of stores. Online fulfilment next.
Launched digital
platform
Launched new app and website to
customers in FY24 as planned.
Winning on
vet talent
Improved attraction and retention,
more vets driving growth in visits.
Accelerated
innovation
Accelerated innovation across food
and accessories, driving growth into
own brand and premium categories.
CMA review
Responded to the CMA review into
the veterinary sector, highlighting the
uniqueness of our Joint Venture model.
New brand
Launched our new Pets brand,
bringing together our products and
services under one master brand.
Invested in our
physical assets
5 new stores, 41 refits, 3 new vets,
26 vet extensions and 10 company
managed practices converted to JV.
Strategic Report Governance Financial Statements
07
Chief Executive Officer’s Review
FY24 has been a pivotal year for the business,
having delivered some key building blocks of our
platform for long-term growth, and I am proud
of the progress we have made in the year. The
business has come together brilliantly to navigate
any challenges faced this year, and we have
delivered some key milestones of our strategy.
Lyssa McGowan, CEO
We have successfully
delivered year one of
our strategy
An integrated consumer experience
– Our pet care platform truly integrates
our unique blend of products, services
and advice. Once complete, it will span
the entire group, seamlessly connecting
consumers, vets and retail colleagues.
– Our Pets Club loyalty programme
provides unique insights into the UK
pet population, with over 10 years of
analytical data on 10 million pets. We now
have 7.8m active members, +2% YoY.
– Growing share of wallet is our greatest
opportunity, unlocked by creating easy,
frictionless, and enjoyable customer
journeys across our platform.
A unique data and digital platform
– Our new app and website are live,
transforming the shopping and
subscription experience for pet owners.
Early insights are positive, with average
daily app sales up c25% vs pre-launch.
– This marks a major step in the digitisation
of the business, but is only the beginning
of what we will offer consumers, and we
will continue to deliver a succession of
improvements in the years ahead.
– We will increasingly leverage data to
drive targeted and highly personalised
offers, improve operational efficiency, and
grow predictable, sticky revenue streams.
Spotlight on Sustainability
Acting responsibly has always been at the heart of our business, and our
sustainability agenda, which we call our Better World Pledge, is fully integrated
into our strategy, centred around a shared purpose of creating a better world for
pets and the people who love them.
We are proud of the progress we have made this year:
– Planet: We will continue to reduce the carbon intensity of our own operation.
Our 3.5% reduction in Scope 1 and 2 emissions in FY24 takes the reduction over
the past 9 years to 44%.
– Pets: We remain the biggest supporter of pet-related charities in the UK
through the Pets Foundation, having raised over £9.2m in this year alone.
– People: We continue to support the communities in which we operate, and our
colleagues have collectively donated over 16,000 hours to local causes through
our Better World Pledge days.
For more information:
Please visit out 2024 Sustainability Report
Differentiated, sector-leading vets
– We are the only business which has
successfully brought together clinical
and retail services at scale, a key part of
offering complete pet care to customers.
– Our unique practice owner model has
driven record growth and consistent
market outperformance, with consumer
revenues now £576m, acting as a
material contributor to the overall group.
– As more practices reach maturity it
unlocks opportunities to drive additional
growth through advanced capabilities,
practice extensions, and the planned
rollout of 5 to 15 new practices a year.
An unrivalled retail proposition
– We will leverage our category authority
and expertise to lead on innovation in
food, led by our own brands (up 13% YoY),
introducing new ranges, and increasing
our presence in emerging areas.
– We plan to return accessories to
growth through driving premiumisation,
leveraging exclusive licenses and tie-
ups, and creating points of engagement
around major events.
– We will continue to open new pet
care centres in attractive catchments,
particularly urban, targeting 35 to 40 new
openings over the medium term, as well as
continuing to invest in our existing estate.
Pets at Home Group Plc Annual Report and Accounts 2024
08
Key Performance Indicators
2024 2024 2024£1,906.3m £132.0m £69.0m
£1,782.4m £136.4m £98.2m
£1,673.8m £130.1m £95.0m
2023 2023 2023
2022 2022 2022
£132.0m
(3.2)%
£1,906.3m
+6.9%
£69.0m
(29.7)%
We are committed to generating
shareholder value and financial
returns, and therefore focus
on three financial metrics we
believe are the best measure
of our performance. Alongside
financial KPIs, we also have KPIs
aligned to our strategic progress
to ensure we can track delivery
against our key objectives.
Financial KPIs shown represent
those used by the business
to monitor performance.
Management recognise that
as Alternative Performance
Measures
1
they differ to
statutory metrics, but believe
they represent the most
appropriateKPIs.
In order to consolidate the
reporting requirements under
sections 414CA and 414CB of the
Companies Act 2006 in respect
of non-financial reporting, the
list on page 91 shows where in
the Annual Report to find each
of the disclosure requirements.
Financial performance
Consumer revenue
1
(£m) Underlying profit
before tax
1
(£m)
Free cash flow
1
(£m)
What we are measuring
The growth in consumer revenue
generated across the Group
year on year. This includes spend
across all brands and includes
the sales made by Joint Venture
vet practices, rather than the fee
income received by Pets at Home.
Why is it important?
By growing consumer revenue
across all parts of our business
ahead of the market, we are
able to gain market share. In
particular, this means focusing
on the sales made by general vet
practices, whether they be under
the Joint Venture or Company
managedmodel.
Future plans
We expect our strategic
initiatives to deliver like-for-like
1
growth ahead of the market
across both the Retail and
Veterinary segments.
What we are measuring
The underlying profitability of
the Group as a result of our
strategic progress. We have
shown underlying profit before
tax
1
prepared on the same
accounting basis including
the clarification of IAS 38
Intangible Assets relating to
Cloud Computing Arrangements,
first adopted in FY22. Statutory
PBT in FY24 was £105.7m, down
13.7%YoY.
Why is it important?
By generating strong levels of
underlying profit, we are able to
demonstrate that our strategy
remains the right one, and that
we are delivering against our
strategic objectives.
Future plans
We expect the business to
sustain underlying profit
growth going forward in line
with our medium-term financial
framework.
What we are measuring
The cash available for return to
shareholders after investing in
the needs of the business.
Why is it important?
Delivering free cash flow allows
us to make strategic investments
in the business to fuel further
growth, whilst providing
an appropriate return to
shareholders.
Future plans
Generating free cash flow
from our vet business remains
a significant value creation
opportunity. This, alongside
further profit growth in Retail, will
enable Group underlying free
cash flow to grow sustainably in
the medium term.
1
Performance Measures (APMs) are
defined and reconciled to IFRS
information, where possible, on
pages 168 to 170.
Strong progress in
year one of our strategy
To support delivery of our strategy, we have a
clearly defined set of key performance indicators.
For more information:
www.petsathomeplc.com
Strategic Report Governance Financial Statements
09
2024 20242024 20247.8m £178 10.0% 3.3k
7.7m £168 6.7% 3.0k
7.3m £165 6.0% 3.0k
2023 20232023 2023
2022 20222022 2022
£178
+5.7%
3.3k
+10.0%
7.8m
+1.6%
10.0%
+330bps
Strategic performance
Number of active
Pets Club members
Average Consumer Value % of consumer revenue
1
from subscriptions
Clinical FTE
What we are measuring
Growth in the net number of
active members of our Pets
loyalty club. An active member is
defined as a consumer who has
transacted with the Group in the
last 52 weeks.
Why is it important?
By providing complete pet care
through a trusted brand, we
will attract more pet owners
to engage with the Group,
increasing our market share.
Future plans
We will continue to leverage our
integrated omnichannel pet care
model to make it convenient
and rewarding for consumers to
engage seamlessly across our
full platform of products, services
and advice.
What we are measuring
The average annual spend from
our Pets loyalty club members
across the Group. This includes
all spend across both the Retail
and Vet Group businesses.
Why is it important?
Our Pets loyalty club is a unique
asset providing data and insight
to help us increase share-of-
wallet, engagement and loyalty,
encouraging further spend across
our full pet care platform.
Future plans
Continuing to leverage our data
capabilities is a key underpin of
our future growth plans. We are
harnessing our deep actionable
insights to better serve the needs
of pet owners and deliver more
personalised content and offers
relevant to each individual pet.
What we are measuring
The proportion of total
consumer revenue contributed
by our three core subscription
offerings, namely veterinary
health care plans, flea and worm
subscriptions and our Easy
Repeat food auto ship service.
Why is it important?
The ability to offer consumers
convenient pet care through
subscription services is a key
competitive differentiator for
the Group.
Future plans
Generating sales from
subscriptions is an essential
part of being a pet care platform
and not solely a retailer. We will
continue to focus on growth in
this area of the business following
the launch of our digitalplatform
this year.
What we are measuring
The number of full-time-
equivalent vets and nurses
working across our vet practices
whether employed directly by
the Group or not.
Why is it important?
By creating additional clinical
capacity in our vet practices, it
enables us to meet the growing
demand from pet owners, and
further grow our vet business
through new practice openings
and practice extensions.
Future plans
By driving improvements in
recruitment, retention, and
wellbeing, we will ensure we
remain the employer of choice
for vets and nurses, helping
to underpin continued growth
across our vet business.
Pets at Home Group Plc Annual Report and Accounts 2024
10
Market Overview
Market driver:
A stable UK
petpopulation
The UK is a nation of pet lovers, with the
pet population now remaining stable, after
three years of significant growth, as more
people than ever before have sought the
companionship and support a pet can offer.
Our approach:
We cater for a variety of pet types at
accessible locations nationwide and online
and offer a wide range of pet products
and pet care services. We are increasingly
focused on introducing pet owners to all
parts of our pet care offering, nurturing
lifelong relationships with them.
Market driver:
Humanisation
of pets
Pets are increasingly being treated as a
member of the family with a continued trend
of selecting higher quality diets, an increased
focus on gifting and wellness, and a greater
desire to use the very best health care
treatments and supplements.
Our approach:
Through our in-store colleagues and online
content, we are able to explain the health
benefits of feeding your pet a better quality
diet, whilst competitive pricing makes
higher quality Advanced Nutrition pet
food increasingly accessible. With many
colleagues being pet owners themselves,
they understand the emotional bond
between pets and their owners.
Market driver:
Continued
channel shift
to online
Online penetration of the pet products
market continues its upwards trend. Price
competitiveness and convenience remain
important to the online shopping experience,
driven by ease of price comparison and the
different delivery options typically offered.
Our approach:
The recent launch of our digital platform,
investment in fulfilment capability, together
with competitive pricing, have enabled
us to take share of the online market.
However our approach extends beyond
just traditional online shopping, with a
multi-faceted omnichannel proposition
encompassing collect in-store, order in-store
and subscription plans, all of which offer
increased convenience for customers.
A growing pet
care market
The pet care market remains
resilient and in growth.
For more information:
www.petsathomeplc.com
Market trends spotlight: Market trends spotlight:
Gifting
Gifting is an increasing trend amongst pet owners, with
occasions such as Halloween, Valentines Day, and Easter, now
all major events in a pet owners’ calendar. We cater for this
through innovative products and highly curated ranges, many
of which are exclusive to Pets at Home. This creates a point of
differentiation versus competitors, whilst providing customers
with everything they need to celebrate these special occasions
with their pets.
Freeze dried food
The benefits of feeding your pet a raw diet is well understood,
however some pet owners remain unclear on storage
requirements and feeding processes. In response we
developed an exclusive freeze dried product that offers all the
nutritional benefits of raw food, but with the convenience of an
ambient product. By continuing to innovate, we can ensure we
are able to capture our share of these emerging trends.
Financial StatementsGovernance
11
Strategic Report
Market driver:
Advances in
veterinary
care
The veterinary care market continues to
advance through scientific research, and the
range of healthcare options available to pet
owners is increasing. Together with a growing
awareness and affordability of pet insurance,
more pet owners are able to do what is best
for their pet throughout their lifetime.
Our approach:
We aim to partner with the very best
veterinarians and vet nurses across our
network of Joint Venture and Company
managed practices to deliver the best
possible care to clients. By locating vet
practices across the UK, both inside Pets at
Home stores and in standalone locations,
and offering 24/7 access to trusted advice
through our telehealth business, we make
access to this high quality care easy and
convenient for pet owners.
£8.2bn
By sector value 2023
1
Accessories
2
£1.6bn
Food
2
£3.5bn
Veterinary
3
£2.8bn
Grooming £0.3bn
Market growth in 2023
1
Accessories
2
flat
Food
2
+7%
Veterinary
3
+10%
30%
23%
20%
UK pet care market
Our market share in 2023
1
(%)
Market share
23%
Our share of the UK
pet care market
Market growth
7%
Estimated total YoY growth
in UK pet care market
1 Source: Pets at Home data and UK market reports.
2 Includes online and instore spend from pet products.
3 Veterinary includes small animal general practices.
Pets at Home Group Plc Annual Report and Accounts 2024
12
Colleague
Stakeholder Engagement and s172 Statement
Headlines
Our colleagues are the beating heart of our business. They
bring our purpose to life and serve our customers and clients
throughout the year. We are committed to continuing to create
and deliver compelling pet care careers for all in an environment
where they can truly be themselves.
FY24 priorities
• Company culture and values
• Rewards and benefits
• Wellbeing
• Diversity and inclusion
• Sustainability
• Pet welfare
• Training and development
• Change management
How we engaged and outcomes
Led by the Chair, all Board members spent days out in stores
and practices during the year meeting with colleagues and
discussing key engagement priorities. The Chair has quarterly
catch ups with colleagues in practices, pet care centres and the
distribution centre. Four Non-Executive Directors spent time
at the annual colleague conference engaging with colleagues
on their experiences and views of the business. Natalie-Jane
Macdonald is the newly appointed NED with responsibility for
colleague engagement, and she hosted five listening sessions.
These followed the pulse engagement survey and focused on
key themes from it. The pulse engagement survey checked
colleague sentiment within the business during the year. The
business ensures regular communication with colleagues through
various channels including business area specific shoals, intranet
updates and CEO communications. These channels deliver
essential business updates and highlight engagement areas such
as diversity and inclusion, pet welfare, and sustainability. There is
a focus on involving and highlighting colleagues and teams from
diverse sectors within the business. Business-specific updates are
disseminated weekly across relevant departments.
The Company hosted its inaugural joint retail, vet and support
office conference, and organised a dedicated nutrition conference
for retail. Diversity and inclusion remain central to the Company’s
engagement strategy, championed by the Board and sponsored
by the CEO. Initiatives included events for National Inclusion Week
featuring internal and external speakers, ongoing campaigns to
encourage colleagues to provide diversity data, and establishment
of an inclusion advocates network. Building on the sustainability
listening campaign conducted in the previous fiscal year, a
colleague-led Planet Champions group was launched. All members
of the Executive Management team spend time with colleagues
in various operational settings at least once per period, ensuring
active engagement, listening to concerns, and identifying
opportunities for improvement across all areas of the business.
Looking ahead
• Continued focus on Diversity and Inclusion
• Colleague engagement
• Streamlined colleague communications through intranet
andcommunities
• Reward and wellbeing
• Pet-led expertise development
• Change management
Engaging
with our key
stakeholders
Section 172(1) of the Companies Act 2006 requires each Director to
act in the way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its members as
a whole and in doing so have regard (amongst other matters) to the:
• Likely consequences of any decisions in the long term;
• Interests of the Company’s employees;
• Need to foster the Company’s business relationships with
suppliers, customers and others;
• Impact of the Company’s operations on the community and
environment;
• Desirability of the Company maintaining a reputation for high
standards of business conduct; and
• Need to act fairly between members of the Company.
Effective stakeholder engagement is fundamental to good
governance. Stakeholder engagement takes place at all levels
within Pets and is an important part of how we are delivering on our
purpose of creating a better world for pets and the people who love
them. The Board continues to engage directly and indirectly with
its priority stakeholders. There are different processes across the
business to ensure stakeholder considerations are embedded into
Board decision-making.
This engagement helps provide a better understanding of
stakeholder’s points of view and the impact the Group has on
their day-to-day lives and communities. Read more about the
engagement of Board members with stakeholders in the Board
reports on pages 28 to 82.
The Board has identified its key stakeholder groups as being:
(1) colleagues, (2) customers, (3) charities and communities, (4)
government and industry regulators, (5) investors and (6) suppliers.
Strategic Report Governance Financial Statements
13
Customer Charity and Community
Headlines
Our purpose, creating a better world for pets and people who love
them, provides us with a continual guiding light to help us understand
our consumers. It helps us support and guide them through their pet
care journey, as well as anticipating their future needs and wants
before they realise them using our data-led approach. Our customers
would do anything for their pets and so would we.
FY24 priorities
• Omnichannel
• Personalised experience
• Availability and seamless delivery of products
• Value for money
• Digital capability development
• Tailored advice and services
• Exceptional clinical care
How we engaged and outcomes
We continually invest in consumer insight and talking to our
consumers daily to understand their needs and get their
feedback, and all senior stakeholders, including the Board
are critical in delivering this. Our customer panels provide us
with qualitative and quantitative insight from a diverse set of
backgrounds. Thousands of customers participated in these
during the year. Polestar, our new omnichannel platform and
Pets Club have been developed from consumer feedback and
consistent testing and learning with consumers as we built
the design and features as an example. This ongoing iterative
development approach will continue so our customers inform
the development as much as us. Following consumer feedback
our longstanding market-leading consumer loyalty programme
rebranded to Pets Club. This is helping our customers get more
from it and more clearly understand the benefits to their selected
community charity partners.
We launched new consumer satisfaction surveys to our retail
and grooming customers, and vet clients. Customer services are
providing quick and direct feedback on our consumer experience
at pet care centre and vet practice level and our store and vet
teams are now able to quickly and easily see their consumer
feedback, as well as colleague recognition, allowing them to
consistently improve their service and celebrate their teams’
customer service. Board customer closeness events were held
bringing a group of consumers in to meet our Board and provide
direct feedback and insight on their needs. We have a panel of
c15,000 consumers on our ‘We’re all Ears’ consumer panel who we
talk to on a regular basis, to understand their consumer sentiment,
how they’re feeling, attitudes to pet ownership and feedback on
our ranges and products.
Looking ahead
• Continued focus on value and own-brand
• Tailored pet-led journey through our leading ecosystem
• Retail colleague and vet clinicians advice and expertise
• Ongoing omnichannel focus and development of
digitalcapabilities
Headlines
Our number one value has always been ‘we put pets first’. It’s in
the DNA of our business and always will be. We are committed to
improving the life of every pet in the UK and to improving the lives
of the people who love them. We do this through the work of our
Foundation, our Pets Club, community work and our incredible
colleagues and partners.
FY24 priorities
• Pet rescue support
• Community support at point of need
• Supporting and championing the pet, people bond
• Supporting local communities
How we engaged and outcomes
Through our Foundation and Pets Club we raised over £9m for
causes that support pets and the people who love them. This
money was donated to over 800 community charity partners, as
well as national and local rescues. The Pets Foundation remains
the largest donor to pet rescues in the UK and our continued
focus on multi-year pet-people grants. Our second Summer
fundraiser for Hearing Dogs for the Deaf raised £580k bringing
the total raised for the charity in 14 months to £1.1m. Our pet food
bank partnership with the Blue Cross now has pet food drop off
points in over 400 pet care centres which are partnered with a
foodbank within 15 miles of the store. All pet care centres continue
to support charities which they select. These are typically pet
rescues and they benefit from fundraising campaign donations
and time in stores. Stores support several other community
initiatives at their discretion. Attendance at industry events,
including roundtables, conferences, Government events and more
means we are continually listening to all key stakeholders in our
sector and the wider charitable industry. Regular conversations
with senior Board members, our trustee board and relevant
stakeholders in the business mean we are always engaging.
Our trustee board represents expert voice in the business and
wider industry. Their views and opinions give us the right level
of challenge and support. The Pets at Home Board spent time
with our charity team at Company conferences and the Chair
spent a day visiting rescue partners with our Head of Charity
andCommunity.
Colleagues volunteer annually for community projects of
their choice and over 16,000 hours were donated this year. All
bonusable colleagues can take one day a year for community
volunteering.
Looking ahead
• Ongoing support of pet rescues
• Strategic partnerships and grants to keep pets with the
people who love them
• Community support led by our colleagues who know their
communities best
Pets at Home Group Plc Annual Report and Accounts 2024
14
Pets at Home Group Plc Annual Report and Accounts 2024
Stakeholder Engagement and s172 Statement continued
At Pets at Home,
animal welfare
is at the heart of
everything that we
do. We consistently
work to improve the
lives of pets across
the country.
Government and Industry
Headlines
Industry bodies influence the regulatory environments in which
our business operates and lobby on our, and our industry’s, behalf
in critical areas. Government directly influences our environment.
Maintaining close relationships means we keep the critical two-way
dialogue going to inform, support and communicate our positions,
help us stay aware of where policies may impact our strategies or
people and to lobby in areas of importance, such as animal welfare,
sustainability, veterinary medicines or human capital consultations.
FY24 priorities
• Key government consultations
• Animal welfare
• Veterinary legislation
• Health and safety
• Sustainability
How we engaged and outcomes
We consistently work to improve the lives of pet welfare, but
often find that a key barrier to this is the requirement for better
education on how to care for pets. Through our industry and
government engagement we’re working to change that. Meetings
with external stakeholders including key MPs, and policy advisers
happen throughout the year in our pet care centres, at Westminster
and at industry events, where we engage directly and through our
industry representatives including, the British Retail Consortium
(BRC) and, British Veterinary Association (BVA). We have undertaken
direct departmental engagement to raise the need for better pet
welfare education. This has included meetings with key officials in
the Department for Environment, Food and Rural Affairs, as well
as an appearance before the Environment, Food and Rural Affairs
Committee by our former Chief Veterinary Officer as part of their
evidence session on Pet Welfare and Abuse. We were also involved
in a roundtable discussion ahead of the second reading of Selaine
Saxby’s Private Member’s Bill – Animal Welfare (Import of Dogs,
Cats, and Ferrets) Bill. The CMA’s review of the veterinary services
sector for household pets providing us with further opportunity
to articulate and present the benefits of our unique joint venture
model, as well as ensuring that the voices of our practice owners
and their veterinary professionals are represented in the information
we share with the CMA and our clients.
We continue to be active members of the BRC, participating
in all their specialist groups and putting our name and voice
to key consultations involving the retail sector. Areas of focus
have included crime rates, wages, immigration law changes
and sustainability. We remain chair of one of the five net-zero
pathways for BRC and active participants in the other four.
Looking ahead
• Engagement with the next steps in the CMA’s market
investigation (announced 23 May 2024) into the veterinary
sector looking to ensure a fair outcome for all.
• Represent the views of our colleagues and consumers in key
animal welfare and veterinary reforms
• Immigration law changes will remain a core regulatory
lobbying area to ensure we can attract talent to our business
to help deliver our strategy
• Contribute to relevant retail industry lobbying areas, for
example through our membership of the BRC
Strategic Report Governance Financial Statements
15
Investors
Headlines
In order to shift perception of Pets at Home from a retailer to a
complete pet care platform, it is vitally important to engage with
investors to explain our unique business model and articulate the
future strategy. We have engaged investors around specific topics
over the course of the year including our sustainability agenda,
capital allocation and our refreshed strategy and vision.
FY24 priorities
Providing sufficient context and clarity surrounding key events in
the year, namely the transition to our new distribution centre, and
the CMA review into the veterinary sector.
How we engaged and outcomes
The CEO, CFO and Investor Relations team are involved in
ongoing interaction throughout the year via conference calls,
meetings and small round table events. We have also held a
number of site visits to our pet care centres and vet practices as
part of our ongoing engagement, as well as attendance at investor
conferences both in the UK and overseas. A strategy update
was hosted alongside our full year results, featuring a range of
presentations from senior management.
We have positive, ongoing and transparent dialogue with our
shareholder base and we value feedback and insight which is
considered by the Executive Management Team. The investor
website, which has been refreshed and relaunched in the year, is
kept updated with all of the latest announcements and provides
information about the Group and its activities. We have had
extensive dialogue with investors following the announcement
by the CMA that they are conducting a review into the veterinary
sector, sharing our views on the CMA’s concerns and how our
business is positioned relative to them.
Looking ahead
• As we continue to execute our strategy in the year ahead,
it is crucial we keep investors informed of any significant
developments
• Likewise, as the CMA have now announced a market
investigation (on 23 May 2024), it is likely to continue at least
into the next year. We will continue to engage with investors
to ensure they are fully aware of the impact this could have
onthe business
Suppliers
Headlines
Strong, stable supplier relationships built on trust are essential
to all businesses. As we look at our current challenges and
opportunities and those in the future, such as climate change and
continued technological innovation, it is more important than ever
that we engage effectively with our suppliers. Obtaining value
for our business, security of the supply chain and investment in
product innovation, are all key areas.
FY24 priorities
• Development of long-term partnerships
• Supplier agreements which meet the needs of all parties
• Focus on margin
• Security of supply chains
• Growth opportunities
• Responsible product manufacturing and sourcing
• Launch of supplier climate action programme
How we engaged and outcomes
Supplier engagement remains critical to the business and
Board. From day to day contact, to top to top meetings we aim
to ensure that the needs of all are considered but that critically
our suppliers believe in our business and our purpose, helping
us to create a better world for pets and the people who love
them. The annual supplier conference for all priority suppliers is
attended by key internal stakeholders, including Board members.
It provides an important opportunity to update on our business
priorities and shared objectives. Supplier codes of conduct, our
responsible sourcing handbook and our supplier climate action
programme are examples of our engagement with suppliers
to deliver responsible sourcing, manufacturing and business
practices. Our long-term partnership announced with Cranswick
Plc in FY23 is now well established with more own-brand products
moving to them. Our investment in Meatly is an example of
investing and working with suppliers to secure a sustainable
future for all. Top to top meetings with high priority suppliers were
revised and relaunched during the year with a focus on long-term
partnerships, innovation, value and sustainability.
Responsible sourcing and manufacturing in our supply chain
from a human rights perspective, raw materials and carbon and
nature-based impacts remains a key priority. We have clear
modern slavery policies for all suppliers and our responsible
sourcing handbook details our requirements from a raw materials,
climate action, packaging and human rights perspective. In FY24
we increased our headcount in this area, including hires in our
East Asia office. Further details can be found through our Modern
Slavery Statement.
Looking ahead
• Price and security of supply
• Delivery of value and innovation for our customers
• Responsible product sourcing and manufacturing
• Opportunities for long-term partnerships
• Development of our category leading own-brand ranges
• Progression of supplier maturity in our supplier climate
actionprogramme
Pets at Home Group Plc Annual Report and Accounts 2024
16
Pets at Home Group Plc Annual Report and Accounts 2024
Sustainability Review
Our Better World
Pledge
Strategy overview
Our sustainability approach was originally
developed in FY20; during FY23 we refreshed
the strategy and FY24 has been the first full
year of implementing this updated strategy.
We call it ‘Our Better World Pledge’ and it
articulates how we deliver our purpose ‘to
create a Better World for Pets and the People
who love them’. We are incredibly proud of
our achievements and ambitions, it creates
value for all of our stakeholders and sets us
apart from other pet care and veterinary
businesses.
Our materiality assessment ensures that
we prioritise and focus on issues that are
important for environmental or social reasons,
where we are best placed to act and where
we can make a significant impact. We have
aligned our strategic priority areas with
our business strategy to make sure we are
integrating our approach. Our strategic
focus on sustainable pet food, advocating
for pet welfare, and creating rewarding and
sustainable careers in pet care for everyone,
are good for the planet, pets and people
but also integral to the business’ financial
sustainability. This alignment is key to driving
engagement and action and ultimately
achieving our goals.
This year we are delighted with the progress
that we have made launching new initiatives
for our colleagues and new programmes
with our suppliers as we develop a
deeper understanding of our value chain
environmental impacts. This year we have
been focused on implementing the key
programmes of the strategy and embedding
involvement across the organisation.
Embedding our strategy in
ourbusiness
We continue to have a fantastic response
to our volunteering programme called
Our Better World Pledge days, which has
remained an underpin to annual bonus for
relevant colleagues. Over 16,000 hours have
been donated during the year which is an
increase of over 40% vs the previous year
andover 2,400 colleagues have participated.
From FY24, the annual bonus criteria has
included a sustainability target representing
10% of the maximum award. The Directors’
Remuneration Report from page 66 contains
more details.
During the year, we have launched planet
advocates to embed this important area
further across the business, providing
collaboration and education opportunities
for the advocates and a listening channel for
ideas and feedback.
Our revolving credit facility, agreed in March
2022, is linked to sustainability targets. We
now have financial incentives (or penalties)
to accelerate our work on pets, people and
planet through targets focused on carbon
reduction, supporting pets in need and
community action. In the second year of this
scheme we have achieved all three targets as
summarised in the table below. More details
on our performance can be found on our
corporate website.
Sustainability linked revolving credit facility: summary of FY24
performance against Sustainable Performance Targets (SPTs)
SPT ESG Topic SPT description Measurement
FY24
target
FY24
actual Achieved
SPT 1
Scope 1 and 2
carbon emissions
performance
Carbon emissions
(Scope 1 and 2
tCO
2
e) intensity
Tonnes CO
2
e
divided by Group
Statutory revenue
18.1 15.7 Yes
SPT 2
Lifelines pet
charity scheme
Monies raised
through the VIP
lifelines scheme
£m £2.98m £3.30m Yes
SPT 3
Community
volunteering
Total hours
donated through
‘Better World
Pledge Days’
programme
Hours 12,814 16,453 Yes
Strategic Report Governance Financial Statements
17
For more information about
the Planet pillar progress see our
sustainability report on page 6
For more information about
the Pets pillar progress see our
sustainability report on page 18
For more information about the
People pillar progress see our
sustainability report on page 30
Planet
To make pet care
environmentally
sustainable
Pets
To improve the
life of every pet
in the UK
People
To be the best employer
and developer of pet
care talent
By leading in sustainable
pet food:
– Environmental impacts on carbon,
land use, water and nature
– Innovative, sustainable packaging
– Nutritional needs met, affordably
By being the leading advocate for
pet welfare:
– Adopting the highest welfare and
clinical standards for pets in our
care
– Providing pet owners with the best
products, service and advice
– Using our voice and expertise to
advocate for pets
– Being the largest grant giver to pet
charities in the UK
By creating rewarding,
sustainable careers in pet care
for everyone:
– Continuous investment in pet care
expertise
– Compelling clinical careers and
development opportunities
– Colleagues fully representing our
diverse communities
Our Purpose
To create a better world for pets
and the people who love them
Sustainability strategy: Our Better World Pledge
Highlights
– Launch of Manufacture 2030
platform, a carbon reporting and
management tool, to our priority
suppliers
– Pet food carbon foot printing
is underway with the first 60
products completed
– Woodland Trust pet memory
scheme has completed its third
year, over £700k donated to date
which has created, restored and
protected over 6,000 acres of UK
native woodland
– Following the award winning
Big Listen, a colleague-wide
environmentally-themed listening
programme in 2023, planet
packs have launched to every
veterinary practice and pet care
centre, to support them to be
environmentally focused on waste
and energy use, and we now have
Planet Champions in place across
the business
Highlights
– Our charity ‘The Pets Foundation’,
raised over £5.9m during FY24 and
reached a cumulative total over
£55m of funds raised since forming
in 2006
– The ‘Pets Club’ loyalty scheme
raised ‘lifelines’ worth over £3.3m.
‘Lifelines’ are points earnt through
spending in our pet care centres,
vets or groomers that are then
converted into vouchers and
donated to local and national
petcharities
– Pet food collection points are now
in all stores in partnership with
the Blue Cross. During the year
donated pet food has enabled over
1.3m pets to be fed for one day
Highlights
– Increase of 10% in our vet nurse
apprentices, and our vet graduate
programme has 266 graduates
across both cohorts
– 815 colleagues have been trained
to pet care expert level and we
have over 1850 suitably qualified
persons (SQP) working in our pet
care centres
– Over 6,000 colleagues have
completed the four modules
of our nutritionist core training
programme and over 1,400 have
completed the five modules
of the intermediate level
nutritionisttraining
– Development of our diversity data,
meeting our target of over 80%
data completion rates for support
office and retail based colleagues
– Increased investment in our
Human Rights team with the
recruitment of an in house
ethical expert in our Hong Kong
sourcingoffice
Our purpose
Pets at Home Group Plc Annual Report and Accounts 2024
18
Sustainability Review continued
Reducing our scope 3 carbon emissions
remains our biggest priority within the planet
pillar and we will continue to engage our
suppliers on the management of carbon in
our product supply chains through their
involvement in the Manufacture 2030
programme. The work of understanding and
then managing the reduction of carbon in pet
food will be focused on embedding our pet
food sustainability principles and guardrails
into new product development and product
listings and in our ongoing programme of
carbon foot printing our own brand food
ranges. We will also develop our pet care
accessories’ sustainability strategy which will
connect changes in materials into carbon
savings that will feed into our net zero carbon
reduction pathways and transitionplan.
There remain challenges that face
businesses like ours to the delivery of our
emissions reduction targets. For example
the development of battery technology and
supporting charging infrastructure for heavy
goods vehicles, the adoption of regenerative
and more sustainable agricultural practices
so we will also collaborate on factors that are
outside of our direct control but remain vital
to deliver our emissions reduction targets.
As we look ahead to this year
we have some clear priorities
outlined which will enable the
implementation of our strategy.
Within the Vet Group we will build on the
successful launch of the anaesthetic gas
stewardship programmes and developing
our new clinical academy which will help
us to create a sustainable pipeline of
highly engaged vet and nurse talent, with
the clinical and behavioural skills and
experiences to create leading clinical teams.
We will continue our involvement in a multi-
year ground-breaking antimicrobial usage
research project in partnership with the
Royal Vet College and Vet Compass. This
project will focus on improved stewardship
in veterinary antimicrobial usage across all of
our practices using a blended qualitative and
quantitative approach.
The Pets Foundation will continue to be
there for pets when they need us through
our fundraising and grant programme
and to support programmes that support
people through pets. We will be focused
on refining our impact measurements from
our donations. Now that we have national
coverage of pet food banks in every pet care
centre, in partnership with Blue Cross, we
will be focused on maximising the customer
donations that we receive that can be passed
on to local food banks.
From a people perspective we will be further
developing our market leading pet expertise
programmes. The next cohort of our ‘Pet Care
Experts’ programme will begin their nine-
month learning programme, and our unique
nutrition training programme will continue
to be rolled out to all colleagues involved in
pet care across our ecosystem, including our
clinical colleagues.
We are focused on increasing the
representation of ethnic diversity amongst
our colleagues to better connect with diverse
pet owners and reflect the communities
we work in. We will be further developing
our inclusive recruitment processes, and
inclusive leadership education to enable
our leaders and managers to fulfil new
representation goals in an authentic and
credible way. We’ll be monitoring progress
through our enhanced diversity data capture
and reporting.
Our standalone sustainability report provides
stakeholders with a detailed overview of
our sustainability strategy including our
performance against our refreshed targets.
The ESG Committee report which includes
our TCFD statement is on page 52.
Read more in our:
2024 Sustainability Report
Looking
ahead
Strategic Report Governance Financial Statements
19
Chief Financial Officer’s Review
Financial review of FY24
The FY24 period represents the 52 weeks
from 31 March 2023 to 28 March 2024. The
comparative period represents the 52 weeks
from 1 April 2022 to 30 March 2023.
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 general
practices and our veterinary telehealth
business) and Central (includes Group
costs and finance expenses).
Revenue
Consumer revenue
#
grew 6.9%, in line with
of our medium-term ambition, to £1.9bn
(Retail £1.3bn, Vets £0.6bn), with all channels
remaining in growth.
Group statutory revenue in FY24 grew 5.2%
to £1,476.6m (FY23: £1,404.2m) and like-for-
like (LFL) revenue grew 5.1%
#
.
Retail revenue grew 4.0% to £1,330.1m (FY23:
£1,278.7m), with LFL revenue growth of 4.1%
#
.
This includes the short-term disruption to our
in-store sales performance in Q2 due to the
transition to our new DC, which impacted Q2
LFL by c3%.
A resilient performance
whilst delivering
our strategy
Outside of this, the shape of performance
has remained broadly consistent throughout
the year with strong growth and share gains
in food, but softer trends in discretionary
accessories as noted previously. Performance
in Q4 was in line with our expectations and
as previously guided.
Vet Group revenue was up 16.8% to £146.5m
(FY23: £125.5m) and LFL revenue grew
by 16.5%
#
. Total Joint Venture fee income
increased by 15.7% to £89.3m (FY23: £77.2m)
and revenues from company managed
practices increased by 18.7% to £44.6m (FY23:
£37.5m). Revenue of £3.2m was recognised
in relation to The Vet Connection, our
telehealth business.
Gross margin
Group gross margin
1
decreased YoY by
123bps to 46.8% (FY23: 48.0%).
Gross margin
1
within Retail was 46.2%, a
reduction of 137 bps over the prior period
(FY23: 47.5%), predominantly driven by food
growing faster than accessories (76bps
impact on Group gross margin), as well as a
foreign exchange impact as our contracted
$ rate was lower YoY (90bps impact on Group
gross margin). We have now hedged c80%
of our foreign exchange requirements for
FY25 at an average rate of $1.25 (FY24: $1.19),
meaning FX will act as a slight tailwind to
gross margin in the year ahead.
FY24 has been a pivotal year for
the business and we have delivered
a resilient performance whilst
making great progress towards
our strategy of building the world’s
best pet care platform.
Mike Iddon, CFO
FY24 Financial highlights
Revenue
£1,476.6m
+5.2%
Statutory PBT
£105.7m
(13.7)%
Underlying PBT
#
£132.0m
(3.2)%
Dividend per share
12.8p
Pets at Home Group Plc Annual Report and Accounts 2024
20
Chief Financial Officer’s Review continued
Gross margin
1
within the Vet Group
decreased by 53 bps to 52.7% (FY23: 53.3%)
including a £2.2m impact from a planned
one-off marketing investment into our TV
brand launch campaign, which is charged
against gross margin. Excluding this impact,
the strong sales growth across our Joint
Venture estate against a relatively fixed
cost base, as well as the YoY improvement
in performance in our company managed
practices, helped deliver a 92bps YoY gross
margin expansion.
Operating costs
Operating costs
2
of £584.7m (FY23: £550.0m)
grew at 6.3% including a £13.3m YoY increase
in non-underlying costs. In FY24, we incurred
a total of £26.2m of non-underlying operating
costs (FY23: £12.9m). Before non-underlying
costs, operating costs
2
grew 4.1%.
We continue to maintain a tight operational
grip on industry-wide cost headwinds, most
notably in FY25:
– The 9.8% increase in National Living
Wage, a c£16m unmitigated cost
headwind to the business.
– The removal of business rates relief as
announced in the Autumn Statement,
ac£2m cost to the business.
As well as directly mitigating these costs
where possible, we are also proactively
offsetting them through our ongoing self-
help initiatives. Our programme of store
rent reductions is progressing well; where
we have actively sought to reduce the rent
at property lease events, we have achieved
an average reduction of 20%. We expect to
complete 40 lease renegotiations in FY25.
We also continue to target efficiencies across
consumables and goods not for resale, and
we are driving further productivity gains
across our stores and supply chain, using
technology to lower our overall cost to serve.
Finance expense
The net finance expense, including interest
charged on lease liabilities, reduced to
£13.6m (FY23: £14.3m). Of this, £13.3m
(FY23: £12.4m) related to interest expense
on leaseliabilities.
Profit before tax (PBT)
Group statutory profit before tax was
£105.7m (FY23: £122.5m), in part due to a
£12.4m YoY increase in non-underlying costs.
In FY24 we incurred a total of £26.3m of non-
underlying costs (£26.2m operating costs,
£0.1m interest), of which £21.5m relates to the
transition to our new distribution centre. In
FY23, non-underlying costs totalled £13.9m
(£12.9m operating costs, £1.0m interest), of
which £11.1m related to our new DC.
Group underlying profit before tax was
£132.0m
#
(FY23: £136.4m), with underlying
profit margin
3
of 8.9% (FY23: 9.7%), impacted
by lower profits in our retail business, offset
by a significant step up in profits in our
vetbusiness.
Retail statutory profit before tax was £64.8m
(FY23: £87.7m). Retail underlying profit
before tax was £87.4m
#
(FY23: £98.8m) with
underlying profit margin
3
of 6.6% (FY23:
7.7%) reflecting the gross margin impacts
described above as food grew ahead of
accessories, higher distribution costs as we
transitioned to our new DC, and increased
colleague costs following the 9.7% National
Living Wage increase in April.
Vet Group statutory profit before tax was
£58.8m (FY23: £51.3m). Vet Group underlying
profit before tax was £61.6m
#
(FY23: £51.3m)
with underlying profit margin
3
of 42.0%
(FY23: 40.9%), driven by ongoing strong sales
performance as we continue to improve
clinical capacity.
Central costs of £17.9m (FY23: £16.5m)
includes payroll costs for Group functions,
professional fees, and finance expenses.
Underlying central costs were £17.0m
(FY23: £13.7m).
Taxation, profit after tax, and EPS
Total tax expense was £26.5m for the period,
an effective rate of 25%. Statutory profit after
tax decreased by 21.4% to £79.2m (FY23:
£100.7m). Statutory basic earnings per share
(EPS) were 16.6 pence (FY23: 20.5 pence) and
underlying basic earnings per share
#
were
20.7 pence (FY23: 22.8 pence).
Working capital
The movement in working capital
4
for FY24
was an outflow of £4.6m (FY23: £19.8m inflow)
reflecting a more normalised working capital
position. In the prior year, working capital
was supported by three main factors; growth
in GNFR payables relating to the timing
of invoicing and project spend, a growth
in provisions built ahead of closing our
legacy DCs, and a reduction in receivables
attributable to a significant decrease in
operating loans due to strong performance
in our vets.
Inventories decreased by £11.1m YoY
reflecting in part the unwind of the stock
position built ahead of the transition to
our new DC last year, along with tighter
stockcontrol.
Payables decreased by £5.3m YoY primarily
driven by the reduction in inventory position.
Receivables increased £6.3m YoY, partly
driven by timing differences in supplier-
funded marketing activity. Within receivables,
the strong financial performance across our
Joint Venture vet practices contributed to
the gross value of operating loans reducing
by £5.0m to £8.8m from £13.8m at FY23
yearend.
Investment
Capex was £42.9m (FY23: £75.3m) in the
year as we continue to move past the period
of peak investment in our strategy.
Investment was focused on three strategic
growth areas; £9.5m (FY23: £7.9m) into
digitising the business, a £6.4m (FY23:
£43.7m) investment as we completed
our new distribution centre, and £19.6m
(FY23: £17.5m) to continue with our store
refitprogramme.
Capital investment in the year was below our
original plan due to three primary factors;
the rephasing of our store development
plan, as well as adopting a more capital-
light approach to store refits; timing impact
of opting for a lower cost, highly efficient
technology in our solar panel installation
in our new DC; and a change in phasing
regarding our new practice management
system, however total capital investment
over the course of our medium-term plan
isunchanged at c£280m.
In addition, £2.7m investment in vet
practices, initially included in our capex
guidance, is now classified as investments.
This relates to investments in refits,
extensions and advanced capabilities.
The equivalent figure in FY23, which was
includedwithin capex, was £0.4m.
Free cash flow
Free cash flow after interest and tax, but
before acquisitions was £69.0m
#
(FY23:
£98.2m). The decrease in free cash flow
compared with the prior year primarily
reflects the underlying profit decline, and the
normalisation in working capital, offset in part
by lower capex as we move past our peak
investment phase.
Strategic Report Governance Financial Statements
21
Free cash flow
#
(£m) FY24 FY23
Net cash flow
from operating
activities 210.0 251.2
Lease payments (68.4) (68.9)
Cash receipts
from lease
incentives – 22.0
Debt issue costs (0.9) (0.1)
Net cash capex (48.5) (77.2)
Net interest (12.4) (14.7)
Purchase of own
shares (10.8) (14.1)
Free cash flow
#
69.0 98.2
The cash and cash equivalents at the end of
the year were £57.1m, down £120.9m year-on-
year (FY23: £178.0m).
Divisional free cash flow FCF (£m)
Retail 27.7
Vet Group 58.3
Central (16.9)
Group
#
69.0
The cash generation described above,
enables us to maintain our dividend
payment and fund the £50m share buyback
programme completed in the year. Our net
cash position
#
at the end of the period was
£8.8m (cash £57.1m, debt £48.3m), and total
indebtedness
#
was £372.0m post lease
liabilities. This represents a leverage ratio
#
of (0.1)x underlying EBITDA or 1.5x on a lease
adjusted basis.
Net cash (£m) FY24 FY23
Opening net
cash
#
54.7 66.0
Free cash flow
#
69.0 98.2
Equity dividends
paid (60.7) (58.7)
Share buyback (50.3) (50.3)
Acquisitions (2.4) (0.5)
Disposals (1.5) –
Closing
net cash
#
8.8 54.7
Pre-IFRS 16
leverage
#
(0.1)x (0.3)x
Lease adjusted
leverage
#
1.5x 1.5x
The Group’s underlying cash return on
invested capital (CROIC)
#
in the period
decreased to 19.4% (FY23: 22.7%) having been
through a period of heightened investment
as we build our digital platform and bring our
new DC onstream, with the cash benefits to
come in future years.
Capital allocation
Our capital allocation policy prioritises
investing cash in areas that will expand the
Group and deliver attractive returns. These
areas include organic investment (into our
digital capability, our infrastructure, and our
store refit programme), our dividend policy
(which approximates to 50% of earnings per
share) and value-accretive opportunities
including M&A (which are strategically
aligned to expanding our platform in core
and adjacent markets). We will return to
shareholders any surplus cash after these
items, and it is the Board’s intention to review
this on an annual basis. Having completed
£100m in share buybacks over the past two
years, we have today announced a further
£25m buyback for the year ahead.
# Alternative Performance Measures (APMs) are defined and reconciled to IFRS information, where possible, on pages 168 to 170.
1
Gross margin is calculated as gross profit as a percentage of revenue. Refer to Note 1 of the accounts for an explanation of the prior year restatement.
2
Operating costs are the sum of selling and distribution expenses and administrative expenses. Refer to Note 1 of the accounts for an explanation of the prior year restatement.
3
Underlying profit margin is calculated as underlying profit before tax as a percentage of revenue.
4
Working capital is the sum of YoY movements in trade and other receivables, inventories, trade and other payables, and provisions.
5
Lease payments are cash payments for the principal portion of the right-of-use lease liability.
6
Net cash capex is proceeds from the sale of property, plant and equipment less costs to acquire right-of-use assets and acquisition of property, plant and equipment and other
intangible assets.
7
Net interest is interest received less interest paid, interest paid on lease obligations, and debt issue costs.
8
FY24 includes £1.0m investment in Good Dog Food (FY23: £nil) and £1.5m (FY23: £0.5m) investment in certain company managed practices.
9
FY24 disposals relates to the disposal of certain company managed practices as we converted them to joint venture partnerships.
Dividend
The Board has recommended a final dividend
of 8.3 pence per share, taking the total
dividend for the year to 12.8 pence per share.
Dividends have been maintained in the year
despite the YoY decline in EPS, resulting in a
payout ratio of 61%. In the years ahead we will
gradually move our payout ratio closer to the
50% stated in our capital allocation policy.
The final dividend will be payable on 16 July
2024 to shareholders on the register at the
close of trading on 7 June 2024.
TCFD
During the year we have further integrated
our ESG strategy into our financial planning
with the development of the quantification of
climate change risks as outlined in our TCFD
statement on pages 59 and 60. This follows
on from including sustainability metrics into
our revolving credit facility from 2022 as
outlined on page 16.
Mike Iddon
Chief Financial Officer
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
22
Risk Review
Effective risk management is an integral part
of running our business and is fundamental
to us achieving our strategic objectives,
implementing core business initiatives, and
protecting long-term stakeholder value.
A practical
approach
Principal
risks and
uncertainties
Board
– Sets strategy.
– Collectively responsible for managing risk.
– Sets tone from the top.
– Sets risk appetite, risk tolerance and determines the nature and level
ofprincipal risks.
Executive Management Team (EMT)
Collectively responsible for identifying and managing risk, and monitoring
riskexposure.
Audit and Risk Committee (ARC)
Oversee the Group’s internal
control and risk management
frameworks.
– Provide oversight and
challenge to the assessment
of principal, corporate, and
emerging risks
– Advises the EMT on risk
appetite
Group Internal Audit
Provides objective assurance
to the Board and ARC on
the effectiveness of the risk
management framework.
– Has a direct reporting line to
the ARC
– Risk based internal audit plan
approved by the ARC
– Respond to new areas of risk
or change and re-prioritise
plan throughout the year
Business assurance functions
Monitor compliance with
Company policies and
procedures and provide
assurance over business
controls to the Management
Committees and the EMT.
Operational Risk
Monitor adherence with risk
appetite framework, implement
risk management processes and
risk framework improvements.
Operational senior management
& risk champions
Ensure risk management
process is adhered to.
Management Committees
Provide oversight over the
management of business level
risks.
Corporate
risks
Business
risks
Top down
Oversight, identification, assessment
and mitigation of Group level risks
Bottom up
Identification, assessment and mitigation
of risk across key business areas
Escalation
For further details about key roles and responsibilities within our governance structure, please see the Governance report on page 33.
First line of defence Second line of defence Third line of defence
Risk management
The Board is responsible for the nature and level of the principal risks we are willing to take and have overall responsibility for the Group’s risk
and internal control frameworks and for reviewing the effectiveness of these at least annually. As such they have approved our principal risks as
set out on pages 24 to 32.
Risk Governance
The diagram below provides an overview of our risk governance framework and responsibilities for risk management that support this framework.
Strategic Report Governance Financial Statements
23
Risk management process
We take a practical approach to risk
management. Our process has five steps,
integrated across the three lines of defence
and our governance framework. Having a
top down, bottom-up approach gives us a
comprehensive view of risks, either current or
emerging, their status and the effectiveness
of mitigation plans. An appropriate level of
oversight and assurance is provided through
this process.
1&2. Identify and assess – Each business,
function and key project team identify their
current and emerging risks considering
their strategic plan, objectives, and external
environments. A standardised risk scoring
methodology is used across the Group to
analyse risks. This helps the escalation and
consolidation of risks into a Group-wide view.
Horizon scanning exercises are conducted
with the senior management team as part of
the annual strategy and business planning
cycles and risk management processes.
3. Manage – Each business, function and
key project maintain detailed risk registers
and mitigation plans which are reviewed
and approved by their leadership teams and
the appropriate Executive Management
Team (EMT) member three times a year.
Each principal, corporate and emerging risk
is owned by a member of the EMT who is
accountable for confirming that adequate
controls and necessary mitigation plans are
in place to bring the risk within an acceptable
tolerance. A range of risks which are not
currently considered significant enough to
be included on the corporate risk register are
managed on an ongoing basis.
4. Monitor – Each risk register is reviewed
by the relevant senior management team at
least three times a year before submission
to the EMT. Threats on the watch list are
reviewed alongside the risk registers. Risk
scoring and key risk indicators are also
reviewed to track the risk and progress of
mitigation plans. Assurance is obtained from
across the three lines of defence to support
this process. Risks are also reported to
relevant management committees, such as
the Environmental, Social and Governance
Committee (ESG Committee).
5. Report – The Corporate risk register is
reported to the EMT, Board and Audit and
Risk Committee (ARC) three times a year.
Risks are considered both independently and
collectively alongside emerging risks to fully
understand their dependencies and potential
impact on the business. The ARC conducts
deep dives in key risk areas with the EMT and
functional leadership teams. The principal
risks and uncertainties are submitted to the
ARC ahead of final review and approval by
the Board.
Emerging risks and opportunities
We define emerging risks as those that can
potentially have a significant impact on the
Group in the medium to long term, where the
full extent of the scale, impact, or likelihood
may not be fully understood but needs to
be tracked. Identification and review of
emerging risks and opportunities follows our
risk management process described above.
Emerging risks considered a priority are
summarised against each principal risk.
Climate risks
Climate change risks are also integrated
into our risk management process. Actions
identified are captured on the Group’s risk
register and are monitored by the ESG
Committee (supported by the ARC). Details
of this and our overall approach can be found
in our Sustainability review on page 16.
Pets at Home Group Plc Annual Report and Accounts 2024
24
Risk Review continued
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Brand & Reputation
Owner: Chief Consumer Officer
Risk Type: Strategic
Risk profile H Risk appetite LLinks to strategy 1 2 3 4 5 6 7 Change on previous year:
Description
Protecting and enhancing our strong brand value and holding pet welfare as our number one priority is essential in attracting and retaining our consumers
and clinical talent and the trust and value our stakeholders place in us. This is the responsibility of every colleague. We are aware that trust and reputation
can quickly be lost so we continuously monitor and ensure that our business actions align to pet welfare and consumer and clinical expectations.
Key responses
– The Pet Welfare Committee upholds and drives animal
welfare standards within our own operations including
the quality and welfare considerations of our products
and services.
– The majority of practices are accredited or working
towards being accredited under the RCVS Practice
Standards Scheme (PSS).
– Rigorous pet welfare standards are in place
operationalised through quarterly unannounced audits
across stores, in-store adoption centres, and grooming
salons. Quarterly announced audits and three
separate, external, independent veterinary led audits
each year for each animal supplier.
– Risk-based product safety and integrity testing and
inspection programme to monitor ongoing safety
compliance of our own label products.
– Own label products developed with the support of
the Group’s internal veterinary expertise and external
behavioural experts.
– Dedicated Compliance Team to monitor customer
reviews and customer complaints.
– Tested product recall procedures.
– Conducted monthly research with our consumers
and wider market to understand their changing needs
and expectations and understand their opinions and
expectations on our brand to drive business action.
– Third party media, digital and social media monitoring
service in place to track corporate and consumer
brand references. Ongoing horizon scanning to identify
and track emerging themes and threats.
– Onboarded an integrated corporate affairs agency
to support with media engagement and corporate
reputation management.
Outlook and further actions planned
– Protecting, enhancing, and communicating
our strong brand value will remain our focus in
FY25, with core messages around pet welfare
and clinical expertise.
– A new Clinical Governance and QI Framework will
be rolled out over FY25 and FY26. We are committed
to continual monitoring, improving capability, and
supporting our colleagues and supply partners to
maintain high pet health and welfare standards.
– Review of clinical complaints processes and
management reporting.
– Implementing a comprehensive brand and consumer
tracking programme to continually monitor our
consumer expectations, brand health and consumer
reputation. The results will drive business action
where required.
– Establish stronger processes for managing digital
and social media risks.
– Continue to build a credible and visible evidence
based active leading voice on pet health and
welfare with consumers and the pet care industry
to drive the highest standards and change where
required. Provide expert opinion to decision makers
around potential changes to the Veterinary Surgeons
Act 1966.
– Review of Non-Traditional Companion Animals
(NTCA) and how we respond and educate.
– Introducing new data-driven platforms to identify
and monitor product safety risk and improve
reporting on raw material sources.
Emerging risks
– Continued impact on
consumers with cost of living
and pet care challenges.
– New and emerging animal
diseases particularly associated
with imported pets.
– Veterinary professional
regulatory changes.
– Veterinary professional and
public opinion around the
keeping and selling of NTCA.
– Competition and Markets
Authority (CMA) investigation
into veterinary services for
household pets in the UK.
Risk appetite
We place the welfare of pets and the value of our brand at the front and centre of all we do, along with our societal responsibilities in relation to the planet
and people. Therouphas low appetite for any risk which may compromise the trust and value which our communities and stakeholders place in our brand.
Strategic Report Governance Financial Statements
25
Owner: Chief Information Officer
Risk Type: Strategic/Operational
Risk profile H Risk appetiteLinks to strategy 1 2 4 Change on previous year:
Description
The availability and security of our IT systems and accurate data is vital for us to operate safely whilst maintaining the security of customer, colleague, and
Company confidentialdata.
Key responses
– Continued to invest in our cyber security position
delivering the cyber security strategy.
– Continued to focus on colleague awareness and
training across the business.
– Delivered new technologies to provide advanced
phishing protection and vulnerability management.
– Updated colleague authentication controls to
reflect industry bestpractices including Multi
Factor Authentication.
– Provided six monthly updates to the PLC board at
the ARC.
Outlook and further actions planned
– While our security maturity has improved
significantly over the last 12 months, cyber-attacks
continue to grow in frequency and complexity.
– Our Cyber Security strategy, that began in FY23, is
designed to take a risk-based approach to improve our
security maturity, minimise the likelihood of and increase
the ability to identify and respond to a cyber-attack.
– The strategy includes colleague awareness and
training, improved third party risk management and
privilege account management.
– We continue to monitor for emerging and changing
threats to ensure we appropriately respond and
protect against an ever adapting threat landscape.
– We are continuing to invest in a programme of
activity to improve our IT controls framework, which
will further support our Cyber Security strategy and
system resilience.
Emerging risks
– Artificial Intelligence has been observed
in increasing the complexity and
volume of attacks such as phishing as
the threat actors automate processes.
– There is a significant rise in attacks
using QR codes as a method of
attempting to circumnavigate
security awareness and controls.
– Geopolitical situations are creating
more advanced attacks, which may
inadvertently impact our business
or be repurposed by organised
cybercrime gangs.
– As more companies become victims
of cyber-attacks, customers and
colleagues who reuse emails and
passwords become an attack vector.
Risk appetite
The Group has zero tolerance for cyber security risk which may compromise our reputation, our technology solutions, and the personal data within them.
We endeavour to protect our data in line with legislation and best practice. The Group accepts a balanced level of operational technology risk to protect
and enhance our operations. We have plans in place to minimise the likelihood and impact of any business-critical technology failure.
Information security and business critical systems
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
M
Omnichannel consumer proposition
Owner: Chief Consumer Officer
Risk Type: Strategic
Risk profile M Risk appetite MLinks to strategy 1 2 4 5 6 Change on previous year:
Description
A key part of the Group’s strategy is to grow and strengthen our omnichannel pet care platform, which offers a wide range of pet product and services
through both physical anddigital channels. If we fail to deliver our planned growth in our footprint and services, our expected growth and financial
performance could be adversely impacted.
Key responses
– Opened 5 new Pet Care Centres and completed
41 refits to create enhanced locations.
– Continued investment in our veterinary business,
with 3 new practices and 26 practice extensions; we
also relaunched our unique Practice Owner value
proposition at the London Vet Show in Autumn 2023.
– Our priority investment programmes that help enable
our Omnichannel model have been delivered in FY24.
Our new distribution centre in Stafford, which became
operational in June 2023 and our multi-year digital
capability programme (Project Polestar) which went
live in March 2024, offering much improved user
experience and functionality across app and website.
– Our store estate remains entirely leased, which gives
us great flexibility.
Outlook and further actions planned
– The Group is in a strong competitive position
through our unique omnichannel pet care model.
– We will continue to invest in our physical locations
(both pet care centres and vet practices), including
new sites and refits and in the key enabling
infrastructure, in particular our supply chain and
digital platform.
– We will continue to evolve our value propositions
(including subscriptions) based on consumer insights
and feedback.
Emerging risks
– Speed of change in innovation
and advances in pet care and
clinical technology.
– Cost increases seen in materials
and labour.
– Material changes in customer
behaviour and needs,
driven by concerns around
affordability, sustainability, and
the environment making pet
ownership less attractive.
Risk appetite
We have a higher appetite for risk in the creation of long-term value, developing our strategy and taking advantage of opportunities. In the execution of our
strategic initiatives, where we need to maximise benefits realisation, we will only accept a moderate level of risk.
Pets at Home Group Plc Annual Report and Accounts 2024
26
Risk Review continued
Sustainability and climate change
Owner: Chief People & Legal Officer
Risk Type: Strategic
Risk profile M Risk appetiteLinks to strategy 6 7 Change on previous year:
Description
The success of our business over the long term depends on the Group operating sustainably in financial, environmental, and social terms. Our stakeholders,
including investors, colleagues and customers need to be assured that we are acting responsibly across our business operations and supply chains. If we
do not meet these expectations the Group’s brand reputation, licence to operate and financial performance could be threatened. This includes progressing
towards our 2040 net zero target across our own operations and our value chains and over the long term managing the physical risks from climate change
and the transition risks from failing to effectively decarbonise our business.
We have a sustainability programme ‘Our Better World Pledge’ with governance covering the different areas of the business in relation to environmental
responsibilities. This is important as we navigate the need to balance commercial decisions with environmental and regulatory requirements and
management of potential increased costs of sustainable materials. This governance also oversees consideration to potential future disclosure requirements
such as The Taskforce on Nature-related Financial Disclosures (TNFD).
Key responses
– Long-term SBTi approved (2040) net zero and
medium-term (2030) carbon reduction targets in place.
– Assessment of physical and transitionary climate
change related risks (see TCFD statement page 54).
– Allocation of capital across five years from FY23
to enable the delivery of further operational
carbonreductions.
– Launch of the Manufacture 2030 platform with our
suppliers to support their decarbonisation.
– Launch of the sustainable anaesthesia programme
with vet practices to enable them to manage their
use of anaesthetic gases within a framework of
clinical excellence.
– Launch of a second long-term strategic pet food
supplier partnership.
– Increased dedicated in-house sustainability resource
with the addition of a sustainability analyst who is
focusing on the carbon foot printing of our products.
– Since FY23 the inclusion of ESG objectives for salaried
colleague linked to bonus schemes (see remuneration
report page 66).
Outlook and further actions planned
– Our progress in delivering our updated sustainability
strategy, 'Our Better World Pledge' can be found in
summary on page 16 and in our separate sustainability
report. This includes our performance against our new
targets relating to sustainability and climate change.
– Expanding our product standards and environmental
requirements detailed in our Responsible Sourcing
Handbook to include a more extensive list of non-food
raw materials such as textiles and plastics.
– We will continue to progress the initiatives that we
have begun in FY24 including supplier decarbonisation
support, carbon foot printing of pet food products and
anaesthetic gas stewardship.
– Solar panels will be installed on our new DC site in
Stafford during FY25.
– Ongoing sustainability training for senior leadership
team.
Emerging risks
– Our TCFD scenario analysis
identified the sustainability of
pet ownership as an emerging
risk. Our TCFD statement on
page 54 explains this risk in
more detail.
Risk appetite
The Group takes its responsibilities in relation to sustainability seriously, not only because it is the right thing to do, but because it is critical to ensuring the
sustainability of the business. We define sustainability as achieving environmental sustainability, social sustainability as well as financial sustainability and
all three of these dimensions are critical tocreating value in the long term.
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
M
Strategic Report Governance Financial Statements
27
People and Organisational Capability
Owner: Chief People & Legal Officer
Risk Type: Strategic
Risk profile M Risk appetiteLinks to strategy 1 2 4 7 Change on previous year:
Description
Our 17,000+ colleagues and Practice Owners are fundamental to the success of our business. It is essential that we attract, retain, develop, and reward our
talent across the Group. Havingthe right talent will help us meet the needs of our consumers, drive our consumer-centric, omnichannel pet care ecosystem
and deliver our business strategy.
Key responses
– Reward and Wellbeing
strategy to attract and
retain talent.
– Expansion of external
candidate pipeline outside
mainstream talent pools.
– Development of career
pathways to retain talent
groups and develop
internal capability.
– Further embedding
‘Great Conversations’ (our
performance management
tool) to better drive
colleague performance.
– Promoting the brand
through a national tactic
to recruitment with ‘always
on’ approach.
– Proactively attract
international recruitment
for clinical talent.
– Optimisation of social
media sites and careers
website.
– Investment in the
approach to contracts
for locum population in
practices.
Outlook and further
actions planned
– We continue to focus on
the attraction and retention
of critical talent, reducing
colleague turnover and
the development of
colleague skills ensuring
we have the right skills and
organisational capability
to deliver the business
strategy.
– There are continuing global
restrictions and challenges
in the specialist and
clinical talent market, most
recently with the changes
in the government’s
migration policy.
– FY25 will also focus on
organisational capability
and the effectiveness of
our people systems to be
an enabler to this.
– People data and analytics
will continue to be key
in ensuring the People
strategy supports the
delivery of the business
strategic pillars.
– Through our colleague
engagement surveys and
listening groups we will
continue to listen to our
colleagues and act upon
their feedback.
Retail
– We will continue to review
the structures of our Pet
Care Centres ensuring
that roles fully encapsulate
the skills and capability
needed for the future.
– We will continue to drive
knowledge and expertise
along with providing
transparent career
pathways.
– We will review existing
colleague development
programmes along with
creating management
development programmes.
– We will review our total
reward and wellbeing
offering for colleagues
and managers.
Vet business
– Deliver a suite of career
and personal development
activities to practice
colleagues via our
Clinical Academy.
– Scaling of our Extra Mural
Studies (EMS) bursary
programme working
within the community and
early careers partners to
increase social mobility
and broaden our talent
pool and raise the
profile of our employer
brand within the clinical
profession, including
internationally.
– Continue to work with
the British Veterinary
Association (BVA) to
support implementation of
the BVA Good Workplace
Code and its principles
within practice.
– Put a new focus on
attracting those who
have left the profession
(e.g.family leave, non-
returners or those who
have retired early) to
further understand our
appeal to this talent pool.
– Adapt international
strategy to focus on
graduates and senior
veterinary surgeons
following immigration
legislation changes.
Emerging risks
– Continuing restrictions
and challenges in the
specialist and clinical
talent market.
– New legislation on
sponsoring overseas
talent and the removal of
veterinary roles from the
shortage occupation list.
The impact of increased
salary requirements for
skilled worker visas.
– Increasing trend in
reduction of adults
available to work in the
UK and increase in
long-term absences
fromthe workplace.
Risk appetite
We expect our colleagues and Practice Owners to act in line with our culture, values, and behaviours. The business has no appetite for risk relating to the
health, safety, and wellbeing of our colleagues. We do however accept that there is an inherent level of risk in attracting and retaining critical talent across
the business.
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
M
Pets at Home Group Plc Annual Report and Accounts 2024
28
Risk Review continued
Competition and Consumers
Owner: Chief Consumer Officer
Risk Type: Strategic
Risk profile H Risk appetite M HLinks to strategy 1 3 5 6 7 Change on previous year:
Description
The Group competes in a wide-ranging competitive market including other pet specialists, pure play online competitors, online marketplaces, direct to
customer businesses, supermarkets, discounters, online pet healthcare platforms, veterinary groups, and independent practices. There continues to be
strong online competition including new start-ups, and those focused on subscriptions. We must continue to offer an attractive model for our future
veterinary Practice Owners while keeping ahead of, and responding to, developments by our competitors around price, range of services offered, clinical
care, and experience. There also remains a level of uncertainly around the UK economy and consumer confidence. Failing to be aware and manage all
thesefactors could have an adverse impact on the Group’s financial performance and opportunities for growth.
Key responses
– Continued focus on the execution of our consumer-
centric strategy, including delivery in FY24 of two of
our biggest strategic investments: our new distribution
centre in Stafford, which is now fulfilling all stores,
and the launch of our new digital petcare platform,
including our updated App and website.
– Relaunch of our loyalty scheme – Pets Club – and
continued optimisation of our member offers utilising
proprietary propensitymodelling.
– Improvements to our subscription propositions,
including the expansion of our Easy Repeat proposition
by >1K Stock Keeping Units (SKUs).
– Continued focus on new product development and
innovation, including our exclusive partnerships with
innovative brands such as Butternut Box and Bella and
Duke in fresh and raw foodcategories.
– Monthly consumer research and brand sentiment
tracking to understand changes to consumer
behaviour, identify opportunitiesand to monitor the
effectiveness of our brand marketing communications;
we also rolled out an updated consumer satisfaction
tracking service.
– We also increased the frequency of our consumer and
competitor insight reviews to quarterly; these materials
are reviewed by our EMT and are used to shape and
evolve the businesses’ priorities during the year.
Outlook and further actions planned
– We will remain within a highly competitive market and
there remains ongoing uncertainty for our consumers
as to the impact of the economic backdrop on
household budgets. However, we have the strategies,
processes, and structures in place to continue to
monitor this and review our consumer propositions
as required.
– Continued investment into our consumer experience –
both in our pet care centres and within our new digital
pet care platform.
– Well established product development processes,
which will ensure we launch new or enhanced
products/ranges to our core food, health, and
accessories categories.
– Developing and expanding our veterinary services by
continuing to open new practices, extending existing
practices, investing in our practice infrastructure
(including our new Practice Management System),
and enhancing the omnichannel journeys for our
vet clients.
– Regular monitoring of the market and competitor
pricing to ensure we continue to provide competitive
value and provide the best options for our consumers.
– Monitoring the effectiveness of our processes by
regularly tracking our business and competitors
against the measures our consumers tell us are
important to them and drive theirbehaviour.
– Continue the development of impactful consumer
propositions which meet consumers’ pet care needs
and deliver differentiatedvalue.
Emerging risks
– Increased uncertainty due to
the Competition and Markets
Authority (CMA) investigation
into veterinary services for
household pets in the UK.
– Disruption from new competitors
taking advantage of new market
dynamics and/or existing
competitors receiving greater
investment.
– Increased competition
from generalist retailers
putting greater focus on
the pet category.
– Macroeconomic weakness
and low levels of consumer
confidence.
– Material changes in consumer
buying behaviour driven by
concerns around affordability,
sustainability, and the
environment making pet
ownership lessattractive.
Risk appetite
The Group recognises that to successfully compete and grow the business we need to take an acceptable level of risk, whilst staying within our overall
Group risk appetite. Wehave a higher appetite for risk in the creation of long-term value, developing our strategy and taking advantage of opportunities.
Inthe execution of our strategic initiatives, where we need to maximise benefits realisation, we will only accept a moderate level of risk.
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Strategic Report Governance Financial Statements
29
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Owner: Retail Chief Operating Officer and Vet Chief Operating Officer
Risk Type: Operational
Risk profile LLinks to strategy 2 6 7 Change on previous year:Risk appetite
L
5
Description
As we source our products and raw materials globally, we are exposed to the risks associated with international trade, such as supplier failure or disruption,
inflation, changing regulatory frameworks and currency exposure. Failing to meet our responsible sourcing commitments could damage consumer
confidence and our business reputation, which could have a negative impact on business performance. A disaster at one of our distribution centres or
the wholesaler for veterinary products may result in a significant disruption to the supply of stock to stores, essential products to our practices and in the
fulfilment of internet orders.
Key responses
– Our Responsible Products Committee is responsible
for developing the strategy for managing the
environmental and ethical impacts of our products on
our valuechain.
– A comprehensive Supplier Code of Conduct provides
clear supplier expectations in relation to human rights,
environmental, ethical, and legal standards. This is
supported by a Responsible Sourcing Handbook
which brings our Supplier Code of Conduct to life with
detailed implementation requirements, guidance, and
signposting to additional resources. Our responsible
sourcing requirements form a key part of our
contractual agreements with suppliers.
– Roll out of Manufacture 2030 initiative giving us
much greater insight into impact of our third-party
upstream logistics.
– Engagement with industry bodies and external experts
for collaboration, sharing and development of industry
best practice.
– Qualified Internal Ethical Auditor.
– Modern slavery awareness training forms a key part
of our mandatory colleague training for Support
Office colleagues.
– Dedicated whistleblowing reporting mechanism for
workers within our supply chain to report concerns.
– Robust onboarding and ongoing monitoring
programme of own label supplier standards including
announced and semi-announced audits (i.e. aware
audit is due but not informed of date) of production
facilities conducted by Pets at Home colleagues or
third-party audit bodies. Suppliers are supported to
remediate non-conformances.
– Data systems are used to manage our audit and
supplier data. This enables us to better track the
resolution of issues and understand more about our
suppliers, their workforce, and their risk profile.
– Vaccine supply and freight costs for veterinary
products has stabilised through close interaction
with the supplier plus ongoing managed allocation
of product until there was enough supply in the UK
to return to unrestricted supply. Agreed ring-fenced
stock has partially protected us from market shortages
of products.
– Business continuity plans are in place for the
distribution centres. We can service all stores and
orders for a priority range of SKUs from a single
distribution centre whilst we source a second facility
and recover full product supply.
Outlook and further actions planned
– Rising production, material and labour costs, potential
changes to shipping routes and the disruption of raw
material supply chains puts pressure on suppliers
and means normal levels of due diligence could be
bypassed to ensure the continuity of labour and
materials for the fulfilment of customer orders. This
increases the risk of human rights violations and
environmental damage occurring undetected in lower
tiers of supply chains. We work in partnership with
our suppliers and in collaboration with industry to
understand and mitigate these risks together.
– We are mindful of the potential risk of supplier failure,
either through insolvency or through an inability to
deliver products due to global supply chain challenges.
– Our overseas supplier audit programme continues.
We have invested in the team and from April 2024 we
have increased the frequency and depth of supplier
compliance and ethical audits, whilst proactively
reviewing risks and potential suppliers from other
countries before we engage.
– We are working with our own label suppliers to map
lower tiers of the supply chain and to support them in
conducting risk assessments. Where there is a high risk
commodity, industry, sourcing location or vulnerable
workers, we will work with them to ensure we have full
visibility of ethical standards.
Emerging risks
– Geopolitical uncertainty and
disruption.
– Continuing labour shortages in
the UK manufacturing, logistics
and agricultural sectors.
Risk appetite
The Group does not tolerate any breach of Company policies, local laws, or regulations in our supply chain. We have clear expectations of our suppliers in
relation to upholding human rights, providing safe working conditions, meeting acceptable labour standards, and protecting the environment. The safety
and integrity of our products is of paramount importance so we will not compromise standards. We always collaborate with our suppliers to help them
achieve our requirements but where standards are persistently not met orwe encounter a zero-tolerance issue, we will end our business relationship.
Responsible sourcing and supply chain
Pets at Home Group Plc Annual Report and Accounts 2024
30
Risk Review continued
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Liquidity and credit
Owner: Chief Financial Officer
Risk Type: Finance
Risk profile L Risk appetite MLinks to strategy 1 2 3 4 5 6 7 Change on previous year:
Description
The Group requires adequate cash resources to enable it to fund its growth plans through its capital projects and working capital requirement. Without
adequate cash resources, the Group may be unable to deliver its growth plans, with a consequent impact on future financial performance. The Group’s
growth plans in respect of Joint Venture veterinary practices are predicated on the availability of finance for new Joint Venture Practice Owners to fund
both the capital cost and working capital requirement for each new practice opening or capacity expansion. The Group also provides additional financial
support to veterinary practices to underpin their working capital requirements and growth in clinical capacity. This investment is a particular feature of the
Joint Venture operating model and in making this investment the Group considers its total returns across all practices on a portfolio basis.
Key responses
– The Group’s finances are continually monitored in the
context of its growth plans and of the wider economic
landscape. The Group’s core financing facilities are
in place until September 2028. The Group maintains
close working relationships with its banking partners
to ensure sufficient liquidity and credit is available.
The Group monitors a range of potential cash flow
sensitivities to ensure the banking facilities in place
remain sufficient and adequate considering evolving
macro and micro-economic factors.
– The Group ensures that all cash surpluses are invested
with banks that have credit ratings and investment
criteria that meet the requirements set out in the
Group Treasury Policy, which is Board approved.
– The Group’s key suppliers are exposed to credit risk
and as part of the Group’s overall risk management
programme, the business has identified alternative
suppliers where appropriate and developed
contingency plans in respect of own label and
private label foodproducts.
– The Group has from time to time bought out and
consolidated a number of Joint Venture veterinary
practices. As part of these acquisitions, the Group has
settled any liabilities for third party bank loans and
leases within these practices on behalf of the Joint
Venture Practice Owner, with all such liabilities being
written off.
– For the practices which the Group continues to
operate under a Joint Venture Agreement, the Group
has an established credit impairment provision
to reflect the assessment of extended loans and
investments being repaid over different lengths
of time, with different risks of return, to provide
for any potential shortfall. The Group has facilities
in place with recognised lenders that give us
confidence that our medium-term growth plans are
financedadequately.
Outlook and further actions planned
– The Group’s liquidity headroom in the financial year,
and the length of time to expiry of the Group’s core
financing facilities, will continue to be monitored
periodically.
– The evolving political and macro-economic situation
is likely to lead to sustained uncertainty in relation to
forecast cash flows, liquidity, and credit requirements.
We will continue to monitor our finances and build
relationships with our finance providers to ensure
that the business is well positioned to manage its
cash flows effectively and ensure sufficient liquidity
is available.
– We recognise the potential need to support some of
our Joint Venture veterinary practices with additional
funding during the year ahead. Such funding will be
available for those businesses that remain viable over
the longer term, considering resilience evidenced
within the sector throughout the last financial year.
Emerging risks
– The evolving supply chain
andinflationary factors.
Risk appetite
We apply a cautious and balanced approach to funding, liquidity, and credit risks to safeguard access to funding whilst maintaining sufficient liquidity to
meet our current financial obligations and future financial forecasts. The Group does not tolerate any breach in liquidity and credit contracts or Group
liquidity and credit financial policies.
Strategic Report Governance Financial Statements
31
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Treasury and finance
Owner: Chief Financial Officer
Risk Type: Finance
Risk profile L Risk appetite LLinks to strategy 1 2 3 4 5 6 7 Change on previous year:
Description
The Group has an exposure to exchange rate risk in respect of the US dollar, which is the principal purchase currency for goods sourced from Asia.
TheGroup also faces risks from changes to interest rates due to its exposure to debt facilities with floating interest rates linked to SONIA. The Group has
an exposure to potential tax compliance issues which could lead to financial or reputational loss. If we do not manage these exposures, there could be an
impact on the Group’s financial performance with a consequential impact on operational and growth plans.
Key responses
– This exposure to exchange rate fluctuation is managed
via forward foreign currency contracts that are
designated as cash flow hedges. The roup has an
established guiderail for foreign exchange hedging in
terms of both percentage forecast foreign currency
purchase coverage and time horizon hedged out to.
– This exposure to interest rate fluctuation is managed
via floating to fixed interest rate swap contracts that
are designated as cash flow hedges. The roup has an
established guiderail for interest rate hedging in terms
of both percentage forecast debt coverage and time
horizon hedged out to.
– All hedging activity is undertaken by the Group
Treasury function in accordance with the Group
Treasury Policy that sets out the criteria for
counterparties with whom the Group can transact,
which states that all hedging activities are undertaken
in the context of known and forecast cash flows, with
speculative transactions specifically prohibited.
– The Group operates within the Group Tax Policy
framework which aims to maintain a low risk appetite
approach to its tax affairs.
Outlook and further actions planned
– The political and macro-economic environment has
resulted in ongoing heightened foreign currency
volatility and interest rate pressures, and we may
see this continue for some time.
– Ongoing currency movements between the US
dollar and GBP may result in further exchange risk,
particularly considering the geopolitical and macro-
economic environment.
– These risks are appropriately mitigated through
the roup’s Treasury Policy, Tax Policy, and risk
management strategies. The roup will continue
to manage this through its well-established foreign
exchange and interest rate hedging policies, and more
widely its roup-wide treasury and tax policies. We do
not expect any increased threat from other significant
macro-economic changes in the short to medium term.
Emerging risks
– Continued macroeconomic
andgeopolitical uncertainty.
Risk appetite
The Group has a low appetite for balance sheet risk. We apply a cautious approach to safeguard the strength and resilience of the balance sheet. We also
take an ethical and low risk approach to tax. The Group does not tolerate any breach in key financial policies, such as the Group Treasury Policy.
Pets at Home Group Plc Annual Report and Accounts 2024
32
Risk Review continued
Link to strategy
1
Disrupt the status quo in
the veterinary industry
6
Broaden our appeal through
best-in-class accessory ranges
7
Create a Better World for
planet, pets, and people
2
Deliver our omnichannel
consumer proposition
3
Strengthen our brand, marketing,
and go to market approach
Risk Profile/
Risk Appetite
L
Low
M
Medium
H
High
Change on
previous year
Stable Increased Decreased
4
Evolve our pet care centres to
power our omnichannel model
5
Drive premiumisation
and share gain in food
Legal and compliance
Owner: Chief People & Legal Officer
Risk Type: Legal and compliance
Risk profile L Risk appetite LLinks to strategy 1 2 3 4 5 6 7 Change on previous year:
Description
Many of the Group’s activities are regulated by national and international legislation, applicable industry regulations and standards including, but not
limited to, consumer and competition laws and regulations, trading, advertising, packaging, product quality, health and safety legislation and guidance, pet
shop licensing, National Minimum Wage and National Living Wage, Equality Act, modern slavery, anti-bribery and corruption, data protection, environmental
regulations, the Corporate Governance Code, the RCVS Code of Professional Conduct for Veterinary Surgeons, and the off-payroll regulations (IR35).
There have also been significant global developments in artificial intelligence technologies and a regulator-led approach to AI regulation, together with
the upcoming implementation of the EU AI Act which has extra-territorial effect. Failure to comply with the obligations set out in this paragraph and
other applicable legislation or recommendations of any regulatory investigations may lead to financial penalties and reputational damage and other
consequences for the business and its Directors.
Key responses
– We actively monitor regulatory developments in the UK
and Europe (as applicable) and our existing obligations
where we have internal policies and standards to
ensure compliance where appropriate. Training is
provided for colleagues.
– We operate a confidential whistleblowing hotline for
colleagues, Practice Owners, suppliers, and people
working within our supply chain to raise concerns
regarding any potential breach of legal or regulatory
obligations in confidence.
– Our suppliers commit to comply with all relevant
business regulations for the territories in which they
operate and to meet international labour standards
which are laid out in our Supplier Code of Conduct.
We reinforce this by placing contractual obligations on
our suppliers and support where necessary.
– The Group’s Data Protection Officer and xecutive
sponsored teering ommittee monitors Group
compliance with legal requirements relating to
personal data, ensuring relevant policies are up to
date and works with our Information Security Steering
Committee which monitors data security.
– We understand the value of ongoing training and
communication to raise awareness of the personal
data handled by the business, how to keep it safe
and how to help prevent personal data incidents. We
carry out regular induction, awareness, and refresher
training for all our colleagues in Retail, Vets, and the
SupportOffice.
Outlook and further actions planned
– We continue to monitor legal and regulatory
developments across the UK and Europe and
will plan accordingly.
Emerging risks
– New and amended regulations.
– Significant strengthening
of UK consumer laws and
regulations including those on
the use of digital information,
and increasingly stringent
environmental regulation.
– Sector review and market
investigation by the CMA into
veterinary services for household
pets in the UK.
– Increasing AI use and regulation.
Risk appetite
The Group is committed to acting ethically, lawfully, and always in the best interests of our stakeholders and therefore has an extremely low appetite for
compliance breaches, either regulatory or of our principal internal polices, including for example, our Health and Safety policy and our Code of Business
Ethics and Conduct. Anyone who acts on our behalf is expected to act in line with our policies, values, and behaviours and to take the necessary steps to
comply with applicable laws and regulations.
Financial Statements
33
Strategic Report Governance
Ian Burke
Chair
Chair’s Introduction to Governance
On behalf of the Board, I am pleased to present our
Corporate Governance Report for the financial year
ended 28 March 2024.
This financial year has seen the business move through a number of
critical periods in implementing our strategic initiatives, with projects
such as the move to the new Stafford distribution centre and Polestar
coming to fruition. Ensuring that the Board and business maintains
strong governance to support the execution of such key projects has
been essential to support the long-term success of the Company,
given the risks and challenges that are inherently involved with such
major transformational changes.
During the year, the Board welcomed Angelique Augereau as an
independent Non-xecutive irector. With the rise of artificial
intelligence (AI), it is essential that the Board has appropriate
capability to oversee the significant opportunity and risk that
AI brings. Angelique’s experience in AI and machine learning
complements the Board’s skills and will ensure that the Board is well
placed to deal with future growth in this field. In addition, as the
business starts to explore new AI uses and opportunities, the Board
has considered what governance is necessary for the use of AI across
the business. A Responsible AI Use Policy has been developed which
is intended for use by all colleagues and is based around the five
key principles of: 1) transparency and accountability, 2) fairness and
non-discrimination, 3) impact and sustainability, 4) privacy, security
and resilience, and 5) consistency with culture – all of which are core
values for the ompany.
In addition, the Board has maintained a strong focus on external
developments, including the CMA review into the veterinary services
sector for household pets and, with the considerable experience of
the on-xecutive irectors on competition issues, will continue to
guide the business through the market investigation.
The Board has continued to monitor corporate governance
developments throughout the year, including the changes to be
introduced by the Corporate Governance Code 2024 and work is
underway to implement the new provisions as appropriate.
The business also took part in the FTSE Women Leaders review and
the Parker review again this year and the Board is pleased to see the
continued improvements made in this area. Diversity will continue to
be a focus for the future.
I hope that this report provides a clear outline of the work the Board
has undertaken during the year and how our governance and Board
agendas are aligned with the Group’s strategy. I look forward to
welcoming shareholders to our AGM at the Pets at Home Support
Office on 11 July 2024 at 11am.
Ian Burke
Chair
28 May 2024
Strong
governance to
support strategic
execution
Pets at Home Group Plc Annual Report and Accounts 2024
34
Non-Executive Directors
Chair Senior Independent
Non-Executive Director
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Chief Executive Officer Chief Financial Officer
Appointment to the Board
2020
Appointment to the Board
2021
Appointment to the Board
2018
Appointment to the Board
2023
Appointment to the Board
2023
Appointment to the Board
2024
Appointment to the Board
2022
Appointment to the Board
2016
Current roles
Past roles
– Member of the Board of
Governors of Birmingham
CityUniversity
– Non-Executive Chair
ofStudioRetail
GroupPlc
– Non-Executive Senior
Independent Director
of intu properties Plc
– Chair and Chief Executive
Officer ofRank Group Plc
– Chief Executive Officer
ofHolmesPlace HealthClubs
– Chief Executive Officer of
ThistleHotels Plc
– Chair of Vet Partners
Holdings Ltd
Current roles
– Senior Independent Director
and Chair ofthe Audit and Risk
Committee ofAnglian Water
Services Limited
– Independent Non-Executive
Director, Audit and Risk
Committee Chair and ESG
Committee Chair at Hays Plc
– Independent Non-Executive
Director andChair of the Audit
and Risk Committee ofHM
Treasury
– Trustee of National Trust and
Chairof itsAuditCommittee
– Member of Chapter Zero
– Member of Women onBoards
Past roles
– Non-Executive Director and
Senior Independent Non-
Executive Director of Post
Office Limited and member of
its AuditCommittee
– Independent member of the
Auditand Risk Committee of
JohnLewis PartnershipPlc
– Chief Financial Officer
of the BBC
– Chief Operating Officer
of The Grass Roots
Group Plc
Current roles
– Trustee of Pet BloodBank
Past roles
– Dean of the Institute of
Veterinary Science at the
University ofLiverpool
– Council member of the Royal
College of Veterinary Surgeons
(RCVS)
– Member of the Veterinary
ProductsCommittee
– Member of the Antimicrobial
Resistance and Healthcare
Associated Infections
Committee for the Department
of Health
Current roles
– Chair of Nuffield Health
– Chair of Voyage Care
– Non-Executive Director
ofRiverstone Living
Past roles
– Lecturer in General Medicine
and Clinical Pharmacology
– Head of Medical Ethics, British
Medical Association
– Managing Director of Bupa
Health and Wellbeing
– Chief Executive Officer
of Acorn Care and Education
– Chief Executive Officer
of Sunrise Senior Living
– Non-Executive Director
of Royal National
Orthopaedic Hospital
– Non-Executive Director
of PHIN
– Non-Executive Director
of Which?
Current roles
– Chair of Plate-Up Limited
– Chair of Finnebrogue Artisan
– Luminary Advisor with
Accenture
Past roles
– Executive Director at
JSainsbury Plc
– COO and CEO at Asda
Stores Limited
– Advisor with Bain & Company
Current roles
Past roles
– Chief Analytics Officer
at Capital One Financial
Corporation
– Chief Data & Analytics Officer
at Apax Partners
– Managing Director of
JP Morgan’s Global
Payment Business
Current role
– Chief Executive Officer
Past roles
– Chief Consumer Officer
at Sky UK Limited
– Non-Executive Director at Wm
Morrison Supermarkets Plc
Current roles
– Chief Financial Officer
– Non Executive Director and
Audit and Risk Committee
Chair of WickesGroupPlc
Past roles
– Chief Financial Officer of New
Look from 2014–2016
– Held a number of senior finance
roles over 13 years working
for Tesco Plc both in the UK
and overseas. These included
Group Planning, Tax and
Treasury Director, UK Finance
Director and Chief Financial
Officer of Tesco Homeplus
(South Korea)
– Number of senior roles
with Kingfisher Plc and
Whitbread Plc
Contribution to the Board
Wealth of experience from
theleisure and retailsectors.
Ianhassignificant prior experience
ofparticipation in audit and
remuneration committees.
Contribution to the Board
Wide ranging financial and
commercial expertise. Zarin is
alsoaChartered Accountant.
Contribution to the Board
Considerable veterinary
experience and expertise on the
training and wellbeing of vets.
Contribution to the Board
Strategic and operational
healthcare experience, together
with knowledge of complex
consumer businesses.
Contribution to the Board
Deep knowledge of the retail
sector and food supply chains.
Contribution to the Board
Broad experience of AI and
machine learning.
Contribution to the Board
Broad experience in consumer-
facing businesses, expertise
in customer and digital first
initiatives, experience in data and
digital transformation.
Contribution to the Board
Financial knowledge and
retailindustry expertise.
Committees
N
E
Committees
N
E
R
A
Committees
N
E
R
A
Committees
N
E
A
Committees
N
E
R
A
Committees
N
E
Committees
E
Committees
E
Chair
Board of Directors
Ian Burke Zarin Patel Susan Dawson Natalie-Jane Macdonald
Financial Statements
35
Strategic Report Governance
Chair Senior Independent
Non-Executive Director
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Independent
Non-ExecutiveDirector
Chief Executive Officer Chief Financial Officer
Appointment to the Board
2020
Appointment to the Board
2021
Appointment to the Board
2018
Appointment to the Board
2023
Appointment to the Board
2023
Appointment to the Board
2024
Appointment to the Board
2022
Appointment to the Board
2016
Current roles
Past roles
– Member of the Board of
Governors of Birmingham
CityUniversity
– Non-Executive Chair
ofStudioRetail
GroupPlc
– Non-Executive Senior
Independent Director
of intu properties Plc
– Chair and Chief Executive
Officer ofRank Group Plc
– Chief Executive Officer
ofHolmesPlace HealthClubs
– Chief Executive Officer of
ThistleHotels Plc
– Chair of Vet Partners
Holdings Ltd
Current roles
– Senior Independent Director
and Chair ofthe Audit and Risk
Committee ofAnglian Water
Services Limited
– Independent Non-Executive
Director, Audit and Risk
Committee Chair and ESG
Committee Chair at Hays Plc
– Independent Non-Executive
Director andChair of the Audit
and Risk Committee ofHM
Treasury
– Trustee of National Trust and
Chairof itsAuditCommittee
– Member of Chapter Zero
– Member of Women onBoards
Past roles
– Non-Executive Director and
Senior Independent Non-
Executive Director of Post
Office Limited and member of
its AuditCommittee
– Independent member of the
Auditand Risk Committee of
JohnLewis PartnershipPlc
– Chief Financial Officer
of the BBC
– Chief Operating Officer
of The Grass Roots
Group Plc
Current roles
– Trustee of Pet BloodBank
Past roles
– Dean of the Institute of
Veterinary Science at the
University ofLiverpool
– Council member of the Royal
College of Veterinary Surgeons
(RCVS)
– Member of the Veterinary
ProductsCommittee
– Member of the Antimicrobial
Resistance and Healthcare
Associated Infections
Committee for the Department
of Health
Current roles
– Chair of Nuffield Health
– Chair of Voyage Care
– Non-Executive Director
ofRiverstone Living
Past roles
– Lecturer in General Medicine
and Clinical Pharmacology
– Head of Medical Ethics, British
Medical Association
– Managing Director of Bupa
Health and Wellbeing
– Chief Executive Officer
of Acorn Care and Education
– Chief Executive Officer
of Sunrise Senior Living
– Non-Executive Director
of Royal National
Orthopaedic Hospital
– Non-Executive Director
of PHIN
– Non-Executive Director
of Which?
Current roles
– Chair of Plate-Up Limited
– Chair of Finnebrogue Artisan
– Luminary Advisor with
Accenture
Past roles
– Executive Director at
JSainsbury Plc
– COO and CEO at Asda
Stores Limited
– Advisor with Bain & Company
Current roles
Past roles
– Chief Analytics Officer
at Capital One Financial
Corporation
– Chief Data & Analytics Officer
at Apax Partners
– Managing Director of
JP Morgan’s Global
Payment Business
Current role
– Chief Executive Officer
Past roles
– Chief Consumer Officer
at Sky UK Limited
– Non-Executive Director at Wm
Morrison Supermarkets Plc
Current roles
– Chief Financial Officer
– Non Executive Director and
Audit and Risk Committee
Chair of WickesGroupPlc
Past roles
– Chief Financial Officer of New
Look from 2014–2016
– Held a number of senior finance
roles over 13 years working
for Tesco Plc both in the UK
and overseas. These included
Group Planning, Tax and
Treasury Director, UK Finance
Director and Chief Financial
Officer of Tesco Homeplus
(South Korea)
– Number of senior roles
with Kingfisher Plc and
Whitbread Plc
Contribution to the Board
Wealth of experience from
theleisure and retailsectors.
Ianhassignificant prior experience
ofparticipation in audit and
remuneration committees.
Contribution to the Board
Wide ranging financial and
commercial expertise. Zarin is
alsoaChartered Accountant.
Contribution to the Board
Considerable veterinary
experience and expertise on the
training and wellbeing of vets.
Contribution to the Board
Strategic and operational
healthcare experience, together
with knowledge of complex
consumer businesses.
Contribution to the Board
Deep knowledge of the retail
sector and food supply chains.
Contribution to the Board
Broad experience of AI and
machine learning.
Contribution to the Board
Broad experience in consumer-
facing businesses, expertise
in customer and digital first
initiatives, experience in data and
digital transformation.
Contribution to the Board
Financial knowledge and
retailindustry expertise.
Committees
N
E
Committees
N
E
R
A
Committees
N
E
R
A
Committees
N
E
A
Committees
N
E
R
A
Committees
N
E
Committees
E
Committees
E
Roger Burnley Angelique Augereau Lyssa McGowan Mike Iddon
Executive Directors
Committees – Key
N
Nomination and Corporate Governance
A
Audit and Risk
R
Remuneration
E
ESG (Environmental, Social and Governance)
Chair of Committee
Pets at Home Group Plc Annual Report and Accounts 2024
36
Leadership and Purpose
Compliance with the 2018 UK Corporate Governance Code
(the ‘2018 Code’)
The Governance Report outlines how the Board has applied the
main principles of good governance as required by the UK Corporate
Governance Code issued by the Financial Reporting Council in July
2018, the Disclosure Guidance and Transparency Rules (DTRs) and the
Listing Rules (LRs).
The Board is responsible for ensuring that the Group has the
necessary frameworks in place to ensure compliance with the Code.
The Board believes that during this financial year, the Group was in
full compliance with the Code.
Oversight of development and implementation of strategy
The Board continues to oversee and support the transformation and
development of the strategic vision for the Group, in line with the
Board’s aim to generate and preserve long-term value. During the
oard meetings this year, increased focus and time has been given
to Group strategy and strategic priorities. The Board has considered
risks and opportunities to the business throughout the year during the
course of Board meetings.
2024 Board considerations
During the year the Board spent its time considering a wide
range of matters, including:
– Development of the Group’s strategic plan;
– In depth reviews on the key strategic initiatives;
– Updates from key business functions, including IT
(also covering AI), investor relations and vets;
– Business performance;
– Sustainability and climate matters;
– Overall performance of individual business functions;
– Budgets and long-term plans for the Group;
– Risk management and controls, including reputation risk
and corporate governance;
– Financial statements, announcements and financial
reporting matters;
– Competitor and customer updates;
– Diversity, talent, capability and succession planning matters;
– Reviewing Committee reports;
– Approving significant items of capital expenditure and
contracts requiring Board approval under the Board’s
reserved matters;
– Group culture, behaviours, engagement and results from
the colleague listening surveys;
– Shareholder feedback;
– Regulatory matters, corporate governance and
corporate reporting;
– Approval of the financing arrangements and treasury items;
– Non-Executive Director and Executive Management Team
succession and talent development;
– Engagement with key stakeholders and the impact of Board
decisions on such stakeholders;
– The appointment of the new auditor;
– Capital allocation;
– Political matters and public affairs;
– The CMA review and market investigation into the vet
services sector for household pets;
– Board evaluation; and
– Key strategic projects and priorities across the Group.
Principal governance
activities during the
financial year
Financial Statements
37
Strategic Report Governance
Board meetings and attendance
In this financial year, the Board met formally eight times and attended
an annual strategy day meeting. Ad hoc meetings of both the Board
and Committees were arranged to deal with matters between
scheduled Board meetings as appropriate. Board meetings were
preceded by Committee meetings with the meetings lasting the
majority of the day in most cases. Topics for the Board meetings are
determined at the beginning of the year and new items are added
to this as and when appropriate in consultation with the Board and
Executive Management Team. All Directors receive papers in advance
of Board meetings via an electronic board paper system which
enables the fast dissemination of quality information in a safe and
secure manner. These include a monthly Board report with updates
from each of the Chief Executive Officer and the Chief Financial
Officer, which monitors the achievements against the Group’s key
performance indicators, both financial and strategic. Performance
against budget is reported to the Board monthly and any substantial
variances are explained.
Forecasts for the year are revised and reviewed regularly. Members
of the Executive Management Team and senior leadership teams
are also invited to present at Board meetings from time to time so
that Non-Executive Directors keep abreast of developments in the
Group. For the Board, these meetings are an opportunity to meet
colleagues below the level of the Executive Management Team
and for colleagues asked to present, this is a valuable part of their
career development. It is important to the Group that all Directors
understand external views of the Group. Throughout the year,
reporting is provided to the Board by the Company’s Director of
Investor Relations covering broker and shareholder views.
Directors’ conflicts of interest
The Articles of Association of the Company give the Directors the
power to consider and, if appropriate, authorise conflict situations
where a Director’s declared interest may conflict or does conflict
with the interests of the Company. Procedures are in place at every
meeting for individual Directors to report and record any potential
or actual conflicts which arise. The register of reported conflicts is
maintained by the Company Secretary and reviewed by the Board at
least annually. The Board has complied with these procedures during
the year.
Number of meetings
1
Board
Remuneration
Committee
Audit and Risk
Committee
Nomination
and Corporate
Governance
Committee
ESG
Committee
Number of meetings
1
8 4 4 3 3
Director
Ian Burke (Chair) 8/8 – – 3/3 3/3
Zarin Patel 8/8 4/4 4/4 3/3 3/3
Dennis Millard 7/7 – – 2/2 3/3
Susan Dawson 8/8 4/4 3/3 3/3 3/3
Roger Burnley 8/8 4/4 4/4 3/3 3/3
Natalie-Jane Macdonald 7/7 – 2/2 3/3 2/2
Angelique Augereau 2/2 – – 1/1 1/1
Lyssa McGowan
3
8/8 – – – 3/3
Mike Iddon 8/8 – – – 3/3
Sharon Flood 2/2 1/1 1/1 – 1/1
Stanislas Laurent 2/2 1/1 – – 1/1
1
Excludes the strategy day, which all Directors (appointed before that date) attended.
2
Dennis Millard stepped down as a formal member of the Audit and Risk Committee and the Remuneration Committee on 14 February 2023. He continued to attend meetings of
those Committees as an observer from 14 February 2023. Dennis stepped down from the Board on 29 February 2024.
3
Although not formally appointed as a member of the Audit and Risk and Remuneration Committees, Lyssa McGowan attended meetings of such Committees as an observer
at the invitation of the Chair. In addition, Mike Iddon also attended meetings of the Audit and Risk and Remuneration Committees as an observer, despite not being formally
appointed as a member of those Committees.
Pets at Home Group Plc Annual Report and Accounts 2024
38
Pets at Home Group Plc Board of Directors
The Board is collectively responsible for the long-term success of the Company. The business of the Company is
managed by the Board which may exercise all of the powers of the Company. The Board delegates certain matters to
Board Committees, and delegates the detailed implementation of matters approved by the Board and the day-to-day
operational management of the business to the Group Chief Executive Officer. Further details can be found on page 39.
Chief Executive Officer
Leads the Executive Management Team and represents management on
the Board in conjunction with the Group Chief Financial Officer
Executive Management Team
The Executive Management Team supports the Chief Executive Officer
with the day-to-day management of the Group’s operations and
executes the Group’s strategy once agreed by the Board
Board Committees
Audit and Risk
Committee
Nomination and Corporate
Governance Committee
Retail
Senior Leadership Team
Investment
Committee
Responsible Product
Committee
Health and Safety
Committee
Climate Change and
Waste Committee
Pet Welfare
Committee
Pensions
Committee
Vet Group
Senior Leadership Team
Remuneration
Committee
Environmental, Social and
Governance (ESG) Committee
Consumer
Senior Leadership Team
Division of Responsibilities
How we
are governed
Governance structure
The Group’s governance structure in respect of the Board and Committees is as detailed in the diagram below.
Financial Statements
39
Strategic Report Governance
The role of the Board
Division of responsibilities
The Company is led and controlled by the Board which is collectively
responsible for the long-term and sustainable performance of the
Group. The roles of Chair and Chief Executive Officer are separate and
clearly defined, with the division of responsibilities set out in writing
and agreed by the Board. The definitions of the roles are published
on the Group’s website https://www.petsathomeplc.com/investors/
corporate-governance/division-of-responsibilities-for-the-ceo-and-
the-chairman/.
Board Committees
The Board has established four Board Committees: an Audit and Risk
Committee, a Nomination and Corporate Governance Committee, a
Remuneration Committee and an ESG Committee. Each Committee
has written terms of reference which are approved by the Board
and subject to review each year. The terms of reference for each
Committee have been reviewed and updated this year, as appropriate
to deal with changes in guidance and within the business. The terms
of reference are available on request from the Company Secretary
and are published on the Group’s website https://www.petsathomeplc.
com/investors/corporate-governance/.
Executive Management Team
In addition to the Board, the Group has the Executive Management
Team which includes: the Chief Executive Officer, Chief Financial
Officer, Retail Chief Operating Officer, Vet Group Chief Operating
Officer, Chief Legal and People Officer, Chief Information Officer and
the Chief Consumer Officer. Supporting the Executive Management
Team are senior leadership teams for retail, vet and consumer. The
senior leadership teams support the Executive Management Team
in the implementation of strategy and risk and governance oversight
across their respective divisions.
Management Committees
Details of our management committees are set out below:
Investment Committee
The Investment Committee assists the Board with the Group’s store
and veterinary surgery rollout and development process to ensure
the Group’s investment process is managed effectively and rigorously
throughout the Group. The Investment Committee is chaired by the
Chief Financial Officer and is also attended by the Chief Executive
Officer and other members of the Executive Management Team and
senior leadership team, including the Director of Property and the
Development Director. The Investment Committee meets formally
at least nine times a year and otherwise as may be required. Duties
of the Investment Committee include reviewing and considering all
proposals presented for the acquisition of new stores, standalone
veterinary surgeries, vet extensions, Support Offices, Distribution
Centres and any other type of property for which occupation is
proposed for use by a member of the Group; approving all material
variations and works of a capital nature proposed to be carried
out to any property in which the Group has a right of occupation;
approving all material variations to proposed property and standalone
surgery acquisitions; periodically reviewing proposed changes to the
reporting and presentation of property investment criteria; reviewing
all proposals presented for lease renewals and reviewing alternative
strategies for new store investment, formats and geographical markets
and reporting on such strategies to the Board for final approval on
the terms of any such matter; and reviewing all proposals for the
dispositions of all or part of any of the leases on stores including any
sub-letting, assignments, surrenders or relocations and approving or
rejecting any such proposals as appropriate.
Each of the matters approved by the Investment Committee is subject
to further approval by the Board where it falls within the level of
expenditure requiring full Board approval. Details from the Investment
Committee meetings are provided to the Board on a regular basis.
Health and Safety Committee
Health and safety is a key priority for the Board and senior
management. The Board has established a Health and Safety
Committee that meets at least on a quarterly basis and is chaired
by the Chief Legal and People Officer with the agenda led by the
Group Head of Health and Safety. The Committee is attended by
key individuals in the business who are responsible for certain areas
of health and safety including the veterinary business, retail, and
grooming, and the Committee is tasked with reviewing the Group’s
overall health and safety performance. The Group’s wellbeing and
engagement manager also attends the meetings. A health and safety
policy is in place for the Group which is reviewed on a regular basis.
The Distribution Centres have their own dedicated health and safety
manager and a separate health and safety sub-committee which also
meets on a regular basis. The Vet Group also has a designated health
and safety manager and health and safety assessors. Further details
of the work of the Health and Safety Committee are contained in our
separate Sustainability Report.
Other Management Committees
Pensions Committee
The Pensions Committee operates to consider pensions related issues
across the business.
Pet Welfare Committee
The Pet Welfare Committee is responsible for leading the business
to be the credible, trusted voice in pet welfare and the guardians of
the value ‘we put pets first’. The Committee considers all pet welfare
matters impacting the roup and research.
Responsible Product Committee
The Product and Supply Chain Committee is responsible for
considering sustainability issues in the supply chain.
Climate Change and Waste Committee
The Climate Change and Waste Committee considers all climate and
waste matters impacting the business.
Pets at Home Group Plc Annual Report and Accounts 2024
40
Internal control and risk management
The Board is responsible for the Group’s system of internal control
and for reviewing its effectiveness. The Board has carried out a
robust assessment of the Group’s emerging and principal risks,
including those that would threaten its business model, future
performance, solvency, liquidity or reputation as detailed on pages 22
to 32. The Board delegates to the Executive Management Team the
responsibility for designing, operating and monitoring these systems.
The systems are based on a process of identifying, evaluating and
managing key and emerging risks, and include the risk management
processes set out on page 49 of the Audit and Risk Committee Report.
The systems of internal control were in place throughout the period
and up to the date of approval of the Annual Report. The systems of
internal control are designed to manage rather than eliminate the
risk of failure to achieve business objectives. They can only provide
reasonable and not absolute assurance against material errors, losses,
fraud or breaches of law and regulations. A number of internal controls
operate across the business. The key controls the business relied
upon during the year are set out below:
– The annual Group-wide strategic review of the existing five-year
strategic plan took place in November 2023 and was reviewed
and approved by the Board. Following this approval, the business
carried out its annual business plan and budget cycle, again
culminating in formal review and approval by the Board on
19March 2024.
– Management accounts have been reviewed at meetings of
the Board. These reviews covered the comparison of actual
performance against budget in the period end management
accounts and consideration of outturn for the year. The period
end accounts are prepared by the finance team and reviewed
by the Chief Financial Officer.
– All capital investments during the year have been approved by
the Chief Financial Officer; an authority framework is in place
which details the approvals required for specific levels of capital
spend including those capital projects requiring full Board
approval. In line with delegation by the Board, the Investment
Committee, chaired by the Chief Financial Officer, has reviewed
and approved investments in respect of the acquisition
and fit-out of new stores, and new standalone and in-store
veterinary practices.
– There is an independent internal audit department in place that
has its scope agreed directly with the Audit and Risk Committee
and has reported at each Audit and Risk Committee meeting
throughout the year. All internal audit reports are presented to
the Audit and Risk Committee for review and consideration of
any material findings. Where audit findings have been raised,
management have agreed appropriate actions and these are
prioritised based on risk. Further details of the areas covered
in the internal audit reports can be found in the Audit and Risk
Committee Report on page 48.
– A clearly articulated delegated authority framework in respect
of all purchasing activity is in place across the Group. This is
complemented by systemic controls including a contract
approval policy that reflects the agreed authority framework
and clear segregation of duties between relevant functions
and departments.
– A schedule of matters reserved for the Board is in place
for approving significant transactions and strategic and
organisational change. Board discussion of the key risks and
uncertainties facing the Group and the risk management system.
Further details are contained in the Audit and Risk Committee
Report on pages 46 to 51.
Division of Responsibilities continued
Whistleblowing policy
The Company has a duty to conduct its affairs in an open and
responsible way. We are committed to high standards of corporate
governance and compliance with legislation and appropriate codes
of practice. By knowing about any wrongdoing or malpractice at an
early stage, we stand a good chance of taking the necessary steps to
stop it. The Group has a whistleblowing policy designed to encourage
colleagues to identify such situations and report them without fear
of repercussions or recriminations provided that they are acting
in good faith. The policy sets out how any concerns may be raised
and the response which can be expected from the Company and in
whattimescales.
A copy of the Group’s Code of Ethics and Business Conduct is
published on the Group’s website https://www.petsathomeplc.com/
sustainability/documents-policies/policies/.
Share dealing code
The Company has adopted a share dealing code in relation to its
shares. The share dealing code applies to the Directors, any other
Persons Discharging Managerial Responsibility and certain colleague
insiders of Group companies and they are responsible for procuring
the compliance of their respective connected persons with the
Company’s share dealing code. Pets at Home’s investor website is also
regularly updated with news and information, including this Annual
Report which sets out our strategy and performance together with our
plans for future growth https://www.petsathomeplc.com/.
For more information:
www.petsathomeplc.com
Financial Statements
41
Strategic Report Governance
Composition, Succession and Evaluation
Board balance and independence
The 2018 Code recommends that at least half the board of Directors
of a UK-listed company, excluding the chair, should comprise Non-
Executive Directors determined by the board to be independent in
character and judgement and free from relationships or circumstances
which may affect, or could appear to affect, the Directors’ judgement.
The Board currently consists of five Independent Non-Executive
Directors and one Non-Executive Chair. The Directors’ biographies
are contained on pages 34 to 35. The Board considers that all of
the current Non-Executive Directors are independent in character
and judgement and that both individually and collectively, the
Directors have the range of skills, knowledge, diversity of experience
and dedication necessary to lead the Group and also contribute
significantly to the work of the Board, together with the requisite
strategic and commercial experience.
Dennis Millard served on the Board this year, stepping down on 29
February 2024. Dennis had acted as an Independent Non-Executive
Director for over nine years and was therefore no longer considered
independent in accordance with Provision 10 of the 2018 Code due to
exceeding nine years tenure on 13 February 2023.
The skills matrix for the Board on page 43 demonstrates the Board’s
breadth of experience. More than half of the Directors are considered
to be independent in accordance with the 2018 Code. In addition,
the 2018 Code recommends that, on appointment, the chair of a
company with a premium listing on the Official List should meet the
independence criteria set out in the 2018 Code. The Board considers
that Ian Burke meets the independence criteria set out in the
2018Code.
Directors’ induction and ongoing training
It is important to the Board that Non-Executive Directors have the
ability to influence and challenge appropriately. New Directors receive
a full, formal and tailored induction on joining the Board, including
meeting with the Executive Management Team and advisors. The
induction includes visits to the Group’s stores, veterinary surgeries,
Distribution Centres and other operational locations together
with training on the Group’s core values including its culture,
environmental, social and governance issues as well as behaviours
that are in place to support the Group’s values. Individual training
needs are reviewed regularly and training is provided where a need
is identified or requested. All Directors receive frequent updates on a
variety of issues relevant to the Group’s business, including regulatory
and governance issues. The Group’s corporate advisors provided a
bespoke training session for the Board this year covering updates on
irectors’ duties and the market abuse regime. The Board also has
access to the Deloitte Academy training portal and Directors have
attended a variety of training sessions throughout the year
via thissystem.
Appointment terms and election of Directors
All Directors have service agreements or letters of appointment and
the details of their terms are set out in the Remuneration Policy which
is located on the company’s investor website in the 2023 Annual
Report (https://www.petsathomeplc.com/investors/). The service
agreements and letters of appointment are available for inspection
at the Company’s registered office during normal business hours. At
each Annual General Meeting of the Company all Directors will stand
for re-election in accordance with the 2018 Code. Each financial
year the Chair will liaise with Non-Executive Directors to assess and
review individual contributions to the Board and performance over the
financial period. The skills and experience which each Non-Executive
Director brings to the Board are detailed on pages 34, 35 and 43
and why their contribution is, and continues to be, important to the
Company’s long-term sustainable success.
Board effectiveness
The time commitments of each of the Non-Executive Directors are
considered regularly and reviewed annually. The Board is satisfied
that the Chair and each of the Non-Executive Directors are able to
devote sufficient time to the Group’s business.
Diversity and inclusion
The Board understands the importance of having a diverse
membership and recognises that diversity encompasses not only
gender but also background, ethnicity and experience.
The roup’s diversity and inclusion aim is to increase diverse
representation of colleagues to reflect the communities we live
and work in. The roup’s policy for all colleagues and applicants
is to remove barriers to ensure equality of opportunity regardless
of sex, race, ethnic origin or nationality, pregnancy or maternity,
age, disability, religious or other philosophical belief, marital status,
sexual orientation, gender or gender reassignment. Our culture of
inclusivity ensures colleagues with different backgrounds, interests,
appearances, perspectives and working styles feel welcome.
Applications for employment from candidates who have a disability
are given full and fair consideration, and candidates are assessed
in accordance with their particular skills and abilities. The roup
takes all reasonable steps to meet its responsibilities towards the
training and employment of people with a disability, and to ensure
that appropriate training, career development and promotion
opportunities are available to all colleagues, irrespective of disability.
Every effort is made to provide continuity of employment in the event
that any colleague becomes disabled. Attempts are made in every
circumstance to provide employment, whether this involves adapting
the current job role and remaining in the same job, or moving to a
more appropriate job role. The roup continues to be a member of the
Business Disability Forum.
Board composition was reviewed by the Board this year to ensure
that the requirements of the Code are met. No changes were
recommended, however, the Nomination and Corporate Governance
Committee will continue to regularly review the diversity of the Board
and the Executive Management Team on an ongoing basis. The
Board was considered to have an appropriate mix of tenure, skills and
experience. The Board believes that appointments should be made
solely on merit, an ethos which applies across the business. The Board
continues to ensure that it maintains an appropriate balance through
a diverse mix of experience, background, skill, knowledge and insight,
to further strengthen the diversity and experience already on the
Board. Further work has been undertaken by the Group this year on
diversity and inclusion, as detailed on pages 12, 17, 18, 45, 53 and in the
Sustainability Report.
The Board was pleased to meet the Parker Review targets on ethnic
diversity again this year. The Board was also pleased to improve its
ranking in the FTSE Women Leaders Report on gender balance again
this year.
Pets at Home Group Plc Annual Report and Accounts 2024
42
The following tables set out the information required by Listing Rule 9.8.6R(10), in the prescribed format.
1. (a) Table for reporting on gender identity or sex
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
Men 3 37% 2 2 33%
Women 5 63% 2 4 67%
Not specified/prefer not to say – – – – –
2. (b) Table for reporting on ethnic background
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
of executive
management
White British or other White (including minority-white groups) 6 75% 2 5 83%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British – – – – –
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab 2 25% 2 1 17%
Not specified/prefer not to say – – – – –
The data above was collected by way of individual confirmation from the Board and Executive Management Team and is correct as at 22 May 2024.
Succession
The Board has continued to focus on succession planning and Group talent development this year. Further detail of the work undertaken
by the Nomination and Corporate Governance Committee in this area is included on page 45.
Board evaluation
Further information relating to this year’s Board evaluation can be found on page 45 of the Nomination and Corporate Governance
Committeereport.
Composition, Succession and Evaluation continued
Board
byTenure
Board
by Age
Board
by Gender
Balance of the Board
(Exec/Non-Exec)
Under 1 year 2/8
1–3 years 2/8
3–8 years 4/8
45–50 1/8
50–55 1/8
56–60 2/8
61–65 3/8
+66 1/8
Female 5/8
Male 3/8
Executive Directors 2/8
Non-Executive
Directors 6/8
Financial Statements
43
Strategic Report Governance
Pets at Home Group Plc – Board Skills Matrix
Director
Ian
Burke
Zarin
Patel
Susan
Dawson
Roger
Burnley
Natalie-Jane
Macdonald
Angelique
Augereau
Lyssa
McGowan
Mike
Iddon
Pet Owner
✔ ✘ ✔ ✔ ✘ ✘ ✔ ✘
Expertise
Accounting, Finance and Audit
✔ ✔ ✘ ✔ ✘ ✘ ✘ ✔
Risk Management
✔ ✔ ✘ ✔ ✔ ✘ ✘ ✔
Regulatory
✔ ✔ ✔ ✔ ✔ ✘ ✘ ✔
Governance
✔ ✔ ✔ ✔ ✔ ✘ ✔ ✔
Corporate Transactions (M&A)
✔ ✔ ✘ ✔ ✔ ✘ ✔ ✔
International (running a non UK Business)
✔ ✘ ✘ ✘ ✘ ✘ ✘ ✔
General Management (CEO)
✔ ✔ ✔ ✔ ✔ ✘ ✔ ✘
People and Culture
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
General Retailing Experience
✘ ✔ ✘ ✔ ✘ ✘ ✔ ✔
Customer Service and Communications Experience
✘ ✔ ✘ ✔ ✔ ✘ ✔ ✔
Online Retailing Experience
✔ ✔ ✘ ✔ ✘ ✘ ✔ ✔
Marketing/Branding
✔ ✔ ✘ ✔ ✔ ✘ ✔ ✔
General Services
✔ ✘ ✘ ✔ ✔ ✘ ✔ ✘
Veterinary
✘ ✘ ✔ ✘ ✘ ✘ ✘ ✘
Healthcare
✘ ✘ ✘ ✘ ✔ ✘ ✘ ✘
Charity/Social Purpose
✔ ✔ ✔ ✔ ✔ ✘ ✘ ✔
Data
✘ ✔ ✘ ✔ ✔ ✔ ✔ ✘
Artificial Intelligence
✔ ✘ ✘ ✘ ✘ ✔ ✘ ✘
IT and Technology
✘ ✔ ✘ ✔ ✘ ✔ ✔ ✘
Omnichannel
✔ ✔ ✘ ✔ ✔ ✘ ✔ ✔
Strategic Leadership
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Vision and Mission
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
Sustainability and Climate Change
✔ ✔ ✔ ✔ ✘ ✘ ✘ ✘
Transformation Leadership
✔ ✔ ✘ ✔ ✔ ✔ ✔ ✔
Chair of Plc Board
✔ ✘ ✘ ✘ ✘ ✘ ✘ ✘
Chair of Plc Board Committee
✔ ✔ ✔ ✔ ✘ ✘ ✘ ✔
Pets at Home Group Plc Annual Report and Accounts 2024
44
Nomination and Corporate Governance Committee Report
What we did in 2024
– Considered Board composition and how it may be enhanced.
– Reviewed and considered Board evaluation and
effectiveness.
– Reviewed the independence of the Non-Executive Directors.
– Reviewed and considered Directors’ conflicts of interest.
– Reviewed the time commitment and length of service of the
Non-Executive Directors.
– Recommended the appointment of Angelique Augereau as
Non-Executive Director.
– Reviewed and considered executive succession plans.
– Reviewed the Committee’s corporate governance obligations.
– Considered corporate governance updates.
What we will do in 2025
– Continue to review Board composition and effectiveness.
– Consider succession planning.
– Review corporate governance obligations and updates.
– Undertake an external Board evaluation and continue to
develop any areas identified for improvement.
Introduction
The Nomination and Corporate Governance Committee is a key
committee of the Board whose role is to keep the composition and
structure of the Board and its Committees under review and has
responsibility for nominating candidates for appointment as Directors to
the Board having regard to its structure, size and composition (including
the skills, knowledge, experience and diversity of its members).
We are also tasked with ensuring that succession plans are in place
for the Directors, the Executive Management Team and the senior
leadership teams, taking into consideration the current Board
structure, the leadership requirements of the Group and the wider
commercial and market environment within which the Group operates.
The full terms of reference for the Nomination and Corporate
Governance Committee can be found on the Company’s website.
Committee membership
The UK Corporate Governance Code recommends that a majority
of the members of a nomination committee should be independent
Non-Executive Directors. The Nomination and Corporate Governance
Committee is chaired by myself, and its other members are Zarin Patel,
Susan Dawson, Roger Burnley, Natalie-Jane Macdonald and Angelique
Augereau. Dennis Millard was also a member of the Committee during
the year, prior to stepping down from the Board on 29 February
2024. The majority of the Committee’s members are independent
on-xecutive irectors. The Nomination and Corporate Governance
Committee meets not less than once a year.
There were three formal Committee meetings held in the financial
year and members’ attendance was as shown in the table above.
Board appointments and resignations
Dr Natalie-Jane Macdonald joined the Board as an Independent Non-
Executive Director with effect from 27 May 2023. Natalie is a member
of the Nomination and Corporate Governance Committee and the
ESG Committee from appointment. Natalie has also taken the role of
Non-Executive Director with responsibility for colleague engagement
during this financial year. Natalie’s previous roles and experience are
detailed on page 34. Natalie brings an exceptional level of strategic
and operational healthcare experience, together with knowledge of
complex consumer businesses at an executive and board level.
The Board was also pleased to welcome Angelique Augereau to the
Board as an Independent Non-Executive Director with effect from
22 January 2024. Angelique brings extensive knowledge of AI and
machine learning to the business. Her previous roles and experience
are detailed on page 35. Angelique is a member of the Nomination
and Corporate Governance Committee and the ESG Committee
from appointment.
Ian Burke
Chair, Nomination and Corporate
Governance Committee
The following Directors served on the Nomination
and Corporate Governance Committee during the
financial year:
Member Period from To
No. of
meetings
Ian Burke (Chair) 21 May 2020 To date 3/3
Zarin Patel 20 May 2021 To date 3/3
Dennis Millard 18 February 2014 29 February 2024 3/3
Susan Dawson 12 July 2018 To date 3/3
Roger Burnley 14 February 2023 To date 3/3
Natalie-Jane
Macdonald 27 May 2023 To date 3/3
Angelique
Augereau 22 January 2024 To date 1/1
Ensuring
our future
success
Financial Statements
45
Strategic Report Governance
Stanislas Laurent and Sharon Flood stepped down from the Board on
26 May 2023. Dennis Millard also stepped down from the Board on
29February 2024.
In respect of the Board Committees, Susan Dawson was appointed
as hair of the Remuneration Committee from 27 May 2023 until
29 February 2024. Roger Burnley took over as hair of the
Remuneration Committee with effect from 1 March 2024. Susan
Dawson and Natalie-Jane Macdonald were appointed as additional
members of the Audit and Risk Committee from 6 July 2023 and
23 November 2023 respectively.
Susan Dawson, who has served on the Board as an independent
Non-Executive Director since 2018, has also indicated her intention
not to seek re-election at this year’s AGM. Myself and the Board would
like to thank Susan for her service to the business.
At Executive Management Team level, a number of changes have also
taken place. Lucy Williams’ remit was expanded to include the People
function, as Chief Legal and People Officer. Anja Madsen joined the
business as the new Retail Chief Operating Officer with effect from
2 April 2024. Anja has held senior roles at Sainsbury's and Tesco, and
joins from Danish supermarket chain Føtex where she was CEO.
In addition, Lucy Williams stepped down as ompany ecretary on
6 July 2023 and Lesley Lazenby was appointed as Legal Director &
Company Secretary from the same date.
Succession planning and Group talent development
At Board, Committee and Executive Management Team level, the
Committee has considered the skills required to deliver the strategy
and objectives in the longer term.
The Committee is responsible for reviewing talent, capability and
succession at the most senior levels of the business and continues
to focus on talent development, retention and succession below
Board and Executive Management Team level. This work has involved
considering skills and capability gaps along with succession planning
immediately below the Executive Management Team and the
development of a talent framework whereby colleagues are assessed
against the Group’s core competencies. Development plans have
been put in place to support colleagues in reaching their full potential.
Considerable progress has been made in identifying gaps in the talent
pool in addition to mitigating the risks associated with unforeseen
events such as key individuals leaving the business.
Board evaluation and effectiveness
This year, the Board carried out an internal evaluation, using a survey
covering a number of key areas (including: Board composition,
stakeholders, Board dynamics, Board meetings and information,
Committees, development, strategy and performance, risk and
people). The Committee reviewed and discussed the survey responses
and any areas of focus. The Board was considered to be effective.
Diversity
The Board is committed to supporting work initiatives that promote
a culture of inclusion and diversity. The Committee recognises the
importance of diversity and inclusion both in the Boardroom and
throughout the organisation and understands that a diverse Board
will offer wider perspectives which lead to better decision-making,
enabling it to meet its responsibilities. We take into account a variety
of factors before recommending any new appointment to the Board,
including relevant skills to perform the role, experience, knowledge,
ethnicity and gender. The most important priority of the Committee,
however, is ensuring that the best candidate is selected to join the
Board. We will monitor the Group’s approach to people development
to ensure that it continues to enable talented individuals to enjoy
career progression with the Group.
Further details on Board diversity can be found on page 42 of the
Governance Report.
Conflicts of interest and independence of the Non Executive
Directors
The Board has delegated authority to the Committee to consider, and
where necessary authorise, any actual or potential conflicts of interest
arising in respect of the Directors, however any potential conflicts of
interest were considered during Board meetings as they arose during
the course of this year.
We also support the Board in its annual consideration of the Conflicts
of Interest Register, which is carried out prior to the publication of the
Annual Report, and consider the independence of the Non-Executive
Directors, in the context of the criteria set out in the Corporate
Governance Code.
The Board’s view on independence is contained on page 41 of the
Governance Report. For further information on Board composition,
diversity and independence, please see the Governance Report on
page 41 and 42.
I will be available at the Annual General Meeting to answer any
questions on the work of the Nomination and Corporate Governance
Committee and I look forward to reporting on further progress as we
continue our work next year.
Ian Burke
Chair, Nomination and Corporate Governance Committee
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
46
Audit and Risk Committee Report
Introduction
I am pleased to report that the Committee continues to be highly
engaged in assisting the Board in fulfilling its responsibilities to
protect the interests of shareholders regarding the integrity of
the financial reporting, the adequacy and effectiveness of risk
management and internal control systems, and the effectiveness of
both Internal Audit and External Audit. This year we have conducted
an external audit tender in line with our commitment to do so as
KPMG LLP (‘KPMG’), have been our auditors since 2014. We have
carried out a competitive external audit tender, ensuring a focus
on audit quality and effectiveness and giving due consideration to
competition in the audit market. The Board have selected Deloitte LLP
(‘Deloitte’) to succeed KPMG as auditors from 29 March 2024. Further
details on this process are detailed in the external audit section below.
Further details on the division of Board responsibilities and the
Committee’s role in complying with the UK Corporate Governance
Code are set out on page 44.
What we did in 2024
Carried out our responsibilities as set out in the terms of reference,
including challenging the judgemental areas, classification of
non underlying items and advising the Board on whether external
reporting is fair, balanced and understandable. Reviewed and
challenged the appropriateness of Alternative Performance Measures
(‘APMs’) and KPIs, ensuring they are meaningful, balanced and
explained appropriately. Reviewed climate-risk related disclosures
and the Group’s distributable reserves position in advance of the
declaration of dividends.
Reviewed and challenged the Longer-Term Viability Statement (‘LTVS’)
and going concern basis of preparation in advance of its approval by
the Board, particularly considering the presence of key risk factors such
as climate change, recessionary impacts, current geopolitical tensions,
continuing global supply chain issues, inflationary pressures and the
impact of consumer confidence. As part of this work, the carrying value
of the goodwill balance has been reviewed.
Monitored the control environment of the Group including our general
risk management and internal controls processes, as well as emerging
and evolving risks considering the presence of key risk factors as
noted above.
Reviewed the effectiveness of the Group’s whistleblowing procedures,
fraud effectiveness framework, health and safety plans, and the
activities and effectiveness of the Internal Audit function to meet the
requirements of the Internal Audit plan.
Continued to monitor the process and controls around extending
financial support to Joint Venture veterinary practices, and the
recoverability of those loans and investments. We have also continued
to review whether the level of practice indebtedness, or any other
factors, infers control to the Group of a practice, and whether this
challenges the existing accounting treatment.
The Committee has continued to monitor progress of the Internal
Controls project which has continued to progress well, being focused
initially on improving controls around financial reporting whilst
monitoring and adapting to changes to the UK Corporate Governance
Code by the FRC. We have agreed our strategy and approach around
scope and attestation, implemented a new controls and policies
governance system and developed the first and second line of
defence.
Following an initial gap assessment, we are in the process of
documenting business processes and identifying weaknesses. We
have documented the majority of our core business processes and
their related risks and controls. We are focused on improving our
risk and controls capability to support the development of actions
to improve control weaknesses and the maturity of the control
environment as a whole.
Zarin Patel
Chair ofthe Audit andRiskCommittee
Who is on the Audit and Risk Committee?
Member
No. of
meetings
Zarin Patel (Chair) 4/4
Roger Burnley 4/4
Sharon Flood 1/4
Stanislas Laurent 1/4
Susan Dawson 3/4
Susan Dawson joined the Audit and Risk Committee on 6 July
2023 and Natalie-Jane Macdonald joined on 23 November 2023.
Sharon Flood and Stanislas Laurent both stepped down on
26May 2023.
Ensuring
integrity in
everything
we do
Financial Statements
47
Strategic Report Governance
As part of our review we have identified controls which can be
strengthened. These mainly relate to the retention of evidence,
segregation of duties and the formality and consistency of control
operation. We have also had a strong focus on IT controls where the
initial documentation is largely complete and our work is now focusing
on improvements. We have identified six key workstreams in this area
to focus on over the next financial year.
We have reviewed and monitored compliance with the newly
published Minimum Audit Standards for Audit Committees and
the revised UK Corporate Governance Code as issued by the FRC
in January 2024 and incorporated the relevant changes into the
Committee’s terms of reference.
We have reviewed the progress and delivery of major projects
including the new distribution centre (Project Spice), digital capability
(Project Polestar), Vet Group transformation (Project Apollo) and
cyber security enhancements. We have ongoing embedded assurance
within major strategic projects to report back to the Board and Audit
and Risk Committee on key risk themes. Following recommendation
by the Audit and Risk Committee, the Board has carried out a lessons
learnt analysis in relation to Project Spice.
We have worked with the ESG Committee to continue to support
the development of the Group’s climate risk scenario planning and
reporting in relation to Task Force on Climate-Related Financial
Disclosures (‘TCFD’) and the related considerations in the Group’s
going concern and longer-term viability assessment, including
reviewing the commitments published by the Group. We also
commissioned an external review of the disclosures to ensure they
were in line with best practice. Deloitte have been appointed to
perform the limited assurance review over selected ESG metrics this
year, ahead of their appointment as External Auditor.
Cyber security risk continues to be one of the Group’s Principal Risks
and an area we remain vigilant given the increasingly complex nature
of cyber attacks. We continue to refine and test our incident response
processes, including incident rehearsals leading to a more robust
underlying framework. The cyber security policies, controls and cyber
maturity plans have been reviewed by the Committee at the biannual
Risk and Audit Review and by the Board of Directors.
We have implemented a new 3 year rolling plan for the Audit and Risk
Committee agenda.
What we will do in 2025
Continue to build on what we did in 2024 and to carry out our
responsibilities as set out in the terms of reference.
Continue to monitor emerging and maturing risks, in particular risks
from climate change, recessionary impacts, geopolitical tensions, the
global supply chain issues, cyber security and data privacy.
Continue to develop our Internal Controls Framework and monitor
progress of the Internal Controls project ahead of our compliance
date of March 2027. We will continue to monitor and build our fraud
policy and carry out a fraud effectiveness review across the business.
We are continuing to develop our audit and assurance policy.
Review the progress and delivery of major projects including
completion of the transition of our multichannel operations to our new
distribution centre in Stafford, roll out of digital capability (Project
Polestar), Vet Group Practice management system (Project Darwin)
and cyber security enhancements. We have ongoing embedded
assurance within major strategic projects to report back to the Board
and Audit and Risk Committee on key risk themes.
Continue to review the development of the Data Protection framework
and data compliance programme across the business. Review the
developing responsible AI governance framework and newly created
Acceptable Use Policy.
Continue to work with the ESG Committee to support the
development of the Group’s scenario planning and reporting in
relation to Task Force on Climate-Related Financial Disclosures
(‘TCFD’), specifically relating to new requirements and
recommendations made by the FRC.
Committee membership
All of the Committee members are independent Non-Executive
Directors and the Board is satisfied that Zarin Patel, has significant,
recent and relevant financial experience and is suitably qualified
being a Chartered Accountant. Roger Burnley has significant retail
experience and Susan Dawson, as a qualified vet has similarly deep
sector expertise. Natalie-Jane Macdonald has significant strategic
and operational healthcare experience. The Board considers that the
Committee members collectively have competence relevant to the
Group’s sectors. Further details of the Committee members and their
experience can be found on pages 34 to 35.
The Chair of the Company’s Board, Executive Management Team and
senior managers within the business are invited to attend meetings
as appropriate to ensure that the Committee maintains a current and
well-informed view of events within the business, and to reinforce a
strong risk management culture. The Group Company Secretary acts
as secretary to the Committee.
The Committee meets according to the requirements of the
Company’s financial calendar. The meetings of the Committee also
provide the opportunity for the Independent Non-Executive Directors
to meet without the Executive Directors present and to raise any
matters of concern with the internal and external auditors. Committee
members also meet in private prior to each Committee meeting
and hold separate private sessions with the internal auditor and the
external auditor, to provide additional opportunity for open dialogue
and feedback without management present.
Committee activities
The Committee’s role primarily covers the following areas:
– Financial reporting and narrative reporting, including TCFD
reporting;
– Ongoing viability;
– Risk management systems;
– Internal controls;
– Internal audit; and
– External audit.
Pets at Home Group Plc Annual Report and Accounts 2024
48
Audit and Risk Committee meetings
The Committee met on four occasions during the financial year with each meeting having a distinct agenda to reflect the annual reporting cycle
of the Group. The agenda is regularly reviewed and developed to meet the changing needs of the Group.
A summary of the key matters considered at each meeting is as follows:
Audit and Risk Committee Report continued
Meeting Financial reporting Risk management/internal control Internal audit External audit
May 23 – Review of the Annual Report and
Accounts for the period ended
30 March 2023
– Review of goodwill impairment
– Review of considerations of the Group’s
longer-term viability and going concern
– Review of matters raised in the FRC
letter in relation to the Annual Report
– Review of supplier income
recognition policy
– Review of operating loan
provisioning policy
– Review of consolidation consideration
for Joint Venture Companies
– Review of disclosures in relation to
acquisitions and disposals
– Review of Final Dividend
recommendation and
distributable reserves
– Review of Corporate Risk Register
– Review of principal risks for the
Annual Report
– Review of Whistleblowing policy
– Review of Health and Safety reports
– Review of Tax policy
– Review of Treasury policy
– Review of GDPR compliance
– Review of FY24
Internal Audit plan
– Review reports on
progress of the
Internal Audit plan
including holiday
pay review and stock
process review
– Report on
Annual Financial
Statements and
external audit
– Review of policy on
non-audit fees
September 23 – Review of Corporate Risk Register
– Review of the Internal Controls project
– Review of cyber security maturity and
controls and end of life IT assets
– Review of Whistleblowing reports
– Review of Health and Safety reports
– Review of Treasury policy
– Review reports on
progress of Internal
Audit plan including
Cyber threat
scenario, Senior
Accounting officer
and tax governance
arrangements (SAO),
Modern slavery and
Travel & expenses
– Review programme
on implementation of
internal audit actions
– Outcome of External
Audit tender
– Review of FY23
external consultancy
and professional
services spend
November 23 – Review of the Interim Financial
Statements
– Review of non-underlying costs
and the impact of the distribution
centre transition
– Review of goodwill impairment
– Review of considerations of the Group’s
longer-term viability and going concern
– Review Interim Dividend
recommendations and
distributable reserves
– Review of principal risks and the
related mitigation plans
– Risk management including review
of updated risk appetite
– Update in relation to the new practice
management system (‘PMS’) for the
Vet Group
– Review of Whistleblowing reports
– Deep dive review of Health and Safety
reports
– Update on revised UK Corporate
Governance Code
– Review reports on
progress of Internal
Audit plan and
update on actions
– Report on review
of Interim Financial
Statements
– Approval of External
Audit strategy for
the year ended 28
March 2024
– Approval of external
audit fees
January 24 – Review of cyber security maturity
– Review progress of the internal
Controls project and the revised UK
Corporate Governance Code
– Review of effectiveness of Profit
Protection framework
– Fraud risk assessment update
– Review of Whistleblowing reports
– Review of Health and Safety reports
– Review reports
on progress of
Internal Audit plan
including right to
work compliance,
SAP access security,
energy procurement
and Health & Safety
review (distribution
centre)
– Assessed
effectiveness of
Internal Audit
– Assessed
effectiveness of
External Audit
Financial Statements
49
Strategic Report Governance
Financial statement reporting matters
The Committee considered the significant matters in the year, considering in all instances the views of the Company’s External Auditor. The
Committee has assessed the key risks and emerging risks and considers the key risks within the financial statements to be the carrying value of
goodwill and parent Company’s investment in subsidiaries.
Issue Nature of the risk How the risk was addressed by the Committee
Carrying value
of goodwill and
parent Company’s
investment in
subsidiaries
The Group holds a significant goodwill balance,
and the Company holds significant investments in
subsidiary companies. There are several factors that
could impact on the future profitability and cash flows
of the business, such as the threat of competition,
changes in market behaviour, and changes in the
broader macro-economic environment (including
inflationary and recessionary pressures) and there
is a risk that the business will not meet the required
financial performance to support the carrying value of
the Group and Company’s intangible assets and the
investments in subsidiary companies.
The Committee reviewed and challenged management’s process for
testing goodwill for potential impairment, allocation of goodwill across
cash-generating units (CGUs), and ensuring appropriate sensitivity
analysis and disclosure. This included challenging the key assumptions
within each CGU: principally cash flow forecasts, growth rates and
discount rates and comparing the Group’s value in use to its market
capitalisation. This review considered the current geopolitical tensions,
energy prices, supply chain security, and inflationary pressures on the
Group’s financial performance and future cash flows and therefore the
carrying value of the Group and Company’s intangible assets.
The Committee also reviewed KPMG’s work and conclusions on this risk
and the key assumptions they tested in reaching their conclusions.
The Committee is satisfied that there is no impairment to the Group’s
goodwill balance or the Company’s investment in subsidiaries and that
there is appropriate disclosure in the financial statements.
Ongoing viability
In considering viability overall, the Committee reviewed the Group’s strategic plan with particular focus on the key assumptions in relation to
revenue, cost growth and cash flow management. Sensitivities to these key assumptions were also reviewed based on the impact of the Group’s
key risks, individually and conflated, as set out on pages 22 to 32. The review includes the consideration of the impact of wider macro-economic
factors including inflationary and recessionary pressures, supply chain stability, energy prices and geopolitical instability, and further operational
disruption on future cash flows, as well as the potential impact of climate change as set out in our TCFD scenario analysis.
Following a review of the detailed considerations set out above by the Committee and Executive Management Team, the Committee is satisfied
that it is appropriate for the Group to continue to adopt the going concern basis in preparing the Annual Report and Accounts of the Group and,
further, that the Longer-Term Viability Statement on page 90 is appropriate.
Fair, balanced and understandable
The Committee considered the Annual Report and Financial Statements for the financial year ended 28 March 2024, taken as a whole, including
the non-underlying costs associated with the relocation of the distribution centre and roup restructure, and climate risk-related disclosures.
The Committee has concluded that the disclosures, as well as processes and controls underlying its production, were appropriate and
recommended to the Board that the Annual Report and Financial Statements for the financial year ended 28 March 2024 are fair, balanced and
understandable, while providing the information necessary for shareholders to assess the Group’s position and performance, business model
and strategy.
Risk management and internal controls
Risk management and the system of internal control are the responsibility of the Board. It ensures that there is a process in place to identify,
assess and manage significant risks that may affect achievement of the Group’s objectives and that the level and profile of such risks is
acceptable (based on the Board’s risk appetite). The processes have been in place for the year under review and up to the date of approval of
the Annual Report and Accounts. The Committee provides oversight and challenge to the assessment of principal risks as set out on page 23.
The Group’s key risks and uncertainties are set out on pages 24 to 32. The three lines of defence governance model is set out on page 22 along
with the Board’s risk management process.
We continue to align with the TCFD requirements for climate related risks and opportunities, specifically around the physical risks, transition risks
and emerging risks around sustainable pet ownership.
The Committee explores specific key risks of the Group in detail, inviting the management team to discuss the matters and mitigations and
further proposed actions. During the year, the Committee considered risks specific to the Retail and Vet Group operations and key IT and
distribution projects, as well as cyber security and Health and Safety. The Internal Audit team is independent, appropriately skilled and has a
direct reporting line to the Committee. The Internal Audit plan is based on providing assurance on key risks, controls and compliance throughout
the year (see table of topics covered below). We use the varied experience of the Committee members to ensure assurance is focused on all the
right issues. The Committee reviews the reports and recommendations in detail and ensures that action is taken in a timely manner to improve
the control environment. The Committee has also performed risk reviews with management on a number of key risk areas as detailed in the
Audit and Risk Committee meetings section on page 48. The Board, through the Audit and Risk Committee, are satisfied that the internal control
framework is effective but acknowledges that the Internal Controls project is progressing to enhance internal financial controls, which both the
Board and Committee will continue to monitor in FY25.
Pets at Home Group Plc Annual Report and Accounts 2024
50
Assurance Framework
Assurance is the body of evidence that gives the ARC confidence that risk is being controlled effectively, or highlights where controls are
ineffective or there are gaps that need to be addressed. Our business assurance framework (‘BAF’) provides a structure for identifying and
mapping the main sources of assurance across the Group and co-ordinating them to best effect. It gives the ARC a clear understanding of the
types and quality of assurance currently obtained and consideration as to whether the assurance is proportionate to the level of risk and the
effectiveness key controls and processes that are relied on to manage risks. The BAF is updated annually or whenever there is a significant
change to our principal risks and is reviewed by the ARC as part of approving the risk based Internal Audit plan.
– The EMT confirmed three times this financial year to the ARC that the risk register accurately reflects their view of corporate risks across
their area of responsibility and that controls exist to provide reasonable assurance that risks are managed within appetite.
– The ARC conducted regular deep dives with EMT and operational management on principal risk areas, such as cyber security, and received
assurances that key business controls remained effective throughout the year or where gaps have been identified that remediation plans are
adequate. Please see page 23 for more detail.
– The Board monitors key performance indicators (both financial and non-financial) which would identify any material areas of concern.
– The ARC reviews the scope and results of both Internal and External Audit’s work, any significant issues arising and of the timely
implementation and effectiveness of agreed management actions.
– The ARC also receives regular reporting over whistleblowing disclosures, customer complaints, health and safety, profit protection, and
actions being taken to remedy significant control weaknesses.
Internal Audit
The Internal Audit function has a direct line of report into the Committee and is an important part of the independent assurance processes
within the business. The Committee reviews and approves the Internal Audit plan for the year which is developed to address key risks across
the business as well as reviewing core governance, financial and commercial processes.
The Head of Internal Audit and Risk attends each Committee meeting, updating on progress against the audit plan throughout the year,
reporting on any key control weaknesses identified and progress against mitigating actions.
Specific work performed during the year in our key risk areas included:
Meeting Work undertaken
Strategic – Project spice (distribution centre), capital project assurance
– Project polestar (digital capability), capital project assurance
– Project darwin (vet practice management system), capital project assurance
Operational – Vet – SAP security
– Cyber-threat scenario management
– Disaster recovery plans for principal IT systems – follow up
– Cloud strategy and management – follow up
– Retail distribution centre – Health and Safety
– Retail distribution centre stock receiving and return to vendor – follow up
– Customer complaints – product
– Retail pet welfare
– Supporting vet practice performance – follow up
Financial – Energy procurement
– Labour supply chain – agency workforce pay elements
– Vet – customer discounts
– Retail – customer discounts – follow up
– Group fraud risk assessment
Legal and regulatory compliance – Modern Slavery policy
– Anti Bribery and Corruption policy
– Right to work policy compliance
All reports, related findings and recommended actions have been discussed by the Committee and are tracked to completion.
Audit and Risk Committee Report continued
Financial Statements
51
Strategic Report Governance
External audit
KPMG presents their audit plan, risk assessment and audit findings to the Committee, identifying their consideration of the key audit risks for
the year and the scope of their work. These reports are discussed throughout the audit cycle. These risks were the carrying value of goodwill
(across the Group), the carrying value of the parent Company’s investment in subsidiaries, and management override of controls. In their reports
presented to the Committee at both the interim and full year, the auditors considered these risks to be appropriately addressed and raised no
significant areas of concern in these or any other areas of their review.
KPMG also attend the Committee meetings and meet separately, without management present, to discuss any matters in detail. Antony Whittle
was appointed as the Audit Partner for the year ended 28 March 2024.
In line with the Statutory Audit Regulation and Directive, we have completed a competitive tender process for the external audit of the Company.
The Committee recommended the appointment of Deloitte LLP (‘Deloitte’) as auditor of the Company for the 52-week period ending 27 March 2025
which has been approved by the Board. The appointment is subject to shareholder approval at the Company’s 2024 Annual General Meeting.
KPMG, the Company’s current auditors will step down following completion of the audit for the 52-week period ending 28 March 2024. A formal
handover process will be undertaken to ensure a smooth and effective transition from KPMG to Deloitte.
The Board would like to thank KPMG for their excellent service and good quality audits delivered with insights over the period since their appointment.
The tender process was run giving due consideration to the quality standards set out in the newly published Minimum Audit Standards for
Audit Committees. The evaluation criteria was clear on quality and effectiveness, depth of experience of proposed teams in the sector and ESG
Assurance. Each bidder presented to the Audit Committee members and was challenged on key aspects and references taken. The Committee is
satisfied that in Deloitte we will continue to have access to a robust audit.
External auditor’s effectiveness
The Committee considered the quality, effectiveness, independence, and objectivity of the external auditors through the review of all reports
provided, regular contact and dialogue both during Committee meetings and separately without management. Continuing from the process in
the previous year, we conducted an audit quality and effectiveness review through a questionnaire to Committee members, management, and
members of the finance and IT teams, which delivered focused insight into KPMG’s effectiveness. We considered the audit quality reviews on the
firm and sought confirmation that recommendations were appropriately actioned where relevant to the audits of our Company and Group.
Auditor independence
Maintaining the objectivity and independence of the external auditors is essential. The Committee has taken appropriate steps to ensure
that the Company’s external auditors are independent of the Company and obtained written confirmation from them that they comply with
guidelines on independence issued by the relevant accountancy and auditing bodies.
Additional non-audit services provided by the auditors may impair their independence or give rise to a perception that their independence may
be impaired. The Group has a policy in relation to the provision on non-audit services that is aligned with the EU Regulation and Statutory Audit
Directive to provide further clarity over the type of work that is acceptable for the external auditors to carry out. The policy sets out the process
required for approval and a cap to the total non-audit fees for permitted services (at 70% of the audit fee). The policy was last reviewed in the
year ended 28 March 2024.
Audit and non-audit fees paid to KPMG in the year were £1,378,000 and an analysis is presented in note 3 to the consolidated financial
statements. Non-audit fees represent 8% of the audit fee. Non-audit services provided by the external auditors during the 2024 financial
year comprised audit related assurance services, in the form of an independent review of the half-yearly statements and a financial covenant
compliance certificate. The Committee concluded that the provision of such services was appropriate given that they were closely related to
the work performed in the external audit process and, for reason of effectiveness and efficiency, it was considered advantageous to engage the
external auditors due to their knowledge and expertise.
Resolutions to appoint Deloitte as auditors and to authorise the Directors to agree their remuneration will be put to shareholders at the Annual
General Meeting that will take place on 11 July 2024.
Audit Committee effectiveness
During the year, a review was undertaken of the effectiveness of the Audit and Risk Committee. The Committee was found to be broadly effective
and aims to mature its oversight of the technology risks as the Group becomes more digitally focused.
Zarin Patel
Chair, Audit and Risk Committee
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
52
ESG Committee Report
What we did in 2024
– Continued to focus on the monitoring and delivery of our high
standards of pet welfare across the Group
– Overseen the implementation of the first year of the refreshed
sustainability strategy under the three headings of strategic
progress, embedding sustainability across the organisation and
continued focus on governance and controls
– Received an update and discussed the Group’s approach to
progressing sustainable pet food
– Monitored the progress of the Group’s alignment to the Task Force
on Climate related Financial Disclosure (TCFD) requirements
What we will do in FY25
In addition to our continued focus on pet welfare and ESG risks,
during FY25 we will continue to focus on the implementation of
the strategy and the embedding of this across the business:
– Monitor delivery against our net zero targets and how these
are embedded into the relevant business areas
– Agree the strategies and review progress in relation to the
sustainability strategic priority areas of pet food and supplier
scope 1 and 2 carbon maturity
– Strengthen the sustainability skills and capability across
the business
Introduction and strategic approach
The Committee oversees the governance of our sustainability
strategy. In my sixth year as Chair I am delighted to see the progress
that we have made in the first three years of the ‘Our Better World
Pledge’ strategy and the important step of refreshing it in FY23 to
align with the updated business strategy.
Our strategic approach to ESG is organised around three pillars of
Planet, Pets and People where the Group has material impact and
creates value. We believe these pillars are the right way through
which to approach our responsibilities and align with our Group
purpose, to create a better world for pets and the people who
lovethem.
In relation to the planet pillar, the strategy refresh placed an increased
focus on the Group’s response to the climate emergency and the
increasing concerns around bio diversity loss. This cuts across all
areas of the business, particularly the impact of pet care products
which make up the vast majority of the Group’s scope 3 emissions.
This delivery of the SBTi approved carbon reduction targets and
the transition to the 2040 net zero target are a key area of
committee discussion.
Recognising that the Group participates in a broad range of activities
and services involving pets, their welfare remains a central part of the
Committee’s focus and a standing item on every Committee meeting
agenda. The Committee maintains a regular and detailed review of
pet welfare. The Committee regularly reviews the Group’s policies and
procedures in relation to pet welfare in its retail business and supply
chain, and the development of its clinical governance framework in
the veterinary services business.
The Committee’s focus on people includes the approach to assessing
salient human rights risks across the operations and supply chains and
to diversity and inclusion.
The management committees established in FY20 to support Our
Better World Pledge strategy, have continued to meet on a regular
basis. Each of them is chaired by a Director and sponsored by an
Executive Management team member. Our ESG Director and Head
of Sustainability also attend all of these meetings. There has been
an update to our Pet Welfare Committee which is now attended by
all Executive Management team members and reviews pet welfare
governance and strategy from a clinical and retail perspective.
Susan Dawson
Chair of the ESG Committee
Who is on the ESG Committee?
Member
No. of
meetings
Susan Dawson (Chair) 3/3
Ian Burke 3/3
Dennis Millard 3/3
Zarin Patel 3/3
Roger Burnley 3/3
Stan Laurent 1/1
Angelique Augereau 1/1
Natalie-Jane MacDonald 1/1
Lyssa McGowan 3/3
A continued
focus on
pet welfare
Financial Statements
53
Strategic Report Governance
Committee membership
The ESG Committee, which meets at least three times a year, is
chaired by Susan Dawson. Acknowledging the importance of ESG
to the Group, five additional Board members have been selected
to attend the meetings. The CEO Lyssa McGowan is the Executive
member of the Committee. In addition Lucy Williams, Chief People and
Legal Officer, attends in her capacity of being the executive member
with ESG responsibility. Amy Whidburn, ESG Director, and Karlien
Heyrman, Head of Pets, attend each Committee meeting.
Highlights
A. Strategic progress
In addition to the focus on pet welfare, during the year the committee
has focused on a number of topics central to the delivery of the
ESG strategy:
Net Zero Transition
– At the February 24 ommittee meeting the eight net zero
priorities were reviewed along with the challenges to achieve the
goals. None of these challenges are unique to Pets and are shared
by other retail and consumer facing organisations. For example
the difficulties gaining consistent and easily accessed scope three
data and the need to transition agriculture to more sustainable
and regenerative methods. The ommittee was encouraged by
the recognition of these challenges and the mitigating actions
that had been put in place.
Leading in sustainable pet food
– Pet food is one of the eight net zero priorities and a particular
focus as it is a non discretionary purchase for pet owners. The
ommittee meeting in April 2023 discussed the sustainability
strategy for food and the proposed approach of introducing
robust carbon foot printing across the own brand food range using
in house resource and an outsourced platform. To complement
this, in depth lifecyle analysis (LCAs) will be conducted and the
ommittee was interested to review the results of the first phase
of these in the September ommittee meeting.
Human Rights
– The third Committee meeting in September 2023 received the
annual update on the Human Rights strategy and progress along
with the review and approval of the annual Modern Slavery
Act statement. The Group’s Human Rights specialist provided
a detailed update on ethical audit progress and the results of
the first in house audits in China since COVID-19 restrictions
have allowed. As expected China is an area of concern after
almost three years of not being able to conduct physical audits.
The Committee agreed with the recommendation to recruit an
additional ethical expert working from the Hong Kong sourcing
office who would be able to lead the ethical strategy in this region.
Diversity and inclusion
– The diversity and inclusion aim is to reflect the diversity of the
communities we operate in, which is reflected in the diversity
target to increase the representation of colleagues from ethnically
diverse background to 12% by 2028. The construction of this
target was discussed in detail to ensure it reflected the relevant
ethnic diversity community for different areas of the business.
B. Embedding the refreshed strategy
In the first year of the implementation of the refreshed strategy it
has been important to embed the strategy more broadly across the
different parts of the organisation and at every level:
– The tone for this has been set from by the Executive Management
Team having a proportion of their annual bonus dedicated to ESG
performance. The ommittee agreed that this would be measured
by the FY24 milestones being achieved across each of the 12
ESG targets.
– From a broader colleague perspective, the ommittee was
delighted to see the imaginative and fun way that planet
champions had been developed on the back of the ‘Big Listen’,
the colleague environmentally focused all colleague listening
campaign launched in FY23. The planet champions have met
twice in the year and the planet pack has been launched to every
vet practice and pet care centre.
– The sustainability team have focused on building capability across
the organisation through a number of ‘teach in’ and training
sessions covering a wide range of topics. This has included a one
day sustainability focused session for the leadership team (top
130) and a number of conscious inclusion sessions across support
office and field based teams.
C. Governance and Controls
Governance and controls continue to be reviewed in relation to the
refreshed strategy:
– The Committee reviewed the upcoming regulatory disclosure
scope and timings to ensure that the Group was prepared for
future reporting requirements
– The TCFD disclosure approach for FY24, including the inclusion
of initial quantification was discussed and approved
– Data controls have been developed and documented across all
the metrics used to measure the 12 ESG targets
– Limited assurance has transitioned to Deloitte for the FY24
reporting of Scope 1 and 2 emissions
The ToR for the ESG Committee were reviewed in the March 2024
oard meeting. The ToR can be found on the Pets at Home Group
investor website.
Susan Dawson
Chair of the ESG Committee
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
54
TCFD Statement
Introduction
Pets at Home recognise the climate emergency poses both risks and opportunities to our strategy and operations. To that end, sustainability
and climate change is featured as a principal risk within our Annual Report (see page 26). Pets at Home is required to comply with the reporting
recommendations of the TCFD (as set out in Listing Rule LR 9.8.6R). This report also meets the requirements for Pets at Home to comply with
CFD, a part of the Companies Act.
In this section, we outline our approach to climate-related risks and opportunities, which our scenario analysis concludes will likely present over
the long term which we define as between five and 20 years. In the last year we have made significant progress with our initial quantification of
climate change related risk over the long term and in progressing our mitigating actions, particularly in relation to transition risks associated with
de-carbonising pet care products.
Our disclosures are consistent with the TCFD’s four elements, and all of its 11 recommended disclosures, in line with the TCFD ‘Guidance for All
Sectors’ (LR9.8.6BG). Please see the table below for a cross reference index of these requirements and where to find them in our annual reporting.
In the interests of avoiding duplication the breakdown of scope 3 emissions into categories is contained on page 8 of our standalone sustainability
report on our corporate website.
Reporting boundaries and ‘Net Zero’ definition
Pets at Home Group adopts an operational control boundary approach for its selected greenhouse gas emissions data for the year ending
28 March 2024. This includes all sources of emissions over which the ompany has the full authority to introduce and implement its operating
policies. Under the ’Operational Control’ approach, 100% of the Scope 1 and 2 carbon dioxide equivalent (CO
2
e) emissions arising from Group
companies and subsidiary entities over which Pets at Home Group has operational control is included.
The decision was made in 2018 that Joint Venture veterinary practices would also be in scope for the business, under operational control, as
there are no separate meters installed for vet practices which are located within the same building envelope as retail units – this same rule was
applied to standalone Joint Venture practices to ensure consistency of approach. The ownership of the vet practices (Joint Venture or Company
Managed) is not used to determine their inclusion within our GHG reporting boundaries, both of these models are included. When anaesthetic
gas use was added to the reporting from FY20 the same approach was used and gas use from all Joint Venture veterinary practices was
included. This definition of ‘Operational Control’ is only applicable for the purposes of GHG accounting.
Where used across this statement and all other areas of corporate reporting the term ‘Net Zero’ is used to refer to our SBTi approved, 2040 net
zero C0
2
e reduction targets and associated priorities to deliver this target. Please see page 8 our ustainability eport for more detail.
TCFD index
TCFD elements TCFD recommended disclosures
Cross-reference
(page numbers)
Governance (a) Board oversight 55, 56
(b) Management’s role 55, 56
Strategy (a) Climate-related risks and opportunities 57–63
(b) Impact on the organisation’s business, strategy and financial planning 56, 59
(c) Resilience of the organisation’s strategy 60
Risk management (a) Risk identification and assessment processes 22, 61
(b) Risk management process 22, 61
(c) Integration into overall risk management 26, 61
Metrics and targets (a) Climate-related metrics in line with strategy and risk management process 26, 62
(b) Scope 1, 2 and 3 GHG metrics and related risks 64
(c) Climate-related targets and performance against targets 65
Financial Statements
55
Strategic Report Governance
Governance
Disclosure requirement Description of progress
a) Describe the Board’s
oversight of climate-
related risks and
opportunities
The Board led by the Chair, Ian Burke, has ultimate responsibility for sustainability and climate change and ensuring that
the strategy creates mutual value for stakeholders, including colleagues, customers, shareholders, and society. Oversight
of climate change strategy is a matter reserved for the Board, via the ESG Committee.
– The ESG Committee comprises all Non-Executive Directors and the Chief Executive and Chief Financial Officer and
is chaired by a Non-Executive Director. This Committee has a standing climate change item on every agenda. The
Committee meets at least three times a year and receives a written update at every meeting and an in-depth review
on an annual basis. The regular update includes a review of ESG risks and the status of climate-related projects and
initiatives. The in-depth review includes a progress update against the 2030 and 2040 carbon reduction targets vs a
2020 base. For example, in February 2024 the ESG Committee received an update on the eight net zero focus areas
and an overview of the key challenge areas and actions underway to mitigate. Scope 1 and 2 emissions are updated in
full on an annual basis and the forward forecast is refreshed and discussed.
– Climate-related skills and experience are included in the skills matrix of the Board of Directors included in the Annual
Report on page 43. During the year Zarin Patel, Chair of the Audit and Risk Committee and a member of the ESG
Committee undertook additional climate related training through the completion of a sustainability training course at
Imperial College, University of London. The Board provides challenge to the Executive Management Team on progress
against the goals and targets of the climate strategy and ensures the Group has an effective risk management system
in place. This is principally governed via two main Committees: the Audit and Risk Committee and the ESG Committee.
– In addition, climate change has been made a standing agenda item at every Board meeting since December 2022.
– Oversight and management of climate-related risks and opportunities occur at a number of levels in the
organisation.Chart one below summarises the key forums and members of senior management with responsibility
forclimate-related issues. The reporting lines flow up to the Board level band of Committees.
Across FY24, the Board made a series of key decisions relating to our climate-related risks and resilience strategy.
Examples include:
– The review, refinement, and approval of the initial financial quantification of the climate related risks and opportunities.
– As part of our strategic business review in FY23, capital was allocated across a 5-year timescale to enable investments
to further reduce our operational environmental impact and scope 1 and 2 emissions. For example, our shunters in our
new distribution facility in Stafford are exclusively using HVO renewable fuel. During FY24 the oard received updates
on the progress of these projects.
– A Scania HGV unit is currently on trial which runs off bio methane gas. The gas is produced from renewal waste
products (food and animal manure) and has significantly lower emissions and noise levels. These bridging solutions are
important to enable us to operate our fleet with a considerably reduced carbon footprint by removing the use of fossil
fuels. Both of these initiatives are key to enabling the business to achieve a 42% reduction in scope 1 and 2 emissions by
2030 vs a 2020 base.
Disclosure requirement Description of progress
b) Describe
Management’s
role in assessing/
managing climate-
related risks and
opportunities
The Chief Executive Officer has overall responsibility for climate change and sustainability topics.
– The Chief Executive is supported by the ESG Director and Executive anagement eam to develop and implement
the strategy through a number of management committees. Each committee is chaired by a Director. Our Better World
Pledge (OBWP) strategy includes climate strategy as a key pillar. Progress towards delivering this strategy is discussed
and updated at the Executive Management Team meeting on a regular basis.
– From FY24 our remuneration policy links an element of Executive remuneration to sustainability-related objectives,
and details can be found in the Remuneration Committee report from page 66 of this Annual Report.
As shown in chart one, the management of climate change projects is the responsibility of two principal committees:
1. The Climate Change and Waste Committee meets every six to eight weeks and is responsible for developing and
implementing the business strategy relating to operational environmental impact. This includes scope 1 and 2 energy
and carbon emissions for buildings, transport logistics, and waste management.
2. The Responsible Products Committee meets every six to eight weeks and is responsible for developing the strategy
for managing the value chain environmental and ethical impacts of our products. This includes human rights,
circularity and waste, packaging, raw materials, and scope 3 emissions of product ingredients, manufacturing, use
and disposal.
The governance of climate related matters in relation to the vet business is managed by the limate hange and aste
ommittee if it is in relation to scope 1 and 2 emissions from buildings and anaesthetic gases. The product related strategy
is managed by the Head of Sustainability working directly with the Vet Supplier Management team.
Each committee is responsible for climate-related idea generation, operational delivery, project management, KPI
development, and progress tracking. Progress is tracked using a project management approach that ladders up to period
reporting to the Executive Management Team and the Board.
Pets at Home Group Plc Annual Report and Accounts 2024
56
TCFD Statement continued
Chart one – Pets at Home’s Governance
Oversight and Management of Climate Related Risks and Opportunities
BoardOther Management
Plc Board. Responsible for the overall leadership of the Group including matters of Governance, Reputation, Environmental and
Social Sustainability.
Group Risk Manager and Business Risk Champions. Consider climate related risks and opportunities that impact the operations and
strategic priorities within their relevant business area.
Executive Management Team. Responsible for identifying climate related risks within their business function and delivering
the Climate Strategy.
CEO. Accountable
to the Board for the
implementation of the
Climate Strategy.
ESG Director. Responsible
for Climate Strategy
development and subject
matter expert.
CFO. Accountable to
the Board for integrating
climate related metrics
and targets into business
decision making and
reporting.
Head of Internal Audit.
Provides objective assurance
to the Board and Audit
and RiskCommittee on the
effectiveness of the Risk
Management Framework.
ESG Committee. Reviews and monitors the Group’s
approach to Environmental, Social and Governance topics.
Climate change is a key component of this.
Climate Change and Waste Committee. Responsible for
consideration of climate related risks and opportunities that
impact our business operations.
Responsible Products Committee. Responsible for climate
related risks and opportunities that impact products and broader
supply chains.
Audit and Risk Committee. Reviews and monitors the
Group’s Risk Management Framework which includes
climate related risks.
The chart above shows the key committee, forums and individuals with responsibility for climate related matters. All of these committees and
individuals report up to the Board. Escalation procedures are in place to enable responsibilities to be met.
Strategy
Strategic overview and context
During FY23, we updated our business strategy to create a single purpose for the business, ‘to create a better world for pets and the people who love
them’. Sustainability has been placed at the heart of our role ‘to build the world’s best pet care platform’. Our sustainability strategy was refreshed
in FY23 to ensure that we are prioritising actions to make a material impact and create a commercial advantage. Within the ‘Planet’ pillar of our
sustainability strategy we have provided more focus around the delivery of our Science Based Targets initiative (SBTi) approved near-term (2030)
and long-term net zero (2040) emissions reduction targets. We have created a new goal ‘to make pet care environmentally sustainable’ and plan to
achieve this by prioritising making pet food sustainable, which is the most important and complex of our carbon reduction pathways. Making pet care
environmentally sustainable is our strategy to manage and mitigate climate risks and develop climate resilience over the long term. In addition, we
see environmentally sustainable pet care as an opportunity to be leading and gain commercial advantage. In FY22, we conducted a qualitative
scenario analysis to review climate-related impacts. We developed three customised scenarios, each rooted in prevailing scientific evidence from
the Intergovernmental Panel on Climate Change (IPCC), theInternational Energy Agency (IEA) and Principles for Responsible Investment (PRI)
(see: Information box 1), and during a series of internal workshops reviewed climate-related impacts across our short, medium, and long-term time
horizons (see information box 3). These time frames have been selected because of the alignment with our business processes, cycles, strategic
goals and SBTi approved carbon emissions reductions targets (see information box 2).
The scenario analysis identified the high-level risks which were subjected to an initial materiality review and discussed with the Board. These
scenarios were selected because they were connected to the key elements of our business that drive our financial performance: the operation
of our UK retail and vet estate and supporting logistics infrastructure, the supply chains for the pet care products that we sell through our
omnichannel platforms and the long-term sustainability of pet ownership in a warming world which could impact pet numbers, pet breeds being
better or less well suited and changing health factors. Last year we reviewed these risks and opportunities further through analysis and research.
We have grouped the risks into three over-arching categories under which the high-level risks now sit: ‘physical risks,’ transition risks’ and
‘sustainable pet ownership’. The first two sit together under our Group principal risk of Sustainability and Climate Change, the third is categorised
as an emerging risk. This third risk is monitored via the Group watch list of emerging and developing threats, where the timeline, impact or
potential mitigation is not yet clear.
These risks and our analysis are summarised in information box 3.
Financial Statements
57
Strategic Report Governance
Information box 1 – a qualitative scenario analysis was conducted in FY22, this information box summarises the underlying
assumptions used to develop these scenarios
Climate-related
scenario
Scenario analysis
coverage
Temperature
alignment of scenario Parameters and assumptions
Physical and
transition scenarios
Company-wide 1.5˚C Action taken has achieved the aims set out in the 2015 Paris Agreement to limit
climate change to below 1.5˚C of pre-industrial levels, but with significant shifts in
policy, cost and consumer behaviours. The scenario was developed by incorporating
scenarios which are rooted in prevailing scientific evidence. Specifically:
– Representative Concentration Pathway (RCP) 2.6
– Shared Socioeconomic Pathway (SSP) 1
– PRI Inevitable Policy Response (IPR): 1.5C Required Policy Scenario
Physical and
transition scenarios
Company-wide 2˚C Not much has changed from today. Some action has been taken, but it’s very
much business as usual. Uncertainty increases, and impacts of a changing climate
manifest themselves in vulnerable parts of the world. The scenario was developed
by incorporating scenarios which are rooted in prevailing scientific evidence.
Specifically:
– RCP 4.5
– SSP 2
– PRI IPR: Forecast Policy Scenario
Physical and
transition scenarios
Company-wide 3˚C Economies around the world have continued to be powered by fossil fuels. As a
result, the planet is in crisis and well past the point of no return by 2030. Global
warming has accelerated and changes in climate are all around, tangible and, in
some cases, catastrophic. The scenario was developed by incorporating scenarios
which are rooted in prevailing scientific evidence. Specifically:
– RCP 6.0
– SSP 5
Information box 2 – time horizons
The following time horizons have been used:
Time period Years Reason
Short 0 to 3 years Aligns to our business financial forecasting cycle
Medium 3 to 5 years Aligns to our strategic planning cycle
Long 5 to 20 years Longer term captures the transition and physical risks and opportunities and aligns to our long-term carbon reduction targets
Information box 3 – risk summary
Risk
Time frame Scenario
Short Term
0–3 years
Medium Term
3–5 years
Long Term
5–20 years 1.5/2°C 3°C
Physical Unlikely Unlikely Likely Probability: Low Moderate
Impact: Minor Moderate
Transition Unlikely Unlikely Likely Probability: Moderate Low
Impact: Major Minor
Sustainable
Pet Ownership
Unlikely Unlikely Likely Probability:
Emerging
Impact:
The impact of these climate-related risks on our businesses and strategy are further disclosed in the following tables. Our initial assessment has
identified that in the long term there could be material financial impacts which have been included in the risk summaries below.
Pets at Home Group Plc Annual Report and Accounts 2024
58
TCFD Statement continued
TCFD Strategy Disclosure requirement sections a and b: Description of climate-related risks and opportunities
identified and their impact on business, strategy and financial planning.
1. Physical risk – category: Chronic. 3°C scenario
2. Transition Risk – categories: regulatory requirements and reputation. 1.5°C scenario
Description of risk:
Cost of repair and/or loss
of revenue from assets and
supply chain disruption.
Extreme weather events
affecting continuity of
own operations, supply of
products and sales (stores,
distribution centres, vet
practices) and disrupting
supply chain sourcing
(raw material sourcing and
supplier operations).
Business impact:
Modelling of our UK sites indicates that the
vast majority are not located in areas of flood
risk. While we have observed weather events
increase in severity and frequency over recent
years, operational impacts have been minor
and further incidents in the short and medium
term can be managed within the framework
and cost of existing controls.
The majority of our pet food is sourced from
the UK. Initial assessment of raw material and
manufacturing exposure to risk of extreme
weather events in the short and medium term
is assessed as low. Further work is required to
understand long-term impacts on UK farming
and raw material availability.
Our accessories ranges are predominantly
sourced overseas. Initial assessment of raw
material and manufacturing exposure to risk of
extreme weather in the short and medium term
is assessed as low. Further work is required to
understand long-term weather-related impacts.
Proximity:
Long term (five to 20 years)
Risk rating before mitigation:
Probability: Moderate
Impact: Minor – Moderate
As climate change persists,
we expect these effects to
increase in the long term and
our broader supply chains
could be vulnerable.
Risk management and
mitigation actions:
– Ongoing assessment of climate-related
weather vulnerabilities in relation to our
operations, suppliers and raw materials.
– Monitoring the frequency and severity
of climate-related weather events.
– Regular review of business continuity
plans for the distribution centre.
– Conducting climate risk reviews
proactively ahead of decisions to locate
new operational infrastructure or select
new suppliers.
– Continuing to strengthen our long-
standing relationships with key suppliers
and freight partners.
– Maintaining sourcing location flexibility,
across the medium to long term, to switch
supply lines away from areas of emerging
risk, including review of weather-related
risk when new sourcing locations are
being considered.
Description of risk:
Increase in the cost
ofdoingbusiness.
Operational and value
chain decarbonisation
– inability to efficiently
transition our value chain
and products and services
to low carbon models.
Possible introduction
of more stringent
environmental regulation
has the potential to
increase the cost
of production and
operational flexibility, as
carbon costs become
increasingly internalised.
Business impact:
Increased operating costs relating to the
transition to a low carbon economy e.g.,
higher energy costs, changes in production
costs, and direct and indirect carbon taxation
e.g., meat tax on pet food.
Capital investments relating to uncertainty
and nascent development of low carbon
technology e.g., alternative fuels for
distribution vehicles. Market competition
and unpredictable costs relating to delivery
of our carbon transition plan, particularly in
relation to the availability and demand for
new products and services e.g., high quality
carbon removal opportunities.
Products and services not transitioned
quickly enough to low carbon models to
meet consumer shift in preference to lower
impact pet food and low carbon accessory
products resulting in loss of revenue and
reputational damage.
Proximity:
Long term (five to 20 years)
Risk rating before mitigation:
Probability: Moderate
Impact: Moderate/Major
Risk management and
mitigation actions:
– Business case – capital allocation to
invest in operational infrastructure to
reduce operational carbon, such as the
investment committed of £1.2m for solar
at our Stafford Distribution centre.
– Long-term supplier partnerships to
enable collaboration and investment in
innovative R&D solutions.
– R&D investment to develop the market
for animal-meat alternatives through
the Group investing in 8.5% of shares
in Good Dog Food ltd (‘Meatly’) for
a consideration of £1m. Providing an
opportunity to become the market
leader in alternative pet food protein
for consumers, a potential revenue
opportunity.
– Pet food strategy – mitigation of meat
protein tax could include pass on to
customers to enable switching to lower
carbon options.
– Supplier engagement underway to
decarbonise supply chain.
Financial Statements
59
Strategic Report Governance
Financial planning
Climate related risks and opportunities are considered within financial planning. We have analysed the risks in the short to medium term, which
we classify as now to five years, and have carried out financial quantification of the potential impact over the long term (five to 20 years). We have
not completed quantification on ‘sustainable pet ownership’ due to the very low probability of this risk as described in the risk summary above.
This financial quantification has been developed over the last year and is shown in information box 6, with note that future improvements in
methodologies are likely to lead to more certainty around this analysis. This analysis has been built into the going concern assessment detailed in
note 1.3 on pages 107 and 108 and the goodwill impairment testing in note 13 on pages 129 and 130. Our ESG materiality review includes climate
action and pet food sustainability as material topics and is referenced in our resilience statement on page 60. In the interest of duplication we
have not included this full materiality assessment in this statement; it can be found in our standalone sustainability report.
Information box 4 – Financial impact assumptions Information box 5 – Carbon tax assumptions
Risk Reason Tax range £ per tonne
Extreme >£15m on sales revenue Low £18 per tonne
> £6m Profit Before Tax (PBT) Medium £34 per tonne
Major > £5m < £15m on sales revenue High £50 per tonne
>£2m < £6m PBT
Moderate >£1m <£5m on sales revenue
>£400k to £2m PBT
Minor >£200k < £1m on sales revenue
>£100k <£400k PBT
3. Sustainable Pet Ownership – Category: Market. 3°C scenario
Description of risk/
opportunity:
Emerging
Pet ownership – changes
in pet ownership, over
the long term driven by
potential cost increases
of pet care, due to the
manifestation of physical
and transitional risks.
Changes in consumer
attitudes to pet ownership,
where owning a pet may
be viewed as irresponsible
in a warming world.
Counter balancing
these is the opportunity
of increased customer
revenue and market
share from Pets at Home
leading the market
for environmentally
sustainable pet care,
in a warming world.
Business impact:
The implicit and explicit price of carbon
drives up prices and general living costs are
squeezed. At the same time pet ownership
becomes socially unacceptable as consumers
seek to reduce their environmental impact
and pets are seen as a luxury and climate
burden. In this scenario, pet numbers fall as
fewer consumers opt for pet ownership.
Expanding products and services marketed as
environmentally sustainable drives revenue
and market share, as consumers switch to
sustainable brands.
Proximity:
Long term (5 to 20 years)
Risk rating before
mitigatingaction:
Probability: Very Low
Impact: Moderate
Pet ownership has
historically been resilient
to economic and social
factors, this seems unlikely
to change over the next 10
years. Market insight on pet
ownership and trends offers
early signals to changes. Our
experience suggests these
will be gradual over time.
This risk is monitored via
the Group watch list of
emerging risks, where the
timeline, impact or potential
mitigation is not yet clear.
Risk management and
mitigation actions:
Our strategy is to make pet care
environmentally sustainable, thereby
neutralising potential consumer
concerns that pet ownership is
socially unacceptable.
– Strategic investment in priority areas
such as pet food to identify lower
carbon ingredients and manufacturing
processes that meet consumer
expectations.
– Ongoing long-term monitoring of
consumer and societal attitudes to
pet ownership.
– Regular monitoring of consumer and
market trends to identify shiftsin
behaviour to which we canrespond.
– Frequent planned range reviews
to respond to change in consumer
preferences.
– Championing the benefits that pets
bring to our lives, e.g., enhanced
wellbeing via consolidation of
existing research.
Pets at Home Group Plc Annual Report and Accounts 2024
60
TCFD Statement continued
Area/scope
Risk/opportunity
category Risk modelled
Potential long-term impact
on our business, based on
FY24 financials, before
mitigating actions
Quantification
of impact
Targets in place to manage
this risk
Operational
carbon emissions
Transitional risk: policy
and legislation
Carbon tax on scope 1 & 2
location based emissions
Potential PBT impact
within operating costs
of £0.4m to £1.2m
Moderate – Scope 1 and 2 reduction
targets
UK property
estate
Physical: managing
infrastructure and
operations in extreme
weather
Flood and extreme weather risk Potential PBT impact
within operating costs
of < £400k
Minor n/a
Animal protein Transitional risk: policy
and legislation
Carbon tax on animal protein
included as an ingredient in
pet food own brand and
supplier branded
Potential PBT impact
within cost of sales
of £1.7m to £4.7m*
Moderate/Major – Scope 3 reduction targets
– Own brand pet food products
carbon footprinted
– Suppliers with leadership
position carbon reduction
programmes in place
* The analysis on the impact of a carbon tax on animal protein assumes that this obligation is all passed onto Pets at Home and is not fully or partially borne by producers, suppliers
or consumers.
TCFD strategy disclosure requirement section c: Describe the resilience of your strategy, taking into consideration different
climate related scenarios, including a 2°C or lower scenario
The scenario planning work was conducted using three different warming scenarios. These have been used to develop the impact on our
identified physical, transitional and emerging risks and this has then informed our strategic response to ensure that we are developing a resilient
strategy. Our sustainability strategy ‘Our Better World Pledge’ was refreshed during FY23 which has enabled this latest work on risk at different
warming scenarios to be a key consideration in developing our response. The key element of this strategy update has been the prioritisation
of our scope 3 emissions, and within that, pet food as the largest impact area and a non-discretionary purchase for petowners. Our materiality
assessment identified sustainable pet food and climate action among the top sustainability topics to address.
Our strategic response to the physical risks following our analysis focuses on monitoring. Our UK based operations present a lower risk of extreme
weather events and our supply chain locations remain flexible in the long term, which provides resilience to the most extreme (3°C) scenario.
Within the supply chain the majority of our pet food suppliers are UK based and this remains our strategy.
The impacts of a lower warming scenario (1.5°C) on our transitionary risks are higher as more change and investment would have been required
to enable the temperature increases to be contained at lower levels. Our strategic response is to ensure a smooth transition as we work
with our suppliers to decarbonise supply chains and products and as we invest in areas of technological potential to support the long-term
transition (such as cultivated meat). Strategic resilience will be ensured through working consistently towards the long-term goals often before
our customers are demanding changes to products. We have been investing in our operational decarbonisation for many years, purchasing
renewable energy since 2017 and investing in LEDs and buildings’ energy management systems. As we make new investments our strategy is
to consider how we can do this in a carbon efficient way, for example our new DC in Stafford does not use natural gas and we are investing in
solar. We acknowledge that their remains uncertainty on the speed of progress required to meet challenges that will enable Pets to mitigate the
transitionary risks. These are not unique to our business which is why we collaborate across our industry and supply chains to accelerate change.
For example the decarbonisation of heavy goods vehicles, the adoption of regenerative, more sustainable agricultural practices and robust
primary scope 3 data.
Our emerging risk around pet ownership could present in any of the different warming scenarios. Our strategy of making pet ownership
sustainable is relevant and builds resilience through reducing the impact of owning pets and reducing the likelihood of pet ownership as being
viewed as a luxury. Equally our strategy of celebrating the benefits that pets bring to our lives builds resilience by demonstrating valuecreation.
We will continue to review our strategic approach to ensure it aligns to the prevailing scientific advice and best practice.
Information box 6 – Financial quantification summary
Financial Statements
61
Strategic Report Governance
Risk Management Framework
Principal Risks
• Risks that could threaten our business model, future
performance, solvency or liquidity.
• Material climate related risks are captured under the principal
risk Climate Change and Sustainability.
The Group’s
emerging risks are
assessed and agreed
by the Executive
Management Team
and the Board. A
watch list of emerging
and developing
threats is maintained,
and these flow into
our risk framework at
the appropriate level
for each risk.
Corporate Risks
• Risks that are promoted from a business level risk register as
they sit near to or above the appetite level set by the Board.
• Owned by an Executive Director, ESG corporate risks being
owned by the Chief Executive Officer.
• Reported in detail to the Executive Management Team, the
Board and A&R Committee 4 times a year.
Business Risks
• Risks that are identified and managed at a business unit,
strategic project or function level.
• The ESG function has its own risk register.
• The ESG Director owns and manages climate related risks and
implementation of mitigating actions.
• Grouping of climate related risks in roup wide risk
management system for reporting to ESG.
Principal
Risks
Corporate Risks
Business Risks
Chart Two – climate-related risks are fully integrated into our overall risk management approach
Risk Management
Disclosure requirement Description/progress
a) Describe the processes
for identifying and
assessing climate-
related risks.
The initial process for identifying climate risks for TCFD took place through a series of scenario planning workshops.
These included detailed horizon scanning briefings and then consideration of the implication through the eyes of the key
stakeholders of the business (pet, customer, vet, store manager, supplier) in three different global warming scenarios (see
information box 1). This led to the eight high level risks and opportunities to be created. This process and its outcomes were
reviewed by the Executive Management eam and the ESG Committee. These eight high level risks and opportunities have
been refined and consolidated into the three ESG risks that sit under the principal risk of sustainability and climate change.
On an ongoing basis risks are identified through the risk management system. At a business level this happens using the risk
champions who include ESG risks as part of their risk assessment for their respective areas of the business. Additionally the
climate change and responsible products committees are responsible for identifying climate change risks. On an annual basis
overall ESG materiality assessment is reviewed, and this includes detailed consideration of established and emerging topics
that are relevant to climate change. Atthis annual review the ESG Committee also reviews existing and emerging regulatory
requirements related to climate change. On a three yearly basis this materiality review becomes a deep dive exercise where
external stakeholder feedback is gathered to horizon scan topics and review assessment of importance.
These risks are assessed using the corporate standardised risk scoring methodology which includes measurement of
likelihood, impact, and proximity. This produces a gross risk score before mitigating actions. This aids the escalation
andconsolidation of risks into a Group-wide view. See the risk framework on page 22 of this Annual Report.
b) Describe the processes
for managing climate-
related risks.
The climate related risks are managed using our corporate risk management framework. Each risk has a gross, net score,
and a target score where the risk is not within appetite. Mitigating actions are then monitored for expected remediation
of the risk and progress towards the target score. This mitigation strategy assigns owners and timescales to each
action. Progress against the strategy is updated and reported to the xecutive anagement eam and the Audit and
Risk Committee four times a year. In addition, our climate risks, along with other ESG risks, are reviewed at each ESG
Committee meeting, which meets at least three times a year.
Examples of risk mitigation and management exercised for transition risks include engaging suppliers to commit to
havingcarbon reduction plans in place by 2028.
c) Describe how processes
for identifying, assessing,
and managing climate-
related risks are
integrated into overall
risk management.
Chart two demonstrates how Pets at Home’s climate-related risks are fully integrated into our overall risk management
approach. Climate related risks are identified, assessed, and managed through the corporate risk management
approachwhich classifies risks as business, corporate or principal risks. Our ability to identify, assess and effectively
manage current and emerging risks is critical in ensuring the continued success of our business.
Pets at Home Group Plc Annual Report and Accounts 2024
62
Metrics and targets
Disclosure requirement Description/progress
a) Disclose the metrics
used to assess climate-
related risks and
opportunities in line
with its strategy and risk
management process.
These metrics are used to monitor our performance in managing and assessing climate-related risks and opportunities
identified in the Strategy section.
Physical risks
– Tracking the impact of extreme weather events on our UK infrastructure.
– Mapping and tracking supply chain locations for tier 1. Mapping location of tier one own brand factories, disclosed
on our corporate website.
– Tracking of extreme climate related weather events and impacts in operations and supply chains. This is a new area
and we are considering how we can track starting with our operations (lost business and repair costs).
Transition risks
– Monitoring the proportion of own brand pet food range with carbon footprinting completed. This was a new metric
introduced in FY24, progress is included in the Sustainability Report on page 40 and in Case Study 1.
– Monitoring the percentage of suppliers with scope 1 and 2 carbon reduction plans in place. This was a new metric
introduced in FY24, progress is included in the Sustainability Report on page 40 and in Case Study 2.
Sustainable Pet Ownership an emerging risk
– Ongoing long-term monitoring of consumer and societal attitudes to pet ownership.
– Regular monitoring of consumer and market trends to identify shifts in behaviour to which we can respond.
In addition, Pets at Home reports using the SASB methodology. We complete the CDP climate change disclosure on an
annual basis, our latest disclosure achieved an overall score of ‘B’.
b) Disclose scope 1, scope
2, and, if appropriate,
scope 3 greenhouse gas
(GHG) emissions, and the
related risks.
Pets at Home has measured and disclosed our scope 1 and 2 CO
2
e emissions since FY14. Trend data from FY16 is
updated and reported annually and included in table 1. We measured our scope 3 baseline of 2019/20, in order to
set net zero targets, and this has been validated by the Science Based Targets initiative (SBTi). During FY24 we have
updated this baseline using FY23 data and this is included in table 2. We have begun to plan for the work to include
Forest, Land and Agriculture (FLAG) emissions in our scope 3 baseline, in line with SBTi’s FLAG requirement.
Scope 1 and 2 emissions and related risks
During the year we have continued to invest in energy reducing initiatives. We have run an education campaign with
colleagues to further reduce our use of energy in our buildings by issuing a ‘planet pack’ to every pet care centre and
vet practice. All of our forklifts at our DCs are now electric. We have moved our company car fleet list to a low carbon
selection and 89% of our company cars are now either EV or hybrid.
Our absolute carbon emissions have reduced by 3.5%. Our intensity-based performance has continued to improve year
on year at 15.7 tonnes CO
2
e relative to £1,477m revenue.
Our scope 1 emissions increase of 4.3% has been primarily caused by the reconfiguration of our distribution network
leading to increased trunking of stock and a 4.3% increase in diesel emissions. Emissions from our company fleet
increased by 47.9% as colleague travel increased and a larger proportion of vehicles were hybrid vs electric. This is a
relatively small source of emissions at 615 tonnes and is 43% lower than our FY20 base year emissions of 1082 t CO
2
e as
we have introduced hybrid and electric cars into our fleet. Anaesthetic gas emissions in our vet business had a slight
increase of 1.8%, but considerably below the growth rate of the Vet business.
Our scope 2 emissions have shown a reduction of 11.3% benefiting from a mild winter.
Our performance over the longer term continues to demonstrate the importance of carbon reduction to our business.
Since 2016 our sales revenue has grown by 86.3 % and our absolute emissions have reduced by 43.5% as shown in
table 1.
Deloitte has provided independent limited assurance in accordance with the international Standard for Assurance
Engagements 3000 (ISAE 3000) issued by the International Auditing and Assurance Standards Board (IAASB) over the
scope 1 and 2 emissions. Deloitte’s full unqualified assurance opinion, which included details of the selected metrics
assured, can be found on page 44 of the standalone Sustainability Report.
The basis of reporting document covering our scope 1 and 2 emissions and the limited scope 3 categories that are
included in our assurance (colleague travel, 3rd party logistics and electricity distribution and transmission losses) is
available on our corporate website at https://www.petsathomeplc.com/sustainability/documents-policies/documents/.
Scope 3 emissions and related risks
Our scope 3 emissions, re-assessed during the year using FY23 performance data, have increased by 12.6% vs our base
of FY20 which is below the increase in our roup revenue of 32.6% over the same period. Page 8 of our standalone
ustainability eport provides more information on the category breakdown of our scope 3 emissions and the eight net
zero priorities to reduce our emissions (see Case Study 1 and 2 for examples of progress against two of these priorities).
TCFD Statement continued
Financial Statements
63
Strategic Report Governance
Pet food carbon footprinting
Modelling emissions using secondary data will not be
sufficiently detailed as we embark on understanding and
reducing the impact of pet food. For that reason, during FY24
we have begun a programme of carbon footprinting our own
brand pet food products. This follows from a detailed life cycle
analysis (LCA) that expert consultancy 3 Keel conducted on 14
pet food products that included the key formats and ingredient
types. We will continue to conduct detailed LCAs on key pet
food and accessory products while we fast track our in house
carbon footprinting programme. The carbon footprinting
programme is being enabled through the use of a third party
footprinting tool which has been used by other progressive
consumer goods companies. By the end of April 2024 we
have completed this analysis for over 60 of our higher volume
products representing over 15% of our own brand pet food sales
revenue. Combined with the LCA analysis this will enable us
to model and measure the carbon reduction activities that we
have developed. Ultimately we plan to be able to communicate
the carbon impact of products to our customers to help them
to make informed choices and we are accelerating our work to
have all priority pet food lines carbon footprinted.
Measuring, managing and
reducing our suppliers’ emissions
One of the biggest challenges that we and other retailers face
to rapidly decarbonise our supply chains, is data. Over the last
year we have been focused on reviewing potential programmes
and partnerships that will help us. We have decided to join
Manufacture 2030, a cross industry platform that supports
our suppliers to measure, manage and reduce their emissions.
The software enables suppliers to share data with other
retailers who are members. This makes it an efficient model
for our suppliers and also means that we will be contributing
to enabling decarbonisation to happen more quickly. We have
set a target that by 2028 all of our priority suppliers will have
a carbon reduction plan in place and that 50% would have
reached leadership position. This target and the Manufacture
2030 platform were launched to our suppliers at our September
2023 supplier conference.
Case study 1 Case study 2
Pets at Home Group Plc Annual Report and Accounts 2024
64
Carbon reporting summary
Table 1: Scope 1 & 2 carbon emissions nine year performance tonnes CO
2
e emissions
Tonnes CO
2
e emissions
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24* FY24 vs FY16
Scope 1 9,498 9,619 9,649 8,431 12,085 11,337 12,558 12,115 12,632* 33%
Scope 2 (location based) 31,680 28,840 21,584 17,066 15,133 13,616 12,610 11,980 10,624* -66.5%
Total 41,178 38,459 31,233 25,497 27,218 24,953 25,168 24,095 23,256 -43.5%
% change -6.6% -18.8% -18.4% 6.8% -8.3% 0.9% -4.3% -3.5%
Group
Revenue
£m 793** 834 899 961 1,059 1,143 1,318 1,404 1,477 86.3%
% change 5.2% 7.8% 6.9% 10.2% 7.9% 15.3% 6.6% 5.2%
Normalisation/Intensity 51.9 46.1 35.1 26.5 25.7 21.8 19.1 17.2 15.7 -70.2%
% change -11.2% -24.7% -23.6% -3.1% -15.1% -12.5% -10.1% -8.3%
Table 2: Scopes 1, 2 and 3 carbon emissions summary
Metric Target
2023/2024
Performance
2022/2023
Performance
Base year
Performance
(2019/2020)
SCOPE 1 AND 2 GHG EMISSIONS
Direct emissions from operations (Scope 1)
(tonnes CO
2
e)
– 12,632* 12,115 12.085
Location-based indirect energy emissions from
operations (Scope 2) ( tonnes CO
2
e)
– 10,624* 11,980 15.133
Total location-based Scope 1 and 2 emissions
(tonnes CO
2
e)
42% reduction by 2030
(vs 2019/20 base year)
23,256: 14.6% reduction
against base year
24.095 27.218
Market-based indirect energy emissions from
operations (Scope 2) ( tonnes CO
2
e)
– – – 677
Total market-based Scope 1 and 2 emissions
(tonnes CO
2
e)
– 12,632* 12,115 12,762
Total location-based emissions per £m group
revenue (tonnes CO
2
e per £m group revenue)
– 15.7 17.2 25.7
Scope 1 and scope 2 kwh 88,228,750 96,138,431 94,638,109
SCOPE 3 GHG EMISSIONS
Total Scope 3 GHG emissions (tonnes CO
2
e) 42% reduction by 2030
(vs 2019/20 base year)
n/a (2) 963,976 12.6% increase
against base year
855,828
1
Re-classification: Greenhouse gas emissions from natural gas were incorrectly allocated to scope 2 in FY22/23 therefore 406 tCO
2
e have been moved from scope 2 to
scope 1.
2
Scope 3 GHG emissions have been updated using FY22/23 data. An update has not been completed for FY23/24 as we have focused on preparations for the completion
of a re-assessment to align with the requirements of the SBTi FLAG guidance.
3
Scope 3 emissions relating to employee travel, 3rd party logistics and electricity transmission and distribution losses have been removed from our carbon emission
summary because they were misinterpreted as representing the full scope 3 emissions. For transparency the emissions from these sources in FY23/24 are included here.
Employee travel 726 tonnes CO
2
e (FY22/23 620 tCO
2
e); 3rd party logistics 3,955 t CO
2
e (FY22/23 3,603 tCO
2
e). Electricity transmission and distribution losses 920 tCO
2
e
(FY22/23 1,096 CO
2
e).
4
Pets at Home operations are UK based except for an office in Hong Kong. Therefore 15t CO2e representing less than 0.1% scope 1 and 2 emissions and KWH usage was
from outside of the UK and not included in this reporting.
5
* see footnote of table 1 for assurance statement.
TCFD Statement continued
* Deloitte has provided independent limited assurance in accordance with the international standard for assurance engagements 3000 (ISAE 3000) issued by the
International Auditing and Assurance Standards Board (IAASB) over scope 1 and 2 emissions for FY24. Deloitte’s full unqualified assurance opinion, which includes details
of the selected metrics assured, can be found in the standalone Sustainability Report on page 44
** FY16 Group Revenue has been restated to reflect a 53 week financial year. All emissions and revenue numbers are disclosed on a 52 week basis except for FY16 and FY22.
1
Exclusions: Anaesthetics & fugitive emissions are included from year FY20 onwards.
2
Re-classification: Greenhouse gas emissions from natural gas were incorrectly allocated to scope 2 in FY23. Therefore in FY23 406 tCO
2
e have been moved from scope 2
to scope 1 and in FY22 590 tC0
2
e have been moved from scope 2 to scope 1. This does not change the total scope 1 and 2 emissions.
Emissions
Financial Statements
65
Strategic Report Governance
Metrics and Targets
Disclosure requirement Description/progress
c) Describe the targets
used to manage
climate-related risks
and opportunities
and performance
againsttargets.
At Pets at Home, we have taken the decision to set our carbon emissions target using the guidance of the Science
Based Targets initiative (SBTi). We have made this decision because science-based targets provide companies with
a clearly defined path to reduce emissions in line with the Paris Agreement goals.
– Near term: Pets at Home commits to reduce absolute scope 1 and 2 GHG emissions 42% by FY30 from a 2020
baseyear.
– Near term: Pets at Home commits to reduce absolute scope 3 GHG emissions from purchased goods and services,
and upstream transportation and distribution 42% by FY30 from a 2020 base year.
– Long term: Pets at Home Group commits to reduce absolute scope 1 and 2 GHG emissions 90% by FY40 from a 2020
base year. Pets at Home Group also commits to reduce scope 3 GHG emissions 90% within the same time frame.
These targets have been approved by the Science Based Targets initiative. Actions and progress to achieve these
targets are reported in our Sustainability Report on page 8.
Related targets:
– By 2028 all priority own brand food products to be carbon footprinted. This is a new target for FY24 and progress is
included in the FY24 ustainability eport on page 40 and in case study 1 on page 63 of the Annual Report
– By 2028 all priority suppliers to have carbon reduction plans in place and 50% to have achieved leadership status.
This is a new target for FY24 and progress is included in the FY24 ustainability eport on age 40 and in case study 2
on page 63 of the Annual Report
– By 2028 all priority raw materials to be sustainable and packaging recyclable. These are existing targets and our
reporting can be seen on page 40 of our standalone ustainability eport.
– By 2028 create, protect and restore 15k acres of UK native woodland (2020 base). This is an existing target and our
reporting can be seen on page 40 of our standalone ustainability eport.
We also identify other opportunities to align our targets to climate reduction goals. For example, our revolving credit
facility with HSBC acting as sustainability coordinator, agreed in March 2022, is linked to sustainability targets.
The Group now has financial incentives (or penalties) to accelerate our work on pets, people and planet through
targets focused on carbon reduction, supporting pets in need and community action. Our performance against our
sustainability linked loan can be seen on page 16 of this Annual Report and on our corporate website.
Our remuneration policy links an element of Executive remuneration to sustainability objectives, effective from FY24.
See from page 66 of this Annual Report for more details.
Looking ahead
Overall we are pleased with the progress that we have made over the last year particularly in the scope 3 emissions reduction programmes
featured in case study 1 and 2 and in the quantification of long-term risk.
At this stage we are not able to quantify the impact of the scope 3 emissions reduction programmes in our total reported scope 3 emissions
which are based primarily on secondary emissions data. We are working hard to address this through adopting processes that will support the
capture of primary product carbon data.
Financial quantification work to date has been completed on the areas identified as potentially having the most material impacts. While our
quantification disclosure uses the most robust data points that we have, we recognise that the methodology for quantifying risk will continue to
develop over time as our data and modelling improves.
Despite our progress their remain challenges that face businesses like ours to the delivery of our emissions reduction targets. For example the
development of battery technology and supporting charging infrastructure for heavy goods vehicles, the adoption of regenerative and more
sustainable agricultural practices and robust, consistently applied emissions calculations and consumer communication on embedded carbon
inproducts.
For this reason over the next 12 months our priorities will be to continue to progress our own programmes and to develop our data which will
support the delivery and accuracy of our net zero transition plans while also collaborating on factors that are outside of our direct control but
remain vital to deliver our emissions reduction targets.
Pets at Home Group Plc Annual Report and Accounts 2024
66
Directors’ Remuneration Report
Introduction
On behalf of the Remuneration Committee (Committee), I am pleased
to present our Directors’ Remuneration Report (DRR) for the financial
year ending 28 March 2024 (FY24).
FY24: Looking back
Overview
Our performance over the past year has been resilient in what
remains a challenging macro-environment. Our business, and the
wider industry, remains in growth, demonstrating the strength of the
pet care sector and the advantages of our unique model. We have
continued to support our customers, colleagues, and communities
throughout the cost of living challenges, whilst continuing to execute
on our strategy and deliver returns for our investors.
Business performance
FY24 was a year marked by a turbulent economic backdrop, which
impacted energy, foreign exchange, and freight costs, as well as
impacting consumer behaviour. Despite this, we will exit FY24 with
underlying PBT of £132.0m (vs. £136.4m in FY23), having grown
consumer revenue in line with our medium-term ambition, and with
net cash on our balance sheet. Statutory PBT declined 13.7% to
£105.7m due to £26.3m of non-underlying costs primarily relating
to the transition to our new Distribution Centre (DC). We have also
made notable steps forward in the delivery of our strategic initiatives,
including the launch of our new digital platform to consumers, the
transition to our new DC, and continued investment to expand and
enhance our physical Pet Care Centre (PCC) and practice network.
Highlights include:
– The UK pet care market remains resilient, and our scale and reach
gives us a leading position in a structurally growing market, with
our total market share now 23%.
– We continued to welcome new customers to the platform, growing
our Pets Club to 7.8m active members (+2%).
– Total Group statutory revenue growth of 5.2% to £1.5bn, with
Group like-for-like (LFL) revenue up 5.1%.
– Vet Group revenue increased by 16.8%, with LFL
up 16.5%.
– Retail revenue growth of 4.0%, and LFL
growth of 4.1%.
– Group free cash flow of £69.0m reflecting YoY underlying profit
performance and investment into our key strategic growth areas.
– Our new DC is now fulfilling 100% of our PCC network and we
will look to transition our online operations in the coming year,
improving fulfilment costs, consumer experience and efficiency.
– Launched our new digital platform to consumers offering a much-
improved user experience and functionality, a key foundation for
future growth.
Shareholder experience
– Our share price declined c.26% in the year from £3.61 to £2.68,
underperforming the retail sector (+9%) and wider market (+4%).
– FY24 was very much a tale of two halves, with our shares
outperforming through the first half of the year, peaking at £3.97,
then underperforming in the second half as the CMA review (Sep
‘23), transition to the DC (Nov ‘23), and profit downgrade (Jan ‘24)
impacted sentiment.
– It was generally a tough year for markets, and consumer facing
stocks, as ongoing inflation created uncertainty over demand
and costs.
– In the year, we increased our FY23 final dividend by 10.7% to 8.3p
(paid July ‘23) and maintained our FY24 interim dividend at 4.5p
(paid Jan ’24). Shareholders were further rewarded via a £50m
share buyback programme, in addition to the first £50m buyback
completed in FY23.
Roger Burnley
Chair of the Remuneration Committee
Who is on the Remuneration Committee?
Member Period from To
Meetings
attended
Roger Burnley (Chair) 31 March 2023 28 March 2024 4/4
Prof Susan Dawson 31 March 2023 28 March 2024 4/4
Zarin Patel 31 March 2023 28 March 2024 4/4
Sharon Flood 31 March 2023 26 May 2023 1/1
Sharon Flood chaired the ommittee meeting in May 2023 prior
to her departure from the Board of Directors on 26 May 2023.
Susan Dawson chaired the subsequent ommittee meetings in
September 2023 and January 2024, before Roger Burnley was
appointed as hair with effect from 1 March 2024.
Resilience in
a challenging
market
Financial Statements
67
Strategic Report Governance Financial StatementsStrategic Report
67
Governance
Supporting our customers
– The new Pets at Home mobile application (the App) brings
together loyalty benefits and shopping in one easy to use
experience under the new branding of the Pets Club. The
App content is tailored to consumers and their pets through
personalised product offers, services and advice that are
available online, in our PCCs and Vet Practices.
– During FY24, we have continued our commitment to delivering
good value to customers by introducing the Petsaver events
which offer unique deals on hundreds of petcare essentials
keeping owners and their pets happy and healthy.
– We have responded quickly to emerging trends in the pet
nutrition space to make sure we are able to cater for all customer
needs and pet feeding preferences. With the introduction of
several new brands and significant capital investment in the raw
and fresh categories, we have been able to make pet nutrition
more accessible to all customers offering more choice to suit
all budgets.
Supporting our colleagues
– We continue to invest in our total reward proposition to attract
and retain talent in highly competitive retail and veterinary
service markets.
Investment in base pay:
– The average increase in base pay for colleagues, including
promotions, was 8.8% across the UK workforce in FY24.
– In April 2023, we increased our hourly store and grooming pay
rates to a starting rate of £10.60 (+10.4% vs April 2022).
– Colleagues were able to earn 30p more than the Real Living Wage
(RLW) on completion of the first step of their training which is
achievable after three months.
– Within the Support Office, following the annual pay review in
October 2023, base pay increased by an average of 3.9%.
Colleague bonus:
– PCC colleagues will be awarded their usual bonus in respect
of FY24. In line with the Executive Directors, Support Office
colleagues will not receive a bonus in respect of FY24.
Pension schemes:
– We continued our commitment in FY24 to reducing the pension
contribution gap between Retail and Support Office functions.
By increasing the Company contribution for members of tier two
pension schemes from 4% to 4.5%, over 6,000 hourly paid retail
colleagues were positively impacted.
Colleague share ownership:
– We continued our investment in colleague share ownership
awarding over 10,000 colleagues an award of free shares in FY24
and we continued to offer our Sharesave (SAYE) scheme at a 20%
discounted option price.
– 8,781 colleagues received access to awards which vested
under our 2020 free share scheme and our 2020 SAYE
scheme collectively.
Financial support:
– We awarded over £94.5k in tax-free grants through our Colleague
Hardship Fund to support those colleagues experiencing a period
of unexpected financial difficulty.
Wellbeing:
– We continue to prioritise and promote colleague wellbeing across
three core areas, Mental, Financial and Physical wellbeing
– Continued our strong partnerships with both the Retail Trust and
Vet Life charities.
– We conducted a virtual ‘Spring into Spring’ challenge as part of
our wellbeing strategy to promote physical activity and encourage
a sense of community for our colleagues. 230 teams participated
in the 4-week steps challenge, walking or running a total of 597
million steps and 250,000 miles on a virtual route from our most
northern PCC in Wick to our most southern PCC in Penzance.
Pets at Home Group Plc Annual Report and Accounts 2024
68
Colleague recognition and engagement:
– Peer-to-Peer recognition is actively encouraged for colleagues
who live the Pets at Home values through their work.
– During FY24, over £47k has been given to colleagues through
our nomination initiatives ‘Colleague of the Month’ and ‘Team
of the Quarter’ as well as over 2.3k e-cards.
– Our Colleague Appreciation Day raffle event in March 2024 saw
over 160 colleagues win prizes including experience days and
vouchers linked to wellbeing.
– E-gift vouchers totalling £79k were given to colleagues in
recognition of their work to spend on Your Reward Hub (YRH).
– The YRH hosts a wealth of information about the different benefits
which are offered as part of colleagues’ total reward package.
– In FY24, colleagues have saved over £179k on their everyday
online and in-store shopping through vouchers and savings in
the YRH.
– We also continued our colleague Pets at Home discount of 30%
for our own branded and 20% on other brand products in store
and online.
Supporting our communities
– Over 2,400 colleagues completed a Better World Pledge Day
in FY24, donating over 16,000 hours to support Pets, People
or the Planet.
– Over £1.9m was raised through our Santa Paws Appeal, the
biggest annual fundraising appeal in aid of the Pets at Home
Foundation (‘the Foundation’).
– Continued to support keeping pets and people together through
donations to over 400 foodbanks in local communities in
collaboration with Blue Cross.
– £2.34m awarded through the Foundation to pet rescue and
rehoming centres and £1.45m awarded to organisations that
improve the lives of people through pets.
Executive Directors’ remuneration in respect of FY24
FY24 was the second year of our current Remuneration Policy
approved by shareholders in 2023. In light of the context set out
above, the Committee made the following decisions in respect
of Executive Pay:
Base salary:
The CEO received an increase of 5% approved by the Committee,
following a market review which concluded that the CEO’s salary
had fallen behind the general market level for equivalent roles of a
similar sized FTSE 250 and UK-listed retailer. The CFO received a
standard increase of 3.5% in line with the increase awarded to senior
management colleagues which was less than the wider workforce
increase of an average of 8.8% throughout FY24. Salary increases in
respect of FY24 were effective from 10 November 2023.
In FY24, we committed to a market review for Non-Executive Director
fees which concluded that our pay offering was behind the external
benchmark. In light of the market review findings, it was agreed by
the Committee that Non-Executive Directors’ fees would increase by
3.6%, the Committee Chair fee would increase by 4.1% and Chair of
the Board fee would increase by 3.5%. It was also agreed to decrease
the Senior Independent Director fee to £10,000 to align with the
externalmarket.
Pension:
There were no changes to the pension contribution rates in FY24.
Executive Directors already receive a pension contribution capped at
the Company contribution rate provided to the majority of colleagues
in the Support Office functions. Currently this is up to 6.5% of base
salary and consistent with rates at other retailers.
Annual bonus:
The Executive Directors were assessed against Group underlying
Profit Before Tax (PBT) (65.0%), Group Normalised Pre Tax Free Cash
Flow (FCF) (25.0%) and Sustainability (10.0%) comprising of 12 defined
measures plus the completion of a Better World Pledge Day. Formulaic
targets were set in May 2023 against a budget that was agreed to be
ambitious and stretching.
In light of business and stakeholder context set out above, the
Committee carefully considered and determined that the formulaic
outcomes set out immediately below were fair and appropriate. In
light of having fallen short of our PBT and FCF targets, the Committee
made the decision to exercise downward discretion in relation to
the sustainability result. As a result of this, there will be no Executive
Director bonus paid in respect of FY24:
– The underlying PBT target range was set between £131.4m and
£141.4m. Whilst actual underlying PBT was £132.0m the Committee
determined that the formulaic outcome required for minimum
Trigger 1 bonus had not been met and therefore no bonus
is payable.
– The Group FCF target range was set between £112.6m and
£120.6m and the actual Group FCF was £107.5m resulting in the
minimum target not being met.
– Across the 12 sustainability targets, nine of these were achieved.
Whilst the formulaic outcome for bonus has been triggered (75%
of maximum), the Committee exercised its discretion that the
Sustainability part of the bonus will not be paid.
Restricted stock plans (RSP):
As the CEO was appointed in June 2022, they did not receive a
2021 RSP award. In accordance with policy at the time, vesting of
the 2021 RSP award for Executive Directors was subject to a TSR
financial underpin. This was replaced for RSP awards made in 2023
onwards with a discretionary underpin which allows the Committee to
determine the vesting outcome based on the holistic performance of
the business and the Executive Directors.
As the TSR financial underpin for the 2021 RSP award has not been
met, the 2021 RSP award made to the CFO would ordinarily lapse. In
considering this formulaic outcome, the Committee noted that prior
to 7 September 2023, when the CMA first announced it was opening
a review of veterinary services, the TSR financial underpin would
have been met and that the award, equivalent to 75% of salary at the
time of grant, was granted when the share price was approaching
recordhighs.
The Committee also considered the performance of the business and
CFO over the last three years, including the CFO’s critical leadership
during the period of CEO transition. Of employees who received a
2021 RSP award, the CFO would also be the only recipient whose
award lapses. The Committee concluded that the formulaic outcome
was not a fair reflection of the CFO’s contribution and performance
over the vesting period and consequently decided to exercise its
discretion to vest the 2021 RSP award granted to the CFO, the shares
of which will remain subject to a two year post vesting holding period.
Directors’ Remuneration Report continued
Financial Statements
69
Strategic Report Governance
Directors’ remuneration in respect of FY25
Base salary:
The usual annual pay review is expected to take place for the
Executive Directors in October 2024 with a particular focus on the
CFO to ensure his performance and contribution to the business is
fairly recognised. The Committee will continue to benchmark against
relative market comparisons to ensure that the total reward package
is considered competitive and does not pose a risk to retention
and succession planning whilst considering the merit of increases
in the context of the broader colleague population and business
performance.
Pension:
No changes to the pension scheme for Executive Directors are
planned for FY25.
Annual bonus:
The maximum bonus opportunity will continue to be 170% of salary for
the CEO and 150% of salary for the CFO with one-third of any bonus
paid being deferred in shares for two years in line with the Bonus
Deferral Policy. The Executive Directors’ annual bonus will be based on
Group PBT (65%), Group FCF (25%) and sustainability measures (10%),
underpinned by a mandatory training and completion of a BWPD.
The sustainability measures combined with the BWPD will together
support the various pillars of our Sustainability strategy which focus
on ‘Pets, People and our Planet’.
Restricted stock plans (RSP):
Share awards granted during FY25 will continue to be set in line with
the Policy with a maximum grant value of 100% of base salary for the
CEO and 75% of base salary for the CFO. These will continue to vest
subject to a holistic underpin which will take into account factors
including overall financial performance, the shareholder experience,
performance against strategy and other factors. With a three-year
vesting schedule and two-year post vesting holding period as set
out in the Policy.
At the date the DRR was finalised, the Committee had yet to approve
the FY25 award although it intends to do so before the AGM. When
approving the grant value of the FY25 award the Committee will
consider the shareholder experience during the preceding twelve
months and publish a statement to the company website confirming
details of the award approved.
Closing remarks
We hope that you find this report helpful and we would welcome any
feedback or comments on this report. We look forward to your support
of the resolution for approval by advisory vote for Our Directors’
Remuneration Report at our AGM on 11 July 2024.
Roger Burnley
Chair of the Remuneration Committee
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
70
Our Directors’ Remuneration Policy
The Remuneration Policy (‘the Policy’) can be found on our website in the 2023 Annual Report. The Policy was approved by shareholders at the
2023 AGM and came into effect from 6 July 2023. The Policy table for the Executive Directors remuneration has been reproduced below:
Remuneration principles
The objectives of our Directors’ Remuneration Policy are:
Strategy To have incentives that are appropriate for our business for the next three years as we continue to focus on delivering long-term,
sustainable returns to investors. To reward in ways that support delivery of our integrated pet care strategy.
Culture To adopt a ‘bottom-up’ approach to remuneration – a policy that works for our colleagues and can be applied to our Executives.
To support our ongoing desire to embed share ownership across the organisation. To assist with succession planning.
Retention To simplify and therefore enhance perceived value of awards and thereby reduce flight risk.
Shareholders To deliver better value to shareholders by:
– Improving perceived value;
– Creating stronger alignment with shareholders; and
– Increasing focus on long-term sustainable value creation.
How we ensure pay for performance linkage:
Annual bonus – Pay-out linked to achievement of robust and challenging annual performance targets and any bonus achieved is paid two-
thirds cash and one-third shares with a two-year deferral period to ensure a link with longer term performance and shareholder
experience.
– Full disclosure of bonus – commitment to disclosing all target ranges on a retrospective basis at the end of the financial year
in question.
Underpin – The satisfaction of an underpin that applies to RSP awards and as shall be determined by the Committee whereby the
Committee can adjust vesting for business, individual and wider Company performance.
– Serves as a security mechanism to prevent pay-outs for poor performance.
Share price – Share price inherently links pay to performance.
– Build-up of shareholding, long-term vesting and holding horizon and post-cessation shareholding guidelines incentivise
Executive Directors to increase focus on long-term, sustainable performance and value creation.
Financial Statements
71
Strategic Report Governance
Base salary
Purpose and link to
strategy Operation Maximum opportunity Changes
The Company provides
competitive salaries
suitable to attract and
retain individuals of the
right calibre to develop
and execute the
business strategy.
– Base salaries are paid in cash and are pensionable.
– Base salaries will be reviewed annually by the Remuneration
Committee. Any changes will usually take effect from
1 October in line with the wider management and salaried
colleague group. The Committee takes into consideration a
number of factors when setting salaries, including (but not
limited to):
– Size and scope of the individual’s responsibilities;
– The individual’s skills, experience and performance;
– Typical salary levels for comparable roles within
appropriate pay comparators, including practice for retail
companies and the broader FTSE 250; and
– Pay and conditions elsewhere in the Group.
– Whilst there is no maximum
salary level, any increases
will normally be broadly in
line with the wider colleague
population.
– Higher increases may be made
under certain circumstances,
at the Committee’s discretion.
For example, this may
include: increase in the
scope and/or responsibility
of the individual’s role; and
development of the individual
within the role.
No changes.
Benefits
Purpose and link to
strategy Operation Maximum opportunity Changes
The Company provides
colleagues with market
competitive benefits
suitable to attract and
retain individuals of the
right calibre to develop
and execute the
business strategy.
– The Company provides a range of benefits, which may
include:
– a company car (or cash equivalent)
– life assurance
– permanent health insurance
– private medical insurance
– These benefits are not pensionable.
– Other benefits may be offered from time to time, if
considered appropriate by the Committee and consistent
with the Company’s overriding purpose for offering such
benefits.
– The Company may also meet any reasonable home working
and/or certain mobility costs, such as relocation support,
expatriate allowances, temporary living and transportation
expenses in line with the prevailing home working and/or
mobility policies and practice for other senior executives.
– Executive Directors are eligible to participate in any tax
approved all-colleague share plans operated by the
Company on the same basis as other eligible colleagues
such as the SAYE scheme.
– The cost to the Company
of providing other benefits
may vary depending on, for
example, market practice and
the cost of insuring certain
benefits.
– The Committee keeps the
level of benefit provision
under regular review.
No changes.
Pension
Purpose and link to
strategy Operation Maximum opportunity Changes
To provide colleagues
with an allowance for
retirement planning.
– Pension contributions are made to either the Group Pension
Plan, or to personal pension schemes, or cash allowances in
lieu of contributions are paid.
– The employer contribution
level for all current and
any future external hire or
internally promoted Executive
Director is provided to
the majority of colleagues
in central support office
functions from time to time
(currently 6.5%).
No changes.
Pay element (fixed pay)
Pets at Home Group Plc Annual Report and Accounts 2024
72
Annual bonus
Purpose and link
to strategy Operation Maximum opportunity Performance measures Changes
To incentivise
the delivery of
our business plan
on an annual
basis. To reward
performance
against key
performance
indicators which
are critical to the
delivery of our
business strategy.
– Delivery will normally be in cash and is
not pensionable.
– Performance measures are set annually
and pay-out levels are determined by
the Committee after the year-end, based
on performance against those targets
during the relevant financial year.
– The Committee may amend the
performance targets and measures
during the relevant financial year
if events occur which result in the
original targets and measures no longer
being a fair measure of performance.
– The Committee may amend formulaic
bonus outcomes if they do not reflect
the wider shareholder experience over
the period or the performance of the
Executive Director in delivery of the
business strategy and results.
– Malus and clawback provisions apply
to these awards in circumstances as
set out on page 73 of the Policy.
– Change of control provisions apply as
set out in the Remuneration Policy.
– Leaver provisions apply as set out in
the Remuneration Policy.
– The maximum bonus
opportunity shall be
170% of base salary
for the CEO and
150% of base salary
for the CFO provided
one-third of any
bonus achieved will
be paid in shares (or
share awards) and
subject to a two-year
holding period under
the Deferred Bonus
Share Plan (DBSP).
– Each year, the Committee determines the
measures and weightings within the following
parameters:
– At least 75% of the annual bonus will be
based on financial performance measures; and
– No more than 25% of the annual bonus will be
based on performance against non-financial
measures, including for example, individual
and strategic objectives, which may include
ESG metrics.
– The Committee ensures that targets are
appropriately stretching in the context of the
business plan and that there is an appropriate
balance between incentivising Executive Directors
to meet financial targets for the year and to deliver
specific non-financial goals. This balance allows
the Committee to effectively reward performance
against the key elements of our strategy.
– The performance metrics for the annual
bonus for the Executive Directors are set out
retrospectively within the Annual Report.
– The Committee has discretion to amend
formulaic bonus outcomes if they do not
reflect the wider shareholder experience over
the period or the performance of the Executive
Director in delivery of the business strategy
and results. Where discretion is applied this
will be summarised within the Annual Report.
No
changes.
Long-term incentive plan
1
Purpose and link
to strategy Operation Maximum opportunity Performance measures Changes
– To promote
continued
alignment
between
Executive
Directors and
shareholders,
increasing
focus on
long-term
sustainable
value creation.
– To support
our principle
of embedding
share
ownership
across the
organisation.
– To assist with
succession
planning.
– Awards will be made under the
RSP annually.
– Share awards are normally made in
the form of nil cost options but may be
awarded in other forms if appropriate
(such as conditional share awards). The
plan rules specify that awards may also
be satisfied in cash although this is
unlikely to apply to Executive Directors
(other than partially, to facilitate the
net settlement of an award).
– No award will vest under the RSP
unless the Committee is satisfied
that performance in respect of the
holistic underpin has been satisfactory.
Where the Committee concludes that
performance has not been satisfactory
it has discretion to reduce the number
of shares subject to an RSP vesting
downwards including to zero. 100%
of the award will vest on the third
anniversary of grant, subject to the
achievement of the aforementioned
assessment of the underpin and
continued employment.
– Following vesting, the award will vest
after three years followed by a two-year
holding period until the fifth anniversary
of grant. If the vested award is exercised
during this two-year period, the net
number of shares acquired (after taxes
have been settled) must continue to be
held (and cannot be sold) until the fifth
anniversary of grant.
– The maximum value
of restricted shares
that may be awarded
in respect of any
financial year for new
hires effective 27
March 2020 may be
up to 100% of salary.
Existing Executives
may only be awarded
a maximum of 75%
of salary for the CFO
and 100% of salary
for the CEO.
– There are no performance targets attached to
the awards.
– A holistic underpin applies which allows
the Committee to take into account factors
including overall financial performance,
the shareholder experience, performance
against strategic imperatives and any serious
reputational damage.
No
changes.
Pay element (variable pay)
Our Directors’ Remuneration Policy continued
Financial Statements
73
Strategic Report Governance
Long-term incentive plan
1
continued
Purpose and link
to strategy Operation Maximum opportunity Performance measures Changes
– Additional shares (or cash) may be
awarded in lieu of dividends on any
shares which vest, which would have
been paid during the vesting period
and, in the case of a vested but
unexercised award, the holding period.
– Malus and clawback provisions apply
to these awards in circumstances as
set out in the Remuneration Policy.
– Change of control provisions apply as
set out in the Remuneration Policy.
– Leaver provisions apply as set out in
the Remuneration Policy.
Save as you earn (SAYE)
1
Purpose and link to
strategy Operation Maximum opportunity Performance measures Changes
– An all-
colleague
plan, which
encourages
long-term
shareholding
and aligns the
interests of
UK colleagues
with
shareholders.
– Executive
Directors are
eligible to
participate.
– SAYE is an HMRC-approved scheme
where eligible colleagues are granted
savings-related share options to
subscribe for shares in the Company.
– Options are granted to be exercisable
in conjunction with either a three-year
or five-year savings contract with a
monthly savings limit set according
to HMRC limits (currently £500 per
month out of taxed income).
– Options are normally granted at a
discount to market price at the time
of invitation, as per HMRC regulations
(currently a maximum of 20%).
– The market value
of the shares under
option at the date of
maturity of the SAYE
savings contract,
less the grant price
of the option at the
contract start date.
– There are no performance measures
attachedto awards under the SAYE.
No
changes.
Chair and Non-Executive Directors’ Remuneration Policy
Purpose and link
to strategy Operation Maximum opportunity Performance measures Changes
To attract and
retain high calibre
individuals by
offering market
competitive fee
arrangements.
– Non-Executive Directors receive a basic
fee in respect of their Board duties.
– Further fees are paid to Non-Executive
Directors in respect of Deputy Chair
of the Board and/or chairship of Board
Committees.
– The Non-Executive Chair receives an
all-inclusive fee for the role.
– The remuneration of the Non-
Executive Chair is set by the
Remuneration Committee, whilst the
Board as a whole is responsible for
determining Non-Executive Director
fees. These fees are the sole element of
Non-Executive remuneration and they
are not eligible for incentive awards,
pensions or other benefits.
– Fees are typically reviewed annually.
– Expenses incurred in the performance
of Non-Executive duties for the
Company may be reimbursed or paid for
directly by the Company, as appropriate,
including any tax due on the benefits.
– Current fee levels
can be found on
page 76.
– Fees are set at
a level which
is considered
appropriate to
attract and retain
the calibre of
individual required
by the Company.
– The Company’s
Articles of
Association
provide that the
total aggregate
remuneration paid to
the Non-Executive
Chair and the
NEDs will be within
the limits set by
shareholders.
n/a No
changes.
Pay element (variable pay) continued
1
The Committee may in the event of any variation of the Company’s share capital, demerger, delisting, or other event which may affect the value of awards, adjust or amend the
terms of awards in accordance with the rules of the relevant share plan. In the case of the SAYE, any changes may be subject to HMRC approval if required.
Pets at Home Group Plc Annual Report and Accounts 2024
74
Annual report on remuneration
a) Directors’ remuneration – report on implementation for the year ended 28 March 2024
This section of the report sets out how the Policy, approved by shareholders at the Company’s Annual General Meeting (AGM) on the 6 July
2023 (2023 Policy), has been applied in the financial year being reported on.
The information presented from this section up until the relevant note on page 77 represents the audited section of this report.
b) Single total figure of remuneration for executive directors for the year ended 28 March 2024
The following table sets out the total remuneration for Executive Directors for the year ended 28 March 2024. All payments are in line with
thePolicy.
Director
Base salary
(£)
Benefits
(£)
Pension
(£)
Total
fixed pay
(£)
Annual
bonus
(£)
Long-term
incentives
(£)
Total
variable pay
(£)
Total
2
(£)
FY24
Lyssa McGowan 611,844 644 39,610 652,098 – – – 652,098
Mike Iddon 430,062 12,144 27,954 470,161 – 179,115
4
179,115 649,276
FY23
3
Lyssa McGowan 493,246 1,773 32,061 527,080 710,286 – 710,286 1,237,366
Peter Pritchard
1
90,962 1,987 8,187 101,135 – – – 101,135
Mike Iddon 416,623 12,055 27,080 455,758 474,301 405,309
3
879,610 1,335,369
1
Peter Pritchard resigned from the company with effect from 31 May 2022
2
FY24 base salary, benefits and pension contributions have been calculated using actual amounts received during the financial year.
3
The 2020 RSP vested in full on 29 May 2023 since the absolute TSR had been achieved. At the time of publication of the annual report the value of the RSP was calculated using
£3.610 the share price at 30 March 2023.
4
The 2021 RSP, will vest in June 2024 for our Executive Directors following the Committee decision to exercise discretion despite the absolute underpin not being achieved. The
figure in the table above is based on the share option granted multiplied by average share price for the last quarter of the FY24. financial year.
Base salary:
The gross taxable amount received during the relevant financial year excluding payments in lieu of pension (see below).
Benefits:
The gross taxable value of benefits received during the relevant financial year and principally includes company car (orcashequivalent) and
Private Healthcare Insurance (PHI) where applicable.
Pension:
The amount of pension contributed by the Company including the gross cash value of any payment in lieu of pension received during FY24.
Executive Directors received a Company pension contribution worth a maximum of 6.5% of their base salary. A taxable cash payment in lieu of
pension contribution was paid if the Executive Director reaches the annual pension allowance.
Annual bonus:
The amount earned in respect of the relevant financial year.
Long-term incentives:
The amount earned by the Executive Directors in respect of the relevant financial year. Details of how this was calculated are set out in the
footnotes above.
Annual bonus
In FY24, an annual bonus was available to Executive Directors subject to meeting defined criteria including Group PBT (65%), Group normalised
pre tax FCF (25%), defined sustainability measures (10%) and a mandatory ESG bonus underpin which required each Executive Director to
complete a Better World Pledge Day (BWPD). All of our Support Office colleagues, and Store Managers are also required to complete a BWPD as
part of their objectives for achieving a bonus. The BWPDs provide significant value and non-financial support to a range of different charities, in
addition to the financial support we already provide. Colleagues have supported a range of people, pet and planet focused charities.
The maximum bonus opportunity in respect of FY24 for the CEO was 170% of base salary and 150% of base salary for the CFO.
The Executive Directors were assessed against stretching PBT, FCF and Sustainability targets. Whilst actual underlying PBT for the 52 week
period ended 28 March 2024 was £132.0m, the Committee determined that the formulaic outcome required for minimum Trigger 1 bonus had
not been met. Group Normalised Pre Tax FCF was £107.5m, which fell below the minimum target. The Company achieved nine out of a possible
twelve sustainability targets, However, the Committee exercised its discretion that the Sustainability part of the bonus will not be paid.
Our Directors’ Remuneration Policy continued
Financial Statements
75
Strategic Report Governance
The table below shows the targets set and the achieved pay out levels for Executive Directors:
Performance measures
Target Achieved
% Weighting Minimum Maximum Total %
Underlying PBT (£m) 65 131.4 141.4 132.0 0.0
Free Cash Flow (£m) 25 112.6 120.6 107.5 0.0
Sustainability Objectives 10 1 12 9 0.0
Total 100 0.0
In order to achieve full pay-out, the Committee had set ambitious and stretching targets that required the individuals to deliver performance
which significantly exceeded business expectations.
The Committee carefully considered whether the bonus target for PBT had been reached at the minimum threshold. After significant assessment
and in the light of the business and stakeholder context set out above in the Chair’s letter on pages 66 to 69, the Committee was comfortable
that the formulaic outturn for PBT and Group Normalised Pre Tax FCF was appropriate. No adjustments were therefore made to the formulaic
bonus targets, however, downward discretion was exercised in relation to the sustainability target measure. Consequently, the bonus outturn in
relation to the FY24 period, will be nil for both Executive Directors and Support Office colleagues.
Long-term incentives plans (LTIP)
2019 RSP award:
Awards granted under the RSP for 2019 vested in May 2022, including awards for the Executive Directors under the RSP which were subject to
the agreed performance metrics of an absolute TSR underpin. The absolute TSR underpin was met, therefore awards vested according to the
relevant timetable. For Executive Directors, this meant 50% immediately, 25% in 2023 and the final remaining 25% in 2024.
2020 RSP award:
Awards granted to the Executive Directors under the RSP in 2020 vested in full in May 2023 as a result of the absolute TSR underpin having
been met. The Committee was comfortable that having assessed these awards for any windfall gains on both grant and vest of the 2020 RSP
awards, that no discount applied and therefore the awards vested in full, with a 2 year post vest holding requirement.
2021 RSP award:
As the CEO was appointed in June 2022, they did not receive a 2021 RSP award. In accordance with policy at the time, vesting of the 2021
RSP award for Executive Directors was subject to a TSR financial underpin which was replaced for RSP awards made in 2023 onwards with a
discretionary underpin that allows the Committee to determine the vesting outcome taking account of the performance of the business and
the Executive Director. As the TSR financial underpin for the 2021 RSP award has not been met, the 2021 RSP award made to the CFO would
ordinarily lapse.
In considering this formulaic outcome, the Committee noted that prior to 7 September 2023, when the CMA first announced it was opening a
review of veterinary services, the TSR financial underpin would have been met and that the award, equivalent to 75% of salary at the time of
grant, was granted when the share price was approaching record highs. The Committee also considered the performance of the business and
CFO over the last three years, including the CFO’s critical leadership during the period of CEO transition. Of employees who received a 2021
RSP award, the CFO would also be the only recipient whose award lapses. The Committee concluded that the formulaic outcome was not a fair
reflection of the CFO’s contribution and performance over the vesting period and consequently decided to exercise its discretion to vest the
2021 RSP award granted to the CFO, the shares of which will remain subject to a two year post vesting holding period.
Pets at Home Group Plc Annual Report and Accounts 2024
76
c) Total Single Figure Remuneration (TSFR) for Non-Executive Directors for the year ended 28 March 2024
The following table sets out the TSFR for Non-Executive Directors and the Chair of the Board for the year ended 28 March 2024 (FY24).
Director Basic Fees (£)
Additional
Fees (£)
Remuneration
Committee
Chair (£)
Audit & Risk
Committee
Chair (£)
ESG
Committee
Chair (£)
Colleague
Engagement
(£)
Total Single
Figure FY24
(£)
Total Single
Figure FY23
(£)
Dennis Millard
1
67,380 n/a n/a n/a n/a n/a 62,018 71,523
Prof Susan Dawson
2
54,031 n/a 9,975 n/a 10,829 n/a 74,835 61,827
Ian Burke 216,085 n/a n/a n/a n/a n/a 216,085 206,092
Zarin Patel
3
54,031 10,000 n/a 10,829 n/a n/a 74,860 61,827
Roger Burnley
2
54,031 n/a 854 n/a n/a n/a 54,885 6,765
Dr Natalie-Jane McDonald
4
45,626 n/a n/a n/a n/a 4,269 49,895 n/a
Angelique Augereau
4
10,403 n/a n/a n/a n/a n/a 10,403 n/a
Sharon Flood
5
8,405 n/a n/a n/a 1681 n/a 10,086 61,827
Stanislas Laurent
5
8,405 n/a n/a n/a n/a n/a 8,405 51,523
Note: Fees in the above table have been pro-rated for appointments which have covered a proportion of the financial year.
1
Dennis Millard stepped down from his position as a Non-Executive Director in February 2024.
2
Roger Burnley replaced Professor Susan Dawson as Remuneration Committee Chair in March 2024.
3
The additional fee paid to Zarin Patel is in respect of her position as Senior Independent Director.
4
Dr Natalie-Jane McDonald and Angelique Augereau joined as Non-Executive Directors in May 2023 and January 2024 respectively.
5
Stanislas Laurent and Sharon Flood stepped down from the board in May 2023.
d) Scheme interests awarded during the financial year
In FY24 Executive Directors received RSP awards in line with the Policy as follows:
Executive Director Date of award
Number of
shares awarded
under the RSP
Grant price
of RSP awards
% of salary for
total awards
Performance
period end date
Lyssa McGowan 30 May 2023 167,775 Nil cost awards 100% 19 March 2026
Mike Iddon 30 May 2023 88,949 Nil cost awards 75% 19 March 2026
All awards are made as performance shares based on a percentage of salary and the value is divided by the closing share price on 26 May 2023,
being £3.578.
The awards were made subject to the satisfaction of the achievement of a judgement-based underpin which will allow the Committee to
take share price performance into account in addition to business, individual and wider company performance during the vesting period. In
accordance with the Policy, 100% of the award will vest on the third anniversary of grant, subject to the achievement of the underpin and
continued employment at that date, followed by a two-year post vest holding period until the fifth anniversary of grant. If the vested award is
exercised during this two-year period, the net number of shares acquired (after taxes and transaction fees have been settled) must continue to
be held (and cannot be sold) until the fifth anniversary of grant.
e) Payments for loss of office
No payments for loss of office were made during the financial year.
f) Payments to past Directors
No payments were made to past directors during the year.
Our Directors’ Remuneration Policy continued
Financial Statements
77
Strategic Report Governance
g) Statement of Directors’ shareholding and share interests
The Committee believes that colleague share ownership is an important means to support long-term commitment to the Company and the
alignment of colleague interests with those of shareholders.
Executive Directors are subject to a shareholding requirement of 200% of base salary, which should be built up over a period of five years. Under
the Policy applicable from FY24, Executive Directors have been subject to a post cessation shareholding requirement of 200% of salary for one
year and 100% of salary for two years.
The Committee reviews share ownership levels annually.
Current shareholding levels for Directors are set out in the table below:
Director
Shareholding
as a % of salary
1
Number of shares
Shares owned
outright at
30 March 2023
Shares owned
outright at
28 March 2024
Interests in share incentive
schemes, awarded without
performance conditions at
28 March 2024
Interests in share incentive
schemes, awarded subject to
performance conditions at
28 March 2024
Lyssa McGowan 14% 32,325 70,054 335,890 32,325
Mike Iddon 263% 429,695 105,123 276,241 327,155
Roger Burnley – – – – -
Prof Susan Dawson – 4,195 – – 4,195
Ian Burke – 47,900 – – 47,900
Zarin Patel – 30,000 – – 30,000
Dr Natalie-Jane McDonald – – – – –
Angelique Augereau – – – – –
1
Shareholding as a % of salary has been calculated using the closing share price at year end (28 March 2024) of £2.680.
This represents the end of the audited section of the report.
Pets at Home Group Plc Annual Report and Accounts 2024
78
h) TSR performance chart
The Company’s shares were admitted to the premium listing segment of the Official List maintained by the UK Financial Conduct Authority and
to trading on the London Stock Exchange plc’s main market for listed securities on 17 March 2014. The chart below shows performance for the
past ten years date until the end of FY24.
27 Mar 15 27 Mar 16 27 Mar 17 27 Mar 18 27 Mar 19 27 Mar 20 27 Mar 21 27 Mar 22 27 Mar 23 27 Mar 24
220
180
160
200
140
100
120
60
80
40
Share price performance (rebased to 100)
FTSE 250
FTSE 350 General Retailers
Pets at Home
CEO FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
1
CEO total
single figure
remuneration
(£)
LM – – – – – – – – 1,237,366 652,098
PP
2
– – – – 930,298 1,599,710
3
2,140,916 1,831,435 101,135 –
IK
4
– – 662,087 575,953 122,037 – – – – –
NW
5
790,461 962,224
6
129,696 – – – – – – –
Annual bonus
pay-out (as %
of maximum
opportunity)
LM – – – – – – – – 71.7 –
PP – – – – 75.8 100.0 100.0 90.4 – –
IK – – 20.4 –
8
– – – – – –
NW 75.0 60.0 – – – – – – – –
Long-term
incentive
vesting (as %
of maximum
opportunity)
LM – – – – – – – – – –
PP – – – – 16.8 100.0 100.0 100.0 – –
IK – – 16.8
9
– – – – – – –
NW – 96.0
6
– – – – – – – –
LM – Lyssa McGowan PP – Peter Pritchard IK – Ian Kellett NW – Nick Wood
1
In FY24, the single figure of remuneration relates to the period 31 March 2023 to 28 March 2024.
2
Peter Pritchard was appointed on 27 April 2018 therefore his single figure remuneration as CEO for 2018/19 reflects this partial year of service in role. His FY20 single figure
includes the full value of his total 2017 RSP award which vested on a phased basis in line with the Policy, 50% in July 2020, and 25% of the award will vest in each of years four
and five. The true value will vary due to the phased release over the three years and was subject to the share price at the time. Peter’s FY21 single figure includes the full value
ofhis total 2018 RSP award which vested on a phased basis, 50% May 2021, 15% May 2022 and 25% May 2023.
3
The FY20 single figure has been adjusted since the FY20 Annual Report was issued to include the 2017 RSP award which vested based on the performance period of FY20 as
opposed to the grant awarded in FY20 as previously disclosed.
4
Ian Kellett was appointed on 4 April 2016 and stepped down from his role on 27 April 2018 before leaving the Group effective 31 May 2018.
5
Nick Wood resigned as an Executive Director on 4 April 2016, however, he continued in the business until 1 July 2016. His payment in FY17 relates to the period from 1 April 2016
to1 July 2016.
6
Under the early leaver provisions of the plan rules, Nick Wood received 19.2% of his total Matching Award under the Co-Investment Plan, as shown in the single figure table.
Given that this included time pro rating, with performance against the performance conditions being at 96% of maximum, the latter is shown here with the value of £198,168
ofthe Matching Awards.
7
Lyssa McGowan’s bonus outturn was prorated by length of employment, therefore the bonus outturn of 75.9% was reduced to reflect her time in employment during the FY24
bonus year.
8
Ian Kellett waived his bonus for FY18.
9
Shares were awarded on 17 March 2014 under the Co-Investment Plan. Based on performance in the period March 2014 to March 2017 the performance conditions for these
shares were measured in 2017 and the Committee determined that 16.8% of the awards would vest. The vested award became exercisable in equal tranches, subject to
continued employment, between May 2017 and March 2019. The first tranche of shares were released when the award vested in March 2017. The value for FY17 is based on the
share price of £1.981, being the average share price over the last three months of the performance period, being the period from 1 January to 30 March 2017. The second tranche
of shares were released on 17 March 2018. The value is based on the share price of £1.783 being the share price on 16 March 2018, being the last working day before the shares
were released. The final third tranche of shares vested on 17 March 2019 and were made available on the first working day being 18 March 2019. The value is based on the share
price of £1.600 being the share price on 15 March 2019, being the last working day before the shares were released.
Our Directors’ Remuneration Policy continued
Financial Statements
79
Strategic Report Governance
i) Percentage change in Executive Directors’ remuneration
The table below sets out the increase in total remuneration of Directors and that of all colleagues for FY24:
% Change in base salary
FY23 to FY24
% Change in bonus
earned FY23 to FY24
% Change in benefits
FY23 to FY24
Lyssa McGowan (CEO) 5.0% -100% No change
Mike Iddon (CFO) 3.5% -100% No change
Dennis Millard 0% n/a n/a
Roger Burnley 24.4% n/a n/a
Prof Susan Dawson 3.7% n/a n/a
Ian Burke 3.5% n/a n/a
Zarin Patel 19.3% n/a n/a
Dr Natalie-Jane McDonald
1
n/a n/a n/a
Angelique Angereau
1
n/a n/a n/a
Stanislas Laurent
2
n/a n/a n/a
All colleagues
3
8.8% -78% No change
1
Dr Natalie-Jane Macdonald and Angelique Angereau were both appointed during FY24 and therefore no annual change is shown.
2
Stanislas Laurent and Sharon Flood both stepped down from the board in FY24 and therefore no annual change is shown.
3
All colleague information is presented by comparing the average annual bonus paid in FY23 to the average annual bonus paid in FY24 and includes colleagues who started
throughout FY24.
j) Relative importance of the spend on pay
The following table shows the relationship between the Group’s PBT, distributions to shareholders and the total remuneration paid to
allcolleagues.
FY24
£m
FY23
£m
FY22
£m
FY21
£m
FY20
£m
FY19
£m
FY18
£m
Underlying PBT 132.0 136.4 130.1 87.5 93.5 89.7 84.5
Returned to shareholders:
Dividend 60.7 58.7 48.5 37.1 37.1 37.2 37.3
Share Buy Back 50.3 50.3 – – – – –
Payments to colleagues:
Wages and salaries 282.9 261.9 235.2 227.6 203.1 187.8 181.0
Pets at Home Group Plc Annual Report and Accounts 2024
80
k) Our CEO pay ratio FY24
This is our fifth year reporting our CEO pay ratio in line with the Code requirements.
The table below sets out the single figure total remuneration of the CEO compared to the median, lower quartile and upper quartile of the
colleague population. Remuneration is calculated on the same basis under Option A of the Companies (Miscellaneous Reporting) Regulations
2018 (the Regulations).
The ratio when calculated as required by the regulations can vary substantially from year to year as the CEO total remuneration is more heavily
weighted towards variable pay elements. For this reason, we continue to include a base pay comparison which webelieve will be a more
consistent approach year on year.
Ratio
CEO 25th percentile Median 75th percentile
FY24 Base Pay £ (FTE) 611,844 28:1 24:1 18:1
Total Single Figure Remuneration £ 652,098 29:1 24:1 18:1
FY23
1
Base Pay £ (FTE) 584,208 27:1 23:1 17:1
Total Single Figure Remuneration £ 1,338,502 59:1 50:1 38:1
FY22 Base Pay £ (FTE) 550,000 28:1 23:1 17:1
Total Single Figure Remuneration £ 1,831,435 88:1 72:1 52:1
FY21 Base Pay £ (FTE) 514,703 26:1 22:1 17:1
Total Single Figure Remuneration £ 2,140,916 106:1 88:1 69:1
Note: Ratios rounded to the nearest whole number.
1
The FY24 Total Single Figure Remuneration (TSFR) value has been calculated using the data required by the Regulations. For the FY24 TSFR, base pay references Lyssa’s base
pay for the full financial period yet she has no share plans which are vesting in FY24.
The following table provides base salary and total remuneration information in respect of the 25th, 50th and 75th percentile colleagues, on a
full-time equivalent basis.
Year CEO 25th 50th 75th
FY24 Base Pay £ (FTE) 611,844 21,549 25,961 33,644
Total Single Figure Remuneration £ 652,098 22,532 27,353 35,813
l) Consideration of wider colleague pay
Our culture and colleague engagement
Pets at Home’s unique culture and high levels of colleague engagement continue to be a key differentiator in attracting talent to our Group. Our
colleague listening sessions across all of our divisions combined with our annual ‘Your Voice’ engagement survey ensure that our colleagues can
express their opinions. The sessions allow us to gauge colleagues views on team morale, leadership and what is important to them as individuals
to enable them to perform at an optimum and enjoy their working experience at Pets At Home.
The Committee also receives feedback on the results from the engagement surveys to ensure the colleague voice and opinions from across the
business, as well as our Joint Venture Practice Owners, are heard and considered as part of our decision making.
Our Directors’ Remuneration Policy continued
Financial Statements
81
Strategic Report Governance
Colleague share ownership
It is pleasing that this pillar of our engagement strategy continues to come to fruition with our fourth RSP award (2020) vesting in May 2023. The
RSPs were offered to both salaried and hourly colleagues at all levels which resulted in enhancing shareholdings or creating new shareholders in
over 3,800 of our colleagues. The next RSP awards will vest at the end of June 2024 which will further enhance or create new shareholdings for
over 5,400 colleagues. We also granted a further 1.1m shares to over 10,000 colleagues via the RSP in May 2023 which will
vest in 2026.
Our 2020 SAYE scheme matured on 1 December 2023, generating a potential value of £3.6m, and a potential profit of £0.9m to over 700
colleagues based on the closing share price on the maturity date of £3.144. The Executive Management Team and Board will continue to actively
encourage engagement with our share plans and we see our share schemes as a key differentiator in both attracting talent and aiding colleague
retention. We granted a further offering of the SAYE scheme in September 2022, with a take up of 14.5%.
Gender Pay Gap report
We published our Gender Pay Gap report in March 2024. Both our mean and median pay gaps and our bonus pay gap reduced. As we reported
last year, the continuing difference between the proportion of women in our lowest pay quartile and the proportion of women in our highest
pay quartile is contributing to our gender pay gap. This year, more women than men in quartile four were new to role, or promoted during the
reporting period and this, along with the number of women working part-time, impacted our bonus pay gap. For further details the FY23 report
can be found at: https://www.petsathomeplc.com/media/pnflpzun/gender-pay-gap-report-2023.pdf.
The FTSE Women Leaders Review again recognised our high representation of women at executive level and our ranking increased to 5th
this year.
m) Dilution limits
In accordance with the Investment Association (IA) guidelines, the Company can satisfy awards under its colleague share plans with new issue
shares up to maximum of 10% of its issued share capital in a rolling ten-year period and within this 10% limit, the Company can only issue 5% of
its issued share capital to satisfy awards under discretionary plans (i.e. the DSBP and RSP). As at 28 March 2024, the Company’s dilution position
was 1.68% for all plans and 0.59% for the executive plans.
n) External appointments
Executive Directors are entitled to accept one external appointment outside the Company with the consent of the Board. Any fees received may
be retained by the Director. As at the date of this report, Mike Iddon, the Chief Financial Officer, is appointed to the Board of Wickes Group plc as
a Non-Executive Director (appointed 28 April 2021). The Chief Executive Officer, Lyssa McGowan holds no external appointments for which she
receives a fee.
o) Non-Executive Directors – letters of appointment
A summary of the Non-Executive Directors’ letters of appointment is contained on page 44 of this report.
Pets at Home Group Plc Annual Report and Accounts 2024
82
Statement of implementation for FY25
This section provides an overview of how the Committee is proposing to implement our Policy in FY25.
Base salary
The date for the pay review for the Executive Directors aligns to the wider management and salaried colleague population and takes place in
October each year.
When reviewing the Executive Directors’ base pay, the Committee will continue to benchmark against relative market comparisons to ensure
that the package is considered competitive and does not pose a risk to retention and succession planning, whilst at the same time taking into
consideration the salary increase to the broader colleague population and external impacts on the business. The Committee may over time
approve salary increases that are ahead of the wider colleague population, if this is indicated by a significant gap in market benchmark.
Benefits
The Committee sets benefits in line with the Policy and there are no proposed changes in the benefits policy forFY25 other than anticipated
standard inflationary increases on premiums.
Pensions
Executive Directors already receive a ompany pension contribution capped at the rate provided to colleagues in Support Office functions.
Currently this is up to 6.5% of base salary and consistent with pension contribution rates paid by other retailers. The Company continues to
actively target an increase in the employer contribution rate to the tier two pension scheme members which includes our retail hourly paid
colleagues by at least 0.5% per year.
Annual bonus
The maximum annual bonus opportunity for Executive Directors in respect of FY25 will continue at 170% for the CEO and to 150% for the
CFO. Athird of bonus will be awarded in shares in line with the Bonus Deferral Policy. The shares will not be released until a two-year holding
period is complete. This will continue to remain in place in FY24. We believe this will support in maintaining the alignment of executive and
shareholderinterests.
The annual bonus framework will be in line with that presented in the Remuneration Policy. The target metrics include FCF, PBT, sustainability
measures and will continue to have a Sustainability underpin which requires each Executive Director to complete a Better World Pledge Day. As
with previous years, the annual bonus will be subject to malus and clawback provisions. This provides the Committee with the ability to take back
amounts previously paid out for a period of up to two years under certain circumstances, including misstatement and misconduct.
Long-term incentive awards
It is proposed that awards under the RSP will be made in FY25 following the preliminary results announcement at 100% of salary for the CEO and
75% of salary for the CFO in line with the Policy and subject to a judgement-based underpin which will allow the Committee to take share price
performance into account in addition to business, individual and wider ompany performance during the vesting period. The three-year vesting
schedule and two-year post-vest holding period will apply to these awards.
SAYE
The Company intends to operate the SAYE scheme again for FY25. The maximum monthly savings will be retained at £500 per month. Executive
irectors are eligible to participate.
Non-Executive Director remuneration
The fees paid to the Non-Executive Directors will be reviewed again in October and benchmarked against relative market comparisons to see
whether there have been any changes in the market and to establish if the fees need a further adjustment in FY25. This follows an increase in
fees in FY24 as they had fallen behind the market benchmarks having not been adjusted prior to FY24 since 2014.
The table below shows the Non-Executive Director fee structure for FY25 that will be reviewed in October:
FY24 (£)
Chair of the Board (all-inclusive fee) 220,700
Basic Non-Executive Director fee 55,200
Board Committee Chair fee 11,100
Deputy Chair and Senior Independent Director 10,000
There are no fees paid for membership of Board Committees.
Our Directors’ Remuneration Policy continued
Financial Statements
83
Strategic Report Governance
Remuneration Committee
Shareholder context for the Committee’s activities
During the year, the Committee received independent advice on executive remuneration matters from Willis Towers Watson (WTW). WTW is a
member of the Remuneration Consultants Group (RCG) and, as such, voluntarily operates under the code of conduct in relation to executive
remuneration consulting in the UK. The Committee has reviewed the advice provided by WTW during the year and is comfortable that it has
been objective and independent. Total fees received by WTW in relation to the remuneration advice provided to the Committee during FY24
amounted to £93,770 (FY23: £199,939) based on the required time commitment.
During FY24 the Committee also received support from Travers Smith LLP on the terms of the discretionary and all-colleague share plans.
Committee membership and meetings
The Directors listed below in the table served on the Committee during the year. The Committee met four times during FY24 and the Committee
members’ attendance is also shown in the table below:
Member Period from To Meetings attended
Roger Burnley (Chair) 31 March 2023 28 March 2024 4/4
Prof Susan Dawson 31 March 2023 28 March 2024 4/4
Zarin Patel 31 March 2023 28 March 2024 4/4
Sharon Flood 31 March 2023 26 May 2023 1/1
The individuals listed in the table below, none of whom were Committee members, attended at least part of a meeting by invitation during
theyear.
Attendee Position
Lyssa McGowan CEO
Mike Iddon CFO
Ian Burke Chair of the Board
Lucy Williams Chief People and Legal Officer
Amy Whidburn Director of Sustainability
Amy Smith/Matt Corr Head of Reward
Lesley Lazenby Legal Director and Company Secretary
Dennis Millard Non-Executive Director
Stanislas Laurent Non-Executive Director
Natalie-Jane Macdonald Non-Executive Director
Angelique Augereau Non-Executive Director
Paul Townsend Willis Towers Watson
Alex Little Willis Towers Watson
None of the individuals were involved in making decisions at meetings regarding their own compensation.
Governance
The Board and the Committee consider that, throughout FY24 and up to the date of this report, the Company has complied with the provisions
of the UK Corporate Governance Code relating to Directors’ remuneration.
Pets at Home Group Plc Annual Report and Accounts 2024
84
Shareholder voting
At the Annual General Meeting on 6 July 2023, the total number of shares in issue with voting rights was 482,662,864. The resolution to approve
the DRR received the following votes from shareholders:
To approve the Directors’ Remuneration Report for the year ended 30 March 2023
Votes for
1
346,222,646
%
2
95.41
Votes against 16,661,771
% 4.59
Votes total 362,884,417
% of issued share capital
3
75.18
Votes withheld
4
16,308
1
Votes ‘for’ include discretionary votes.
2
Percentages above are rounded to two decimal places.
3
Issued share capital at meeting date: 482,662,864.
4
A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes ‘for’ and ‘against’ a resolution.
Annual General Meeting
As set out in my statement on pages 66 to 69, our Directors’ Remuneration Report will be subject to an advisory vote at our AGM to be held
on11July2024.
On behalf of the Board
Roger Burnley
Chair of the Remuneration Committee
28 May 2024
Our Directors’ Remuneration Policy continued
Financial Statements
85
Strategic Report Governance
Directors’ Report
This section of the Annual Report includes additional information required to be disclosed under the Companies Act 2006 (Companies Act),
the UK Corporate Governance Code 2018 (‘2018 Code’), the Disclosure Guidance and Transparency Rules and the Listing Rules of the Financial
Conduct Authority.
The Company has chosen in accordance with section 414C(11) of the Companies Act to provide disclosures and information in relation to a
number of additional matters which are covered elsewhere in this Annual Report. These matters and cross-references to the relevant sections of
this Annual Report are shown in the table below.
Pets at Home Group Plc
Registered Number: 8885072
Registered Office: Epsom Avenue, Stanley Green Trading Estate, Handforth, Cheshire, SK9 3RN
Telephone Number: +44 161 486 6688
Date of Incorporation: 10 February 2014
Country of Incorporation: England and Wales
Type: Public Limited Company
Statutory information Section heading Page number
Amendment of the Articles Directors’ Report 89
Appointment and Removal of Directors Directors’ Report 87
Board of Directors Directors’ Report 87
Board of Directors 34 and 35
Branches outside of the UK Directors’ Report 90
Change of Control Directors’ Report 90
Colleague Engagement Strategic Report 12
Directors’ Report 80 to 81
Colleague Diversity and Disabilities Directors’ Report 41
Colleague Share Ownership and Plans Directors’ Remuneration Report 81
Community Strategic Report – Sustainability Review 12 to 14 and 16
Compensation for loss of office Directors’ Report 76
Directors’ Biographies Board of Directors 34 and 35
Directors’ Information to Auditors Directors’ Report 91
Directors’ Insurance and Indemnities Directors’ Report 88
Directors’ Interests Directors’ Report 88
Directors’ Responsibility Statement Directors’ Report 92
Executive Share Plans Directors’ Remuneration Report 77
Financial Instruments Note 23 to the consolidated financial statements 139 to 148
Future Developments of the Business Strategic Report 6 to 32
Financial position of the Group, its cash flows,
liquiditypositionandborrowing facilities
Chief Financial Officer’s Review 19 to 21
Greenhouse Gas Emissions Strategic Report – Sustainability Review 54 to 64
Going Concern Directors’ Report 89
Health and Safety Strategic Report – Sustainability Review 39
Human Rights and Modern Slavery Statement Directors’ Report 90
Independent Auditors Directors’ Report
91
Audit and Risk Committee Report
51
Internal Controls and Risk Management Governance Report
22 to 32
Political Donations Directors’ Report
89
Profits and Dividend Directors’ Report
89
Post Balance Sheet Events Directors’ Report
89
Powers for the Company to issue or buy back its shares Directors’ Report
88
Pets at Home Group Plc Annual Report and Accounts 2024
86
Statutory information Section heading Page number
Powers of the Directors Directors’ Report 88
Principal Activities Directors’ Report 86
Research and Development Directors’ Report 86 to 87
Restrictions on Transfer of Securities Directors’ Report 88
Stakeholder Engagement Strategic Report – Stakeholder engagement 12 to 15
Share Capital Directors’ Report 88
Note 22 to the consolidated financial statements 138
Significant Related Party Transactions Directors’ Report 89
Note 27 to the consolidated financial statements 156 to 157
Significant Shareholders Directors’ Report 89
Subsidiary and Associated Undertakings Note 28 to the consolidated financial statements 157 to 167
Statement of Corporate Governance Directors’ Report 36
The Audit and Risk Committee Report Governance Report 46 to 51
The Governance Report Governance Report 33 to 92
The Directors’ Remuneration Report Governance Report 66 to 84
The Nomination and Corporate Governance Committee Report Governance Report 44 to 45
Strategic Report Strategic Report 2 to 32
Treasury and Risk Management Strategic Report 31
Viability Statement Directors’ Report 90
Voting Rights Directors’ Report 88
Research and development
The Strategic Report (pages 2 to 32) sets out the innovation
carriedout by the Group in relation to product and service
development.
Over the past year the clinical and pet welfare team have continued
their work within the regulatory, legislative and research spaces.
We partnered with Royal Veterinary College (RVC) Vet Compass
team on their project “Improved stewardship to protect veterinary
antimicrobial usage in UK cats and dogs”. We also continue to share
our anonymised clinical data with Vet Compass to support their
research. We continue our membership of RUMA CA&E (Responsible
Use of Medicines in Companion Animal & Equine Alliance) to actively
participate in efforts to promote the responsible use of antibiotics.
During FY24, we gave both written and oral evidence the EFRA
(Environment, Food & Rural Affairs) discussing the importation of
dogs and cats that have undergone cosmetic mutilations such as ear
cropping and claw removal, and the need to close the legal loopholes
that allow this. Further we discussed the pressing need for the
modernisation of the 1966 Veterinary Surgeon’s Act.
With a continued focus on our advocacy work, we are continuing
our engagement work in regards to improving animal welfare and
supporting the development of veterinary and pet care professionals.
In early 2024, members of the clinical team attended a parliamentary
round tablet to discuss the issues of puppy smuggling and animal
welfare. Within our advocacy approach, of particular focus is the
work of Registered Veterinary Nurses (RVN) and we have undertaken
listening focus groups around the country with our RVN colleagues.
Disclosures required under Listing Rules
In accordance with Listing Rule 9.8.4C, the information required to be
disclosed in the Annual Report under Listing Rules 9.8.4R and 9.8.6(8)
is disclosed on the following pages of this Annual Report:
Disclosure Page number
Long-term incentive schemes 72
Significant contracts 89
Dividend waivers
Note 9 to the consolidated
financial statements
Statement of capitalised interest 121
Climate-related financial disclosures
consistent with TCFD 54 to 65
The Company’s registrar is Computershare Investor Services Plc
situated at The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ.
Directors’ Report continued
Financial Statements
87
Strategic Report Governance
We continue to advocate for the use of the voluntary British
Veterinary Association (BVA) Good Workplace code, and the code is
now being developed into an accreditation scheme which is due to be
launched in late 2024. Over the 9 months we have worked closely with
the BVA on refinement of the scheme, with one practice taking part
in the initial pilot and a second practice is currently going through
accreditation in the BVA’s final phase of preparation prior to industry
wide launch.
Accreditation is based on a framework of 4 themes: health and
wellbeing, leadership and management, culture and learning
and development.
We presented the new accreditation scheme at our recent
conference. Over 75% of practice owners attending indicated
they would be interested in accreditation and work has started
on providing a resource hub for practices wishing to undertake
accreditation.
Our clinical research lead formed part of our pet food expert panel
whose purpose is to create evidence based guidelines that will help
align our future food strategy with our pet welfare, livestock welfare
(ingredient) and sustainability objectives.
Directors
The names of the persons who, at any time during the financial year,
were Directors of the Company are:
Name Date of appointment Date of resignation
Dennis Millard 18 February 2014 (reappointed) 29 February 2024
Mike Iddon 17 October 2016 (reappointed) n/a
Sharon Flood 25 May 2017 26 May 2023
Stanislas Laurent 25 May 2017 26 May 2023
Susan Dawson 12 July 2018 (reappointed) n/a
Ian Burke 27 March 2020 (reappointed) n/a
Zarin Patel 14 April 2021 (reappointed) n/a
Lyssa McGowan 25 April 2022 (reappointed) n/a
Roger Burnley 14 February 2023 n/a
Natalie-Jane
Macdonald 27 May 2023 n/a
Angelique Augereau 22 January 2024 n/a
Further details in relation to Director changes are included on
pages44 to 45.
Appointment and removal of Directors
The appointment and removal of Directors of the Company is
governed by the Articles.
Appointment of Directors: A Director may be appointed by the
Company by an ordinary resolution of the Company’s shareholders or
by the Board. The Board or any Committee authorised by the Board
may from time to time appoint one or more Directors to hold any
employment or executive office for such period and on such terms
as they may determine and may also revoke or terminate any such
appointment. A Director appointed by the Board holds office only until
the next Annual General Meeting of the Company and is then eligible
for reappointment.
Annual re-election of Directors: All Directors stand for re-election on
an annual basis in line with the recommendations of the 2018 Code.
Removal of Directors: A Director may be removed by the Company in
certain circumstances set out in the Articles or by a special resolution
of the Company’s shareholders.
Vacation of office: The office of a Director shall be vacated if (amongst
other circumstances): (i) he/she is prohibited by law from being a
Director; (ii) he/she resigns; (iii) his/her resignation is requested by all of
the other Directors; (iv) he/she is or has been suffering from mental or
physical ill health and the Board resolves that his/her office be vacated;
(v) he/she is absent without the permission of the Board from meetings
of the Board (whether or not an alternate Director appointed by him/her
attends) for six consecutive months and the Board resolves that his/her
office is vacated; (vi) he/she becomes bankrupt; (vii) he/she ceases to
be a Director by virtue of the Companies Act; or (viii) he/she is removed
from office pursuant to the Articles.
Powers of the Directors
Subject to the Articles, the Companies Act, any directions given by
the Company by special resolution of the Company’s shareholders
and any relevant statutes and regulations, the business of the
Company will be managed by the Board which may exercise all the
powers of the Company.
Directors’ interests
Information relating to the Directors’ interests in, and options over,
Ordinary Shares in the capital of the Company are shown in the
Directors’ Remuneration Report on page 77.
In accordance with Disclosure Guidance and Transparency Rule
9.8.6R(1)(a) and (b), in the period between the end of the financial year
and 22 May 2024 (being not more than one month prior to the date of
the Notice of Annual General Meeting), there have been no changes
to such interests.
In line with the requirements of the Companies Act, each Director
has notified the Company of any situation in which he or she has, or
could have, a direct or indirect interest that conflicts, or possibly may
conflict, with the interests of the Company (a situational conflict).
These were considered and approved by the Board in accordance
with the Articles and each Director informed of the authorisation and
any terms on which it was given. The Board has formal procedures
to deal with Directors’ conflicts of interest as and when they arise.
The Board reviews and, where considered appropriate, approves
situational conflicts of interest that were reported to it by Directors
and a register of those situational conflicts is maintained by the
Company. The register is reviewed bythe Board on an ongoing basis.
Pets at Home Group Plc Annual Report and Accounts 2024
88
Compensation for loss of office
The Company does not have any agreements with any Director
or colleague that would provide compensation for loss of office or
employment (whether through resignation, redundancy or otherwise)
resulting from a takeover bid except that it should be noted that
provisions of the Company’s share schemes may cause options and
awards granted to Directors or colleagues under such schemes to
vest on a takeover. For further information on the change of control
provisions in the Company’s share schemes refer to the Remuneration
Policy (which is available in full in the 2023 Annual Report on our
investor website).
Directors’ insurance and indemnities
The Company maintains Directors’ and officers’ liability insurance
cover for its Directors and officers (and those of other Group
companies) as permitted under the Articles and the Companies Act.
Such insurance policies were renewed during the period and remain
in force as at the date of this Annual Report. Each Director and officer
of the Company also has the benefit of a qualifying indemnity, as
defined by section 236 of the Companies Act, and as permitted by the
Articles. An indemnity deed is entered into by a Director at the time
of his or her appointment to the Board. Prospectus liability insurance
remains in force which provides cover for liabilities incurred by certain
Directors in the performance of their duties in connection with the
issue of the Company’s prospectus dated 28 February 2014 in relation
to the Company’s Initial Public Offering and Listing.
No amount was paid under any of these indemnities or insurances
during the financial year other than the applicable insurance premiums.
Share capital
The issued share capital of the Company as at 28 March 2024 was
467,911,542 Ordinary Shares of 1 pence each. As at 22 May 2024, being the
latest practicable date prior to the date of this Annual Report, the issued
share capital of the Company remained at 467,911,542 Ordinary Shares of
1 pence each. Further information regarding the Company’s issued share
capital can be found in note 22 to the Group’s financial statements.
During the 2024 financial period, the Company carried out a share
buyback programme which commenced on 26 June 2023 and finished
on 14 March 2024. The Company’s share capital was reduced from
483,197,785 Ordinary Shares of 1 pence each to 467,911,542 Ordinary
Shares of 1 pence each as noted above.
Details of colleague share schemes are provided in note 24 to the
Group’s financial statements.
Voting rights
All members who hold Ordinary Shares are entitled to attend and
vote at the Annual General Meeting. On a show of hands at a general
meeting every member present in person shall have one vote and on a
poll, every member present in person or by proxy shall have one vote
for every Ordinary Share held. No shareholder holds Ordinary Shares
carrying special rights relating to the control of the Company and the
Directors are not aware of any agreements between holders of the
Company’s shares that may result in restrictions on voting rights.
Powers for the Company to issue shares: The Directors were granted
authority at the previous Annual General Meeting on 6July2023 to
allot shares in the Company under two separate resolutions: (i) up to
one-third of the Company’s issued share capital; and (ii) up to two-
thirds of the Company’s issued share capital in connection with a rights
issue. These authorities apply until the end of the next Annual General
Meeting to be held on 11 July 2024 (or, if earlier, until the close of
business on 5October 2024). During the period, the Directors did
not use their power to issue shares under the authorities, but did
satisfy options and awards under the Company’s option and
incentive schemes.
The Directors were also granted authority at the previous Annual
General Meeting on 6 July 2023 to disapply pre-emption rights.
This resolution (which is in accordance with the guidance issued by
the Pre-Emption Group (‘the PEG Principles’)) sought the authority
to disapply pre-emption rights over 5% of the Company’s issued
ordinary share capital. A further authority was also granted to disapply
pre-emption rights in respect of an additional 5% for financing a
transaction which the Directors determine to be an acquisition or
other capital investment as allowed by the PEG Principles. During the
period, the Directors did not use their power to issue shares under the
authorities, but did satisfy options and awards under the Company’s
option and incentive schemes. The Company will, consistent with the
2023 Annual General Meeting, seek to renew these powers at the
2024 Annual General Meeting.
Powers for the Company to buy back its shares: The Company
was authorised by its shareholders on 6 July 2023, at the 2023
Annual General Meeting, to purchase in the market up to 10% of its
issued Ordinary Shares (excluding any treasury shares), subject to
certain conditions laid out in the authorising resolution. This standard
authority is renewable annually and the Directors will seek to renew
this authority at the 2024 Annual General Meeting to be held on
11July 2024.
Restrictions on transfer of Ordinary Shares
The Company’s shares are freely transferable, save as set out below.
The transferor of a share is deemed to remain the holder until the
transferee’s name is entered in the register. The Board can decline to
register any transfer of any share which is not a fully paid share. The
Company does not currently have any partially paid shares. TheBoard
may also decline to register a transfer of a certificated share unless
the instrument of transfer: (A) is duly stamped or certified or otherwise
shown to be exempt from stamp duty and is accompanied by the
relevant share certificate; (B) is in respect of only one class of share;
and (C) if to joint transferees, is in favour of not more than four such
transferees. Registration of a transfer of an uncertificated share may
be refused in the circumstances set out in the CREST Regulations
(as defined in the Articles) and where, in the case of a transfer to joint
holders, the number of joint holders towhom the uncertificated share
is to be transferred exceeds four. Certain restrictions are also imposed
by laws and regulations (suchas the Market Abuse Regulation) and
pursuant to the Company’s share dealing code whereby certain
Directors and Persons Discharging Managerial Responsibility
and restricted colleagues require clearance to deal in the
Company’s securities.
Directors’ Report continued
Financial Statements
89
Strategic Report Governance
Significant shareholdings
Information provided to the Company pursuant to the Disclosure
Guidance and Transparency Rules is published on a Regulatory
Information Service and on the Company’s website. As at
28March2024, the following information had been received, in
accordance with DTR5.1.2R, from holders of notifiable interests in the
Company’s issued share capital. These figures represent the number
of shares and percentages held as at the date of notification to the
Company. It should be noted that these holdings may have changed
since notified to the Company however, notification of any change is
not required until the next applicable threshold is crossed.
Name of shareholder
Number of
Ordinary
Shares as at
28 March 2024
Percentage
of issued
share capital
(%)
Nature of
holding
(direct/
indirect)
Schroder Investment
Management Ltd. 51,728,978 11.1 Indirect
Capital Research
Global Investors 36,667,139 7.8 Indirect
Fidelity Management &
Research Company LLC 17,853,433 3.8 Indirect
Allianz Global
Investors GmbH 17,558,322 3.8 Indirect
The Vanguard Group, Inc. 17,529,761 3.7 Indirect
Marathon-London 17, 347,129 3.7 Indirect
BlackRock Investment
Management (UK) Ltd 14,048,164 3.0 Indirect
No changes have been disclosed in accordance with Disclosure
Guidance and Transparency Rule 5.1.2R in the period between
28March 2024 and 22 May 2024 (being not more than one month
prior to the date of the Notice of Annual General Meeting).
Significant related party transactions
There are no contracts of significance during the financial period
between the Company or any Group company and: (1) a Director
of the Company; (2) a close member of a Director’s family; or (3)
acontrolling shareholder of the Company.
Amendment of the Articles
The Articles may only be amended by a special resolution of the
Company’s shareholders in a general meeting, in accordance with
theCompanies Act.
Profits and dividend
The consolidated profit for the year after taxation and all non-
underlying items was £79.2m (FY23: £100.7m). The results
arediscussed in greater detail in the Chief Financial Officer’s
reviewonpages 19 to 21.
A final dividend of 8.3 pence per ordinary share (FY23: 8.3 pence per
ordinary share) will be recommended to the Company’s shareholders
in respect of the 2024 financial year. The final dividend will be
proposed by the Directors at the 2024 Annual General Meeting on
11 July 2024 in respect of the financial year ended 28March 2024 to
add to an interim dividend of 4.5 pence per ordinary share paid on
12January 2024 (FY23: 4.5 pence per ordinaryshare).
The Directors’ proposed final dividend of 8.3 pence per ordinary share
takes the total dividend payable in respect of the 2024 financial
year to 12.8 pence per ordinary share. The ex-dividend date will be
6June2024 and, subject to shareholder approval being obtained at
the 2024 Annual General Meeting, the final dividend of 8.3 pence per
ordinary share will be payable on 16 July 2024 to shareholders on the
register at the close of business on 7June2024.
Political donations
The Group made no political donations and incurred no political
expenditure during the year (FY23: nil). It remains the Company’s
policy not to make political donations or to incur political expenditure,
however the application of the relevant provisions of the Companies
Act is potentially very broad in nature and, as with last year, the Board
is seeking shareholder authority to ensure that the Group does not
inadvertently breach these provisions as a result of the breadth of its
business activities. The Board has no intention of using this authority.
Suppliers
The Group understands the importance of maintaining good
relationships with suppliers and it is Group policy to agree appropriate
terms and conditions for its transactions with suppliers (ranging from
standard written terms to individually negotiated contracts) and for
payment to be made in accordance with these terms, provided the
supplier has complied with its obligations. Average trade creditors of
the Group’s operations for FY24 were 56days (FY23: 51 days).
Post balance sheet events
There are no post balance sheet events that are non-adjusting
requiring disclosure.
Going concern
The unprecedented uncertainty created by current geopolitical
instability, inflationary pressures, economic uncertainty and the
potential impacts of climate change as noted in our TCFD scenario
analysis, make it challenging to predict how the business will be
impacted in the year ahead, but on the basis of current financial
projections and facilities available, the Directors are satisfied that
the Group is well placed to manage its business risks successfully
and therefore have a reasonable expectation that the Group has
adequate resources to continue in operational existence for a period
of 12 months from the date of approval of the financial statements.
Accordingly, the financial statements continue to be prepared on a
going concern basis.
The impact of geopolitical instability on our supply chains, the
impact of inflationary pressures and the considerations from
our TCFD scenario analysis are discussed in detail in the Chief
ExecutiveOfficer’s statement on page 7. The basis of preparation
and going concern assessment can be found within note 1 to the
financial statements.
Pets at Home Group Plc Annual Report and Accounts 2024
90
Viability statement
The Group has developed a detailed strategic and business planning
(‘SBP’) process, which comprises a strategic plan (Strategic Plan)
containing financial projections and a Business Plan which forms a
detailed near term one-year plan for the upcoming financial year.
The SBP process produces standard outputs in respect of the key
financial performance metrics of the Group which deliver consolidated
financial plans at both Group level and at a number of levels within
the Group. The Strategic Plan is reviewed each year by the Board as
part of the strategy review process. Once approved by the Board, the
Strategic Plan is cascaded across the Group and provides the basis
for setting all detailed financial budgets and strategic actions that
are subsequently used by the Board to monitor performance. The
SBP process covers a five-year period. The five-year plan provides
a robust planning tool against which strategic decisions can be
made. In making their viability assessment, the Board has taken into
consideration the resilience of the pet care market and that financing
facilities are maintained for the duration of the Strategic Plan, as
well as the potential impact of geopolitical instability, inflationary
pressures, the current ongoing CMA market investigation into the
veterinary services market for household pets in the UK, and the
impact of climate change and the Task Force on Climate Related
Financial Disclosures (‘TCFD’) scenario analysis on future cash
flows and liquidity. The Directors have considered a combination of
risks and uncertainties and the mitigating controls operated by the
Group as detailed on pages 22 to 32 that may impact on the Group’s
reputation and its ability to trade. These risks include issues on pet
welfare, competitor activity and broader macro-economic risks and
their impact on the Strategic Plan on an individual and combined
level. On this basis and in conjunction with other matters considered
and reviewed by the Board during the year, the Board has reasonable
expectations that the Group will be able to continue in operation and
meet its liabilities as they fall due over the five financial years used
for its assessment. In making this assessment, the Board has assumed
that there is no material change in the legislative environment in
relation to the sale of small animals and the practice of veterinary
medicine. It is recognised that such future assessments are subject
to a level of uncertainty that increases with time and therefore future
outcomes cannot be guaranteed or predicted with certainty.
Modern Slavery Act
Our Modern Slavery Statement is reviewed and approved by the
Board on an annual basis and published on our investor website.
The statement covers the activities of Pets at Home Limited and
Companion Care (Services) Limited (whose activities fall within the
scope of s.54(2) of the Modern Slavery Act 2015) and details the
policies, processes and actions taken to ensure that slavery and
human trafficking are not taking place in our supply chain or any
partof our business.
Anti bribery matters
The Group has a zero tolerance approach to bribery and corruption
and supports colleagues to make decisions in line with this position.
The Group’s anti-bribery policy applies to all colleagues and extends
to our business dealings and transactions in all countries in which the
business operates. The policy is implemented in conjunction with the
Group’s Code of Ethics and Business Conduct. Colleagues receive
training in relation to bribery and corruption as appropriate.
Our policies and contractual controls
We are committed to ensuring there is transparency in our business
and throughout our supply chain. Our Code of Ethics and Business
Conduct policy reflects our commitment to acting ethically and with
integrity in all our business dealings and relationships and we expect
full compliance with it by colleagues, suppliers and business partners.
Our policy is reviewed on an annual basis.
Our suppliers are also required to comply with our Ethical Trading
policy which sets out the minimum standards that they are required
to adhere to wherever they procure materials, manufacture or perform
services for, or supply products to, our business. We also contractually
require suppliers to comply with the Group’s Code ofEthics and
Business Conduct policy.
Our supplier standard general terms and conditions include a right for
Pets at Home to conduct audits on supplier compliance. Our Group
Whistleblowing policy promotes vigilance amongst colleagues and
encourages central reporting of concerns about anyissue or suspicion
in any parts of our business or supply chain.
Branches outside of the UK
The Company has no branches outside of the UK.
Change of control
The only significant agreements to which the Company is a party
that take effect, alter or terminate upon a change of control of
the Company following a takeover bid, and the effect thereof,
areasfollows:
– The Group has a revolving credit facility with a total facility
amount of £300m. This senior facilities agreement expires on
30 September 2028 (unless extended in accordance with its terms),
and contains customary prepayment, cancellation and default
provisions including, if required by a lender, mandatory prepayment
of all utilisations provided by that lender upon the sale of all or
substantially all of the business and assets of the Group or a change
of control. In addition the Group has a £26m loan facility to fund
the purchase of capital items which expires on 27 March 2030 and
mirrors the terms of the senior facilitiesagreement.
– The Company’s subsidiary, Companion Care (Services) Ltd
(CCSL), has an existing facility agreement dated November
2020 with Santander for a reducing basis (non-revolving) loan
facility with a three-year availability period. During the year, this
facility was reduced from £20m to £10m and extended for one
year to November 2024. In addition to the Santander facility
agreement, CCSL also has an agreement with Lloyds dated May
2021 and, along with Vet4Pets Limited (V4P), a further facility with
HSBC dated April 2021. Both the HSBC and Lloyds facilities are
capable of being reborrowed and contain clauses that vary the
maximum facility limits over their availability periods. Both facility
agreements were successfully extended to April 2025 and May
2025 respectively. As at 28 March 2024, the maximum facility
limit on the HSBC and Lloyds facility agreements were £10m
and £18.5m respectively. CCSL is currently in discussions with all
existing lenders regarding new facility agreements.
– Alongside these new facilities, the portfolio of Joint Venture
companies also have existing loans in place with NatWest (RBS)
and Lloyds under historic agreements. These agreements are no
longer active, however the loans drawn down under them are still
being repaid over time.
– Pursuant to the terms of these facility agreements entered
into in November 2020, April and May 2021, CCSL and V4P
provide guarantees in respect of a certain fixed proportion of the
outstanding facility loans provided to the Joint Venture practices
which borrow under the facility. The facility agreements contain
customary prepayment, cancellation and default provisions which
include the event of a change of control (direct or indirect) of CCSL
or V4P. For these purposes ‘control’ means the power (whether by
way of ownership of shares, proxy, contract, agency or otherwise) to:
(a) cast or control more than 90% of the votes that may be cast at a
general meeting of CCSL or V4P (as relevant); (b) appoint or remove
all or a majority of the Directors of CCSL or V4P (as relevant); (c)
give directions with respect to the operating and financial policies
of CCSL or V4P (as relevant) with which the Directors are obliged to
comply; and/or (d) hold beneficially (directly or indirectly) at least
90% of the issued share capital of CCSL or V4P (as relevant). The
historic agreements contain similar clauses and guarantees.
Directors’ Report continued
Financial Statements
91
Strategic Report Governance
Directors’ information to auditors
In accordance with section 418 of the Companies Act, each Director
who held office at the date of the approval of this Directors’ Report
(whose names and functions are listed in the Board of Directors on
pages 34 to 35) confirms that, so far as he or she is aware, there is no
relevant audit information of which the Group’s auditor is unaware,
and that each Director has taken all of the steps that he or she ought
to have taken as a Director in order to make himself or herself aware
of any relevant audit information and to establish that the Group’s
auditor is aware of that information.
Independent auditors
During the 2016 financial year, a competitive tender process of
audit services was completed in accordance with the requirements
of TheStatutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014 (the Order). KPMG
LLP was reappointed as auditor of the Company at the 2022 Annual
General Meeting.
During the year, the Company carried out a competitive tender
process for external audit services, as noted on page 51 of the
Audit and Risk Committee report. Deloitte LLP were selected as the
Company’s new auditor and will commence provision of audit services
for FY25. Resolutions concerning the appointment of Deloitte LLP as
auditor of the Company and to authorise the Directors to determine
their remuneration will be proposed at the 2024 Annual General
Meeting as set out in the Notice of Annual General Meeting. For
further information on the appointment of the auditors, refer to
page 51 of the Audit and Risk Committee Report.
Corporate Governance Statement
The Corporate Governance Report is referred to on pages 33 to 92
and includes details of compliance with the Code.
A description of the main features of our internal control and risk
management arrangements in relation to the financial reporting
process is set out on pages 22 to 32. The information required under
DTR 7.2.6R can be found in the Governance section of this Annual
Report. Adescription of the Board composition, operation and
itsCommittees, including diversity matters, is set out on pages 36
to43. The Code can be viewed on the FRC’s website at frc.org.uk
Additional Information
In order to consolidate our reporting requirements, the following
information is incorporated by reference into this Directors’ Report:
Page
Colleague engagement 80
Colleague share ownership and plans 81
Colleague diversity and disabled persons 41
Greenhouse gas emissions Sustainability
Report, 54 to 64
Approval of Annual Report
The Strategic Report, Corporate Governance Statement and the
Governance Report were approved by the Board on 22 May 2024.
ThisDirectors’ Report was approved by the Board on 22 May 2024
and signed on its behalf by:
Lesley Lazenby
Legal Director & Company Secretary
28 May 2024
Non-financial and sustainability information statement
Non-financial measures are an important part of our business. The table below
constitutes the Company’s non-financial and sustainability information statement
as required by sections 414CA and 414CB of the Companies Act 2006. Our
Sustainability Report and corporate website (https://www.petsathomeplc.com/
investors/) contain non-financial information, including actions, to manage our
environmental and social impact and look after our colleagues.
Risk Relevant policies and documents Impacts and Metrics
Environmental • Packaging policy
• Environmental Policy
• TCFD statement page 54 to 65
• Sustainability Report
• Supplier Code of Conduct
• Responsible Sourcing Handbook
• Raw Materials Sourcing Policy
• Impacts on climate, environment,
deforestation in our operations, supply chains
and product impacts
• Climate change risk management & mitigation
Colleagues • Diversity and Inclusion Policy
• Whistleblowing policy
• Sustainability Report
• Health and Safety policy
• Colleague Handbook
• Annual Report pages 41, 42, 45
and 53
• Culture, engagement, safety and wellbeing
• Pay and Reward, training and development
• Diversity and Inclusion
Social matters • Responsible Sourcing Handbook
• Anti-bribery and corruption
• Sustainability Report
• Tax Strategy
• Pets Foundation Impact Report
• Working with suppliers on supply chain ethics
and environmental impact
• Community & charity impact
• Responsible business
Respect for
human rights
• Human Rights policy
• Supplier Code of Conduct
• Whistleblowing policy
• Modern Slavery Act Statement
• Annual Report pages 53 and 90
• Human rights in our business & supply chains
• Supplier expectations
• Grievance mechanisms
Anti-corruption
and anti-bribery
matters
• Anti-bribery policy
• Code of Ethics and Business
Conduct
• Responsible Sourcing Handbook
• Supplier Code of Conduct
• Annual Report page 90
Copies of our policies are available on our
investor website: www.petsathomeplc.com
Information relating to our business
model is included on page 4
Our non-financial KPIs are
detailed on page 9
Information relating to how the business
manages risk is set out on pages 22 to 32
Pets at Home Group Plc Annual Report and Accounts 2024
92
Statement of Directors’ Responsibilities in Respect
of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the
Group and parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements in
accordance with UK-adopted international accounting standards
and applicable law and have elected to prepare the parent Company
financial statements on the same basis.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the Group and parent Company and of the
Group’s profit or loss in the period. In preparing each of the Group and
parent Company financial statements, the Directors are required to:
– Select suitable accounting policies and then apply them
consistently;
– Make judgements and estimates that are reasonable, relevant
andreliable;
– State whether they have been prepared in accordance with UK
adopted international accounting standards;
– Assess the Group and parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern; and
– Use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure
that its financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error, and
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent
anddetect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (DTR)
4.1.16R and 4.1.14R, the financial statements will form part of the annual
financial report prepared under DTR 4.1.17R and 4.1.18R using the
single electronic reporting format under the TD ESEF Regulation. The
auditor’s report on these financial statements provides no assurance
over the ESEF format or whether the annual report has been prepared
in accordance with those requirements.
Responsibility statement of the Directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
– The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation
taken as a whole; and
– The Strategic Report includes a fair review of the development
and performance of the business and the position of the issuer
and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Group’s position and performance,
business model and strategy.
Approved by the Board and signed on its behalf by:
Lyssa McGowan
Chief Executive Officer
28 May 2024
93
Strategic Report Governance Financial Statements
Financial statements
94 Independent Auditor’s Report
100
Consolidated Income Statement
100
Consolidated Statement of Comprehensive Income
101 Consolidated Balance Sheet
102 Consolidated Statement of Changes in Equity as at 28March 2024
102 Consolidated Statement of Changes in Equity as at 30March 2023
103 Consolidated Statement of Cash Flows
104
Company Balance Sheet
105
Company Statement of Changes in Equity as at 28March 2024
105 Company Statement of Changes in Equity as at 30March 2023
106 Company Statement of Cash Flows
107
Notes (Forming Part of the Financial Statements)
168 Glossary – Alternative Performance Measures
Pets at Home Group Plc Annual Report and Accounts 2024
94
Independent Auditor’s Report
to the members of Pets at Home Group plc
1. Our opinion is unmodified
We have audited the financial statements of Pets at Home Group
plc (‘the Company’) for the 52 week period ended 28 March 2024
which comprise the Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated Balance
Sheet, Consolidated Statement of Changes in Equity, Consolidated
Statement of Cash Flows, Company Balance Sheet, Company
Statement of Changes in Equity, Company Statement of Cash Flows ,
and the related notes, including the accounting policies in note 1.
In our opinion:
– the financial statements give a true and fair view of the state of
the Group’s and of the parent Company’s affairs as at 28 March
2024 and of the Group’s profit for the 52 week period then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the parent Company financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the
provisions of the Companies Act 2006 and;
– the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities
are described below. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 10 February
2014. The period of total uninterrupted engagement is for the 11
financial periods ended 28 March 2024. We have fulfilled our ethical
responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
Overview
Materiality: group
financial statements
as a whole
£5.9m (2023: £6.8m)
4.5% (2023: 5.0%) of underlying
Group profit before tax
Coverage 98% (2023: 97%) of group
profit before tax
Key audit matters vs 2023
Recurring risks Recoverability of
goodwill for the Retail
Cash Generating Unit
(‘CGU’) and Vets Group
CGU (2023: Carrying
value of Goodwill for
the Vets Group CGU)
Parent Company
key audit matter
Recoverability of
parent Company’s
investment in its
subsidiary
95
Strategic Report Governance Financial Statements
The risk Our response
Recoverability of
Goodwill allocated
to Retail Cash
Generating Unit
(‘CGU’) and Vet
Group CGU (Retail
CGU (£586.1 million;
2023: £586.1 million,
Vet Group CGU
(£373.3 million;
2023: £362.0
million)
Refer to page 49
(Audit Committee
Report), pages 111
and 112 (accounting
policy) and pages
129 to 130 (financial
disclosures).
Forecast based assessment:
Goodwill in both the Retail and
Vet Group CGUs is significant. The
estimated recoverable amount of
this balance is subjective due to
the inherent uncertainty involved
in forecasting and discounting
estimated future cash flows,
specifically the projected economic
growth, gross margin percentage
and discount rate, which forms the
basis of the value in use calculation.
Previously, only the carrying value
of Goodwill for the Vets Group CGU
was assessed as a key audit matter,
which principally reflected the risk
in the stretching targets set for
this business. However, the audit
work required over the carrying
value of goodwill is extensive due
to its reliance on forward looking
information which is inherently
uncertain. The Vet Group
continues to meet its budgets
which has reduced the impairment
risk of the Vet Group CGU. The risk
is considered to be in line with the
impairment risk of the Retail CGU.
Therefore, the key audit matter
relates to the carrying value of
goodwill for both the Vets Group
and Retail CGUs.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the nature of the balance is such that we would
expect to obtain audit evidence primarily through the detailed procedures
described.
Our procedures included:
– Re-performance:we re-performed the value in use calculations and
compareddata used in the model against source information, where
applicable.
– Historical comparison: we assessed the reasonableness of the CGUs’
budgets by considering the historical accuracy of previous forecasts;
– Benchmarking assumptions: we used our own internal discount rate
tools to assess the reasonableness of the discount rate by comparing the
Group’s assumptions to externally derived data;
– Our sector experience: we assessed whether key assumptions, such as
projected gross margin percentage, reflect our knowledge of the business
and industry, including known or probable changes in the business
environment and for consistency with industry analyst reports. We
assessed the appropriateness of the change in CGUs during the period;
– Sensitivity analysis: we performed a breakeven analysis on the
assumptions and ensured management have considered reasonable
possible changes to key assumptions and downside scenarios in their own
sensitivity analysis; and
– Assessing transparency: we assessed whether the disclosures about
the impairment testing appropriately reflect the risks inherent in the
recoverability of goodwill.
Our results
We found the Group’s conclusion that there is no impairment of goodwill
in the either the Retail CGU or Vet Group CGU’s to be acceptable. (2023:
conclusion for the Vet Group CGU goodwill was found to be acceptable).
Recoverability
of the Parent
Company’s
investment in its
subsidiary
£936.2 million;
(2023:£936.2 million)
Refer to page 49
(Audit Committee
Report), page 108
(accounting policy)
and page 157
(financial disclosures).
Low risk, high value:
The carrying amount of the Parent
Company’s investment in its only
direct subsidiary (Pets at Home No.
1 Limited) represents 58.7% (2023:
58.8%) of the parent Company’s
total assets. Its recoverability
is not at high risk of significant
misstatement or subject to
significant judgement. However,
due to its materiality in the context
of the parent Company financial
statements this is considered to
be the area that had the greatest
effect on our overall parent
Company audit.
We performed the tests below rather than seeking to rely on any of the Group’s
controls because the nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed procedures described.
Our procedures included:
– Tests of detail: we compared the value of the investment to the market
capitalisation as at the period end date and post period end;
– Comparing valuations: we compared the carrying amount of the
investments to the net asset value of the relevant subsidiary. For the
investments where the carrying amount exceeded the net asset value, we
compared to the VIU calculation prepared by management in relation to
the goodwill impairment, and assessed the accuracy of the key inputs into
the VIU calculations.
– Sensitivity analysis: we performed a breakeven analysis on the
assumptions used in the VIU calculation and ensured management
have considered reasonable possible changes to key assumptions and
downside scenarios in their own sensitivity analysis; and
Our results
We found the Company’s conclusion that there is no impairment of its
investment in its subsidiary to be acceptable (2023: acceptable).
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
We summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our
key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial
statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate
opinion on these matters.
Pets at Home Group Plc Annual Report and Accounts 2024
96
Independent Auditor’s Report continued
3. Our application of materiality and an overview of the
scope of our audit
Materiality for the Group financial statements as a whole was set at
£5.9m (2023: £6.8m), determined with reference to a benchmark of
Group profit before tax , normalised to exclude the non-underlying
items as disclosed in note 3, of £26.3m, of which it represents 4.3%
(2023: 5%).
Materiality for the parent Company financial statements as a whole
was set at £2.9m (2023: £3.4m), which is the component materiality
for the parent Company determined by the Group audit team. This is
lower than the materiality we would otherwise have determined with
reference to parent Company total assets, of which it represents 0.31%
(2023: 0.22%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the financial
statements as a whole.
Performance materiality was set at 75% (2023: 75%) of materiality for
the financial statements as a whole, which equates to £4.4m (2023:
£5.1m) for the Group and £2.2m (2023: £2.6m) for the parent Company.
We applied this percentage in our determination of performance
materiality because we did not identify any factors indicating an
elevated level of risk.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £0.3m (2023: £0.3m),
in addition to other identified misstatements that warranted reporting
on qualitative grounds.
Of the Group’s 8 (2023: 8) reporting components, we subjected 3 (2023:
3) to full scope audits for group purposes. The remaining 2% (2023: 3%)
of Group profit before tax is represented by 5 (2023: 5) of reporting
components, none of which individually represented more than 2%
(2023: 2%) of any of total Group revenue, Group profit before tax or total
Group assets. For the residual components, we performed analysis at an
aggregated Group level to re-examine our assessment that there were
no significant risks of material misstatement within these.
The components within the scope of our work accounted for the
percentages illustrated opposite.
The Group team performed procedures on the items excluded from
underlying Group profit before tax.
The Group team instructed component auditors as to the significant
areas to be covered, including the relevant risks detailed above and
the information to be reported back. The Group team approved the
component materialities, which ranged from £2.9m to £5.3m (2023:
£3.4m to £6.2m), having regard to the mix of size and risk profile of the
Group across the components.
The scope of the audit work performed was predominately substantive
as we placed limited reliance upon the Group’s internal control over
financial reporting.
The Group team visited 3 (2023: 3) component locations. Video and
telephone meetings were also held with component auditors.The
work on 1 of the 3 in scope components (2023: 1 of the 3 in scope
components) was performed by a component auditor and the
remaining, including the audit of the parent Company, was performed
by the Group team. The findings reported to the Group team were
discussed in more detail, and any further work required by the Group
team was then performed by the component auditor.
Normalised Group
profitbefore tax
£132.0m (2023: £136.4m)
Group
materiality
£5.9m (2023: £6.8m)
£5.9m
Whole financial statements
materiality (2023: £6.8m)
£5.3m
Range of materiality at
3 components (£2.9m
to £5.3m) (2023: £3.4m
to £6.2m)
£0.3m
Misstatements reported
to the audit committee
(2023: £0.3m)
£4.4m
Whole financial
statements performance
materiality (2023: £5.1m)
l Normalised PBT
l Group materiality
100%
(2023: 100%)
100%
(2023: 100%)
2
2
100
100
98
98
100
100
97
97
Group revenue
Group total assets
Group profit before tax
Normalised Group
profit before tax
l Full scope for Group audit purposes 2024
l Residual components 2024
l Full scope for Group audit purposes 2023
l Residual components 2023
98%
(2023: 97%)
98%
(2023: 97%)
3
3
97
Strategic Report Governance Financial Statements
4. The impact of climate change on our audit
In planning our audit, we have performed a risk assessment of the
potential impact of risks arising from climate change on the business
and the impact of the commitments made by the Group on the
financial statements. We held discussions with our own climate
change professionals to challenge our risk assessment.
Based upon this risk assessment, we concluded that climate risk has
no material effect on the financial statements due to the nature of the
Group’s current business operations and, in particular, the headroom
between the carrying value and recoverable amount of goodwill and
parent Company investment in subsidiaries.
There was no impact of climate change on our key audit matters
included in section 2.
We have read the disclosure of climate change in the front half of
the annual report and considered consistency with the financial
statements and our audit knowledge.
5. Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the
Company or to cease their operations, and as they have concluded
that the Group’s and the Company’s financial position means that
this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability
to continue as a going concern for at least a year from the date of
approval of the financial statements (‘the going concern period’).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business model
and analysed how those risks might affect the Group’s and Company’s
financial resources or ability to continue operations over the going
concern period. The risks that we considered most likely to adversely
affect the Group’s and Company’s available financial resources and/or
metrics relevant to debt covenants over this period were :
– The impact of inflation on the Group’s cost base.
– The impact on consumer demand as a result of macroeconomic
conditions.
We considered whether these risks could plausibly affect the
liquidity or covenant compliance in the going concern period by
comparing severe but plausible downside scenarios that could arise
from these risks individually and collectively against the level of
available financial resources and covenants indicated by the Group’s
financialforecasts.
Our procedures included:
– We critically assessed assumptions in base case and downside
scenarios relevant to liquidity and covenant metrics, in particular
in relation to revenue growth by comparing to published
economic forecasts and historical trends and overlaying
knowledge of the entity’ plans based on approved budgets and
our knowledge of the entity and the sector in which it operates;
– We assessed whether downside scenarios applied mutually
consistent and severe assumptions in aggregate, using our
assessment of the possible range of each key assumption and
ourknowledge of inter-dependencies;
– We compared past budgets to actual results to assess the
directors’ track record of budgeting accurately;
– We inspected the confirmation from the lender of the
level of committed financing, and the associated covenant
requirements; and
– We assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
– we consider that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is
appropriate;
– we have not identified, and concur with the directors’ assessment
that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant
doubt on the Group’s or Company’s ability to continue as a going
concern for the going concern period;
– we have nothing material to add or draw attention to in relation to
the directors’ statement in note 1.3 to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we
found the going concern disclosure in note 1.3 to be acceptable;
and
– the related statement under the Listing Rules set out on page 89
is materially consistent with the financial statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Group or the
Company will continue in operation.
6. Fraud and breaches of laws and regulations – ability to
detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (‘fraud risks’)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
– Enquiring of directors as to the Group’s high level policies and
procedures to prevent and detect fraud, as well as whether they
have knowledge of any actual, suspected or alleged fraud.
– Reading Board meeting minutes.
– Considering remuneration incentive schemes and performance
targets for directors and key management personnel.
– Using analytical procedures to identify any unusual or unexpected
relationships.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the audit.
This included communication from the Group audit team to the
component audit team of relevant fraud risks identified at the Group
level and request to the component audit team to report to the Group
audit team any instances of fraud that could give rise to a material
misstatement at the Group level.
As required by auditing standards, and taking into account possible
pressures to meet profit targets, we perform procedures to address
the risk of management override of controls, in particular the risk
that Group and component management may be in a position to
make inappropriate accounting entries. On this audit we do not
believe there is a fraud risk related to revenue recognition due to
the simplistic nature of revenue transactions, and the absence of
judgement in revenue recognition.
Pets at Home Group Plc Annual Report and Accounts 2024
98
Independent Auditor’s Report continued
6. Fraud and breaches of laws and regulations – ability to
detect continued
We did not identify any additional fraud risks.
We performed procedures including:
– Identifying journal entries to test for all full scope components based
on risk criteria and comparing the identified entries to supporting
documentation. These included those posted by senior finance
management and other unexpected users, postings to overrider
accounts close to the period end and journal entries posted to
unexpected account combinations including revenue or cash.
– Assessing whether the judgements made in making accounting
estimates are indicative of a potential bias.
We discussed with the audit committee matters related to actual or
suspected fraud, for which disclosure is not necessary, and considered
implications for our audit.
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements
from our general commercial and sector experience, and through
discussion with the directors and other management (as required
by auditing standards), and discussed with the directors and other
management the policies and procedures regarding compliance with
laws and regulations.
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non- compliance
throughout the audit. This included communication from the
Group audit team to the component audit team of relevant laws
and regulations identified at the Group level, and a request for
the component audit team to report to the Group audit team any
instances of non-compliance with laws and regulations that could give
rise to a material misstatement at the Group level.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including financial reporting legislation
(including related companies legislation), distributable profits
legislation and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our procedures
on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation. We identified
the following areas as those most likely to have such an effect: sale
of goods and consumer rights legislation, animal welfare legislation,
health and safety, data protection laws, anti-bribery, employment
law, regulatory capital and liquidity, and certain aspects of Company
legislation recognising the nature of the Group’s activities. Auditing
standards limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of the directors
and other management and inspection of regulatory and legal
correspondence, if any.
Therefore if a breach of operational regulations is not disclosed to
us or evident from relevant correspondence, an audit will not detect
thatbreach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements
in the financial statements, even though we have properly planned
and performed our audit in accordance with auditing standards.
For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls.
Our audit procedures are designed to detect material misstatement.
We are not responsible for preventing non-compliance or fraud
and cannot be expected to detect non-compliance with all laws
and regulations.
7. We have nothing to report on the other information in
theAnnual Report
The directors are responsible for the other information presented in
the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that
work we have not identified material misstatements in the other
information.
Strategic report and directors’ report
Based solely on our work on the other information:
– we have not identified material misstatements in the strategic
report and the directors’ report;
– in our opinion the information given in those reports for the
financial period is consistent with the financial statements; and
– in our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term
viability
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
– the directors’ confirmation within the Viability Statement on
page 90 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those
that would threaten its business model, future performance,
solvency and liquidity;
– the Emerging Risks disclosures describing these risks and how
emerging risks are identified, and explaining how they are being
managed and mitigated; and
99
Strategic Report Governance Financial Statements
– the directors’ explanation in the Viability Statement of how they
have assessed the prospects of the Group, over what period
they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on page
90 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with
the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our financial statements audit. As
we cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee as to the
Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and our
audit knowledge:
– the directors’ statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
– the section of the annual report describing the work of the
Audit Committee, including the significant issues that the audit
committee considered in relation to the financial statements,
and how these issues were addressed; and
– the section of the annual report that describes the review
of the effectiveness of the Group’s risk management and
internal control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the Listing Rules for
our review. We have nothing to report in this respect.
8. We have nothing to report on the other matters on which
we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in
our opinion:
– adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
– the parent Company financial statements and the part of the
Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
– certain disclosures of directors’ remuneration specified by law are
not made; or
– we have not received all the information and explanations we
require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 92,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the Group and
parent Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern; and using the going
concern basis of accounting unless they either intend to liquidate
the Group or the parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but
does not guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in
an annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no
assurance over whether the annual financial report has been prepared
in accordance with those requirements.
10. The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.
Antony Whittle (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peters Square
Manchester
M2 3AE
28 May 2024
Pets at Home Group Plc Annual Report and Accounts 2024
100
Consolidated Income Statement
for the 52 week period ended 28 March 2024
52 week period ended 28 March 2024 | 52 week period ended 30 March 2023 (restated) | ||||||
| Non- | Non- | ||||||
| Underlying | underlying | Underlying | underlying | ||||
| trading | items (note 3) | Total | trading | items (note 3) | Total | ||
| Note | £m | £m | £m | £m | £m | £m | |
Revenue | 2 | ||||||
| Cost of sales | ( | ( | ( | ( | |||
Gross profit | |||||||
Selling and distribution expenses | ( | ( | ( | ( | ( | ( | |
Administrative expenses | 3 | ( | ( | ( | ( | ( | ( |
Other income | 3 | ||||||
Operating profit | 2,3 | ( | ( | ||||
Financial income | 6 | ||||||
Financial expense | 7 | ( | ( | ( | ( | ( | ( |
Net financing expense | ( | ( | ( | ( | ( | ( | |
Profit before tax | ( | ( | |||||
Taxation | 8 | ( | ( | ( | ( | ||
Profit for the period | ( | ( |
1
2
1
See note 1.1 and note 1.27 for an explanation of the prior year restatements.
2
Impairment gains on receivables of £1 .0 m (52 weeks to 30 March 2023 £2 .0 m) are reported within cost of sales.
Basic and diluted earnings per share attributable to equity shareholders of the Company:
| 52 week | 52 week | ||
| period ended | period ended | ||
| 28 March | 30 March | ||
| Note | 2024 | 2023 | |
Equity holders of the parent – basic | 5 | ||
Equity holders of the parent – diluted | 5 |
Dividends paid and proposed are disclosed in note 9.
The notes on pages 107 to 167 form an integral part of these financial statements.
Consolidated Statement of Comprehensive Income
for the 52 week period ended 28 March 2024
| 52 week | 52 week | ||
| period ended | period ended | ||
| 28 March | 30 March | ||
| 2024 | 2023 | ||
| Note | £m | £m | |
Profit for the period | |||
| Other comprehensive income | |||
| Items that are or may be recycled subsequently into profit or loss: | |||
Foreign exchange translation differences | 22 | ( | |
Effective portion of changes in fair value of cash flow hedges | 22 | ( | |
Net change in fair value of cash flow hedges reclassified to profit or loss | 22 | ||
Other comprehensive income for the period, before income tax | ( | ||
Income tax on other comprehensive income | 15,22 | ( | |
Other comprehensive income for the period, net of income tax | ( | ||
Total comprehensive income for the period |
The notes on pages 107 to 167 form an integral part of these financial statements.
101
Strategic Report Governance Financial Statements
Consolidated Balance Sheet
at 28 March 2024
| At 28 March | At 30 March | ||
| 2024 | 2023 | ||
| Note | £m | £m | |
| Non-current assets | |||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
Intangible assets | 13 | ||
Deferred tax asset | 15 | ||
Other non-current assets | 16 | ||
| Current assets | |||
Inventories | 14 | ||
Other financial assets | 16 | ||
Trade and other receivables | 17 | ||
Cash and cash equivalents | 18 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 20 | ( | ( |
Income tax payable | ( | ( | |
Other interest-bearing loans and borrowings | 19 | ( | ( |
Lease liabilities | 12 | ( | ( |
Provisions | 21 | ( | ( |
Other financial liabilities | 16 | ( | ( |
( | ( | ||
| Non-current liabilities | |||
Other interest-bearing loans and borrowings | 19 | ( | ( |
Lease liabilities | 12 | ( | ( |
Provisions | 21 | ( | ( |
Deferred tax liabilities | 15 | ( | |
Other financial liabilities | 16 | ( | |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| Equity attributable to equity holders of the parent | |||
Ordinary share capital | 22 | ||
Consolidation reserve | ( | ( | |
Merger reserve | |||
Translation reserve | ( | ( | |
Capital redemption reserve | |||
Cash flow hedging reserve | ( | ( | |
Retained earnings | |||
Total equity |
Company number: 08885072
The notes on pages 107 to 167 form an integral part of these financial statements.
Pets at Home Group Plc Annual Report and Accounts 2024
102
| Cash flow | Capital | |||||||
| Consolidation | Merger | hedging | Translation | redemption | Retained | |||
| Share capital | reserve | reserve | reserve | reserve | reserve | earnings | Total equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 30 March 2023 | ( | ( | ( | |||||
Total comprehensive income for the period | ||||||||
Profit for the period | ||||||||
| Other comprehensive income | ||||||||
(note 22) | ||||||||
Total comprehensive income for the period | ||||||||
| Hedging gains and losses | ||||||||
reclassified to inventory | ( | ( | ||||||
Total hedging gains and losses reclassified to inventory | ( | ( | ||||||
Transactions with owners, recorded directly in equity | ||||||||
Equity dividends paid | ( | ( | ||||||
Share-based payment charge | ||||||||
Deferred tax movement on IFRS2 reserve | ( | ( | ||||||
Share buyback | ( | ( | ( | |||||
Purchase of own shares | ( | ( | ||||||
Total contributions by and distributions to owners | ( | ( | ( | |||||
Balance at 28 March 2024 | ( | ( | ( |
Consolidated Statement of Changes in Equity
as at 30 March 2023
| Cash flow | Capital | |||||||
| Consolidation | Merger | hedging | Translation | redemption | Retained | |||
| Share capital | reserve | reserve | reserve | reserve | reserve | earnings | Total equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at 31 March 2022 | ( | |||||||
Total comprehensive income for the period | ||||||||
Profit for the period | ||||||||
| Other comprehensive income | ||||||||
(note 22) | ( | ( | ( | |||||
Total comprehensive income for the period | ( | ( | ||||||
| Hedging gains and losses | ||||||||
reclassified to inventory | ||||||||
Total hedging gains and losses reclassified to inventory | ||||||||
Transactions with owners, recorded directly in equity | – | – | ||||||
Equity dividends paid | ( | ( | ||||||
Share-based payment charge | ||||||||
Deferred tax movement on IFRS2 reserve | ( | ( | ||||||
Share buyback | ( | ( | ( | |||||
Purchase of own shares | ( | ( | ||||||
Total contributions by and distributions to owners | ( | ( | ( | |||||
Balance at 30 March 2023 | ( | ( | ( |
Consolidated Statement of Changes in Equity
as at 28 March 2024
103
Strategic Report Governance Financial Statements
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Cash flows from operating activities | ||
Profit for the period | ||
| Adjustments for: | ||
Depreciation and amortisation | ||
Financial income | ( | ( |
Financial expense | ||
Share-based payment charges | ||
Taxation | ||
(Increase)/Decrease in trade and other receivables | ( | |
Decrease/(Increase) in inventories | ( | |
(Decrease)/Increase in trade and other payables | ( | |
(Decrease)/Increase in provisions | ( | |
Movement in working capital | ( | |
Tax paid | ( | ( |
Net cash flow from operating activities | ||
| Cash flows from investing activities | ||
Investments | ( | |
Proceeds from repayment of initial loans | ||
Interest received | ||
Costs to acquire right-of-use assets | ( | ( |
Acquisition of subsidiaries, net of cash acquired | ( | ( |
Disposal of subsidiaries, net of cash disposed | ( | |
Acquisition of property, plant and equipment and other intangible assets | ( | ( |
Net cash generated from in investing activities | ( | ( |
| Cash flows from financing activities | ||
Equity dividends paid | ( | ( |
Proceeds from new loan | ||
Repayment of borrowings | ( | ( |
Debt issue costs | ( | ( |
Cash receipts from lease incentives | ||
Cash payments for the principal portion of the right-of-use lease liability | ( | ( |
Purchase of own shares | ( | ( |
Share buyback | ( | ( |
Interest paid | ( | ( |
Interest paid on lease obligations | ( | ( |
Net cash used in financing activities | ( | ( |
Net (decrease)/increase in cash and cash equivalents | ( | |
Cash and cash equivalents at beginning of period | ||
Cash and cash equivalents at end of period |
The notes on pages 107 to 167 form an integral part of these financial statements.
Consolidated Statement of Cash Flows
for the 52 week period ended 28 March 2024
Pets at Home Group Plc Annual Report and Accounts 2024
104
Note
At 28 March
2024
£m
At 30 March
2023
£m
Non-current assets
Investments in subsidiaries 28 936.2 936.2
Deferred tax asset 15 0.9 2.8
Trade and other receivables 17 663.3 578.4
1,600.4 1,517.4
Current assets
Other financial assets 16 – 2.0
Cash and cash equivalents 18 – 0.4
– 2.4
Total assets 1,600.4 1,519.8
Current liabilities
Trade and other payables 20 (816.3) (618.0)
(816.3) (618.0)
Non-current liabilities
Other interest-bearing loans and borrowings 19 (22.2) (97.3)
Other financial liabilities 16 – (0.4)
(22.2) (97.7)
Total liabilities (838.5) (715.7)
Net assets 761.9 804.1
Equity attributable to equity holders of the parent
Ordinary share capital 22 4.7 4.8
Merger reserve 113.3 113.3
Capital redemption reserve 0.3 0.2
Cash flow hedging reserve – 1.2
Retained earnings 643.6 684.6
Total equity 761.9 804.1
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 profit for the 52 week period ended 28 March 2024 was £75.9m (profit for the 52 week period ended 30 March 2023 was £33.4m).
On behalf of the Board:
Mike Iddon
Chief Financial Officer
28 May 2024
Company number: 08885072
The notes on pages 107 to 167 form an integral part of these financial statements.
Company Balance Sheet
at 28 March 2024
105
Strategic Report Governance Financial Statements
Share capital
£m
Merger
reserve
£m
Cash flow
hedging
reserve
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total equity
£m
Balance at 30 March 2023 4.8 113.3 1.2 0.2 684.6 804.1
Total comprehensive income for the period
Profit for the period – – – – 75.9 75.9
Other comprehensive income – – (1.2) – – (1.2)
Total comprehensive income for the period – – (1.2) – 75.9 74.7
Transactions with owners, recorded directly in equity
Equity dividends paid – – – – (60.7) (60.7)
Share-based payment charge – – – – 5.9 5.9
Deferred tax movement on IFRS2 reserve – – – – (1.0) (1.0)
Share buyback (0.1) – – 0.1 (50.3) (50.3)
Purchase of own shares – – – – (10.8) (10.8)
Total contributions by and distributions to owners (0.1) – – 0.1 (116.9) (116.9)
Balance at 28 March 2024 4.7 113.3 – 0.3 643.6 761.9
Company Statement of Changes in Equity
as at 30 March 2023
Share capital
£m
Merger
reserve
£m
Cash flow
hedging
reserve
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total equity
£m
Balance at 31 March 2022 5.0 113.3 1.3 – 771.4 891.0
Total comprehensive income for the period
Profit for the period – – – – 33.4 33.4
Other comprehensive income – – (0.1) – – (0.1)
Total comprehensive income for the period – – (0.1) – 33.4 33.3
Transactions with owners, recorded directly in equity
Equity dividends paid – – – – (58.7) (58.7)
Share-based payment charge – – – – 4.9 4.9
Deferred tax movement on IFRS2 reserve – – – – (2.0) (2.0)
Share buyback (0.2) – – 0.2 (50.3) (50.3)
Purchase of own shares – – – – (14.1) (14.1)
Total contributions by and distributions to owners (0.2) – – 0.2 (120.2) (120.2)
Balance at 30 March 2023 4.8 113.3 1.2 0.2 684.6 804.1
Company Statement of Changes in Equity
as at 28 March 2024
Pets at Home Group Plc Annual Report and Accounts 2024
106
52 week
period ended
28 March
2024
£m
52 week
period ended
30 March
2023
£m
Cash flows from operating activities
Profit for the period 75.9 33.4
Adjustments for:
Financial expense 1.2 1.5
Share-based payment charges 5.9 4.9
Taxation (2.3) (3.0)
80.7 36.8
Increase in trade and other payables 208.8 62.8
Tax (paid)/received (6.0) 3.5
Net cash flow from operating activities 283.5 103.1
Cash flows from investing activities
(Increase)/Decrease in amounts owed by group undertakings (85.0) 21.9
Net cash generated from investing activities (85.0) 21.9
Cash flows from financing activities
Equity dividends paid (60.7) (58.7)
Proceeds from new loan – 100.0
Repayment of borrowings (75.0) (100.0)
Debt issue costs (0.9) –
Share buyback (50.3) (50.3)
Interest paid (1.2) (1.5)
Purchase of own shares (10.8) (14.1)
Net cash used in financing activities (198.9) (124.6)
Net (decrease)/increase in cash and cash equivalents (0.4) 0.4
Cash and cash equivalents at beginning of period 0.4 –
Cash and cash equivalents at end of period – 0.4
Company Statement of Cash Flows
for the 52 week period ended 28 March 2024
107
Strategic Report Governance 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
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.
Notes (forming part of the financial statements)
Pets at Home Group Plc Annual Report and Accounts 2024
108
1 Significant accounting policies continued
1.3 Going concern continued
Notes (forming part of the financial statements) continued
109
Strategic Report Governance Financial Statements
Pets at Home Group Plc Annual Report and Accounts 2024
110
1 Significant accounting policies continued
Notes (forming part of the financial statements) continued
111
Strategic Report Governance Financial Statements
Pets at Home Group Plc Annual Report and Accounts 2024
112
1 Significant accounting policies continued
1.16 Impairment excluding inventories and deferred tax assets continued
Financial assets (including receivables) continued
Measurement of Expected Credit Losses (‘ECLs’) and definition of default continued
Notes (forming part of the financial statements) continued
113
Strategic Report Governance Financial Statements
Pets at Home Group Plc Annual Report and Accounts 2024
114
1 Significant accounting policies continued
1.19 Revenue and cost of sales continued
Notes (forming part of the financial statements) continued
115
Strategic Report Governance Financial Statements
Pets at Home Group Plc Annual Report and Accounts 2024
116
| 52 week period ended 28 March 2024 | ||||
| Retail | Vet Group | Central | Total | |
| Income statement | £m | £m | £m | £m |
Revenue | 1,330.1 | 146.5 | – | 1,476.6 |
Underlying gross profit | 614.1 | 77.2 | – | 691.3 |
Underlying operating profit/(loss) | 100.4 | 60.9 | (15.8) | 145.5 |
Non-underlying items | (22.5) | (2.8) | (0.9) | (26.2) |
Segment operating profit | 77.9 | 58.1 | (16.7) | 119.3 |
Underlying net financing expense | (13.0) | 0.7 | (1.2) | (13.5) |
Non-underlying financing expense | (0.1) | – | – | (0.1) |
Profit before tax | 64.8 | 58.8 | (17.9) | 105.7 |
Total non-underlying items | 22.6 | 2.8 | 0.9 | 26.3 |
Underlying profit/(loss) before tax | 87. 4 | 61.6 | (17.0) | 132.0 |
| 52 week period ended 30 March 2023 (restated) | ||||
| Retail | Vet Group | Central | Total | |
| Income statement | £m | £m | £m | £m |
Revenue | 1,278.7 | 125.5 | – | 1,404.2 |
Underlying gross profit | 607.8 | 66.8 | – | 674.6 |
Underlying operating profit/(loss) | 109.9 | 52.1 | (12.3) | 149.7 |
Non-underlying items | (10.1) | – | (2.8) | (12.9) |
Segment operating profit | 99.8 | 52.1 | (15.1) | 136.8 |
Underlying net financing expense | (11.1) | (0.8) | (1.4) | (13.3) |
Non-underlying financing expense | (1.0) | – | – | (1.0) |
Profit before tax | 87.7 | 51.3 | (16.5) | 122.5 |
Total non-underlying items | 11.1 | – | 2.8 | 13.9 |
Underlying profit/(loss) before tax | 98.8 | 51.3 | (13.7) | 136.4 |
Notes (forming part of the financial statements) continued
117
Strategic Report Governance Financial Statements
| 52 week period ended 28 March 2024 | |||
| Retail | Vet Group | Total | |
| Segmental revenue analysis by revenue stream | £m | £m | £m |
Retail – Food | 814.2 | – | 814.2 |
Retail – Accessories | 465.5 | – | 465.5 |
Retail – Services | 50.4 | – | 50.4 |
Vet Group – Joint Venture fee income | – | 89.3 | 89.3 |
Vet Group – Company managed practices | – | 44.6 | 44.6 |
Vet Group – Other income | – | 9.5 | 9.5 |
Vet Group – Veterinary telehealth services | – | 3.1 | 3.1 |
Total | 1,330.1 | 146.5 | 1,476.6 |
| 52 week period ended 30 March 2023 (restated) | |||
| Retail | Vet Group | Total | |
| Segmental revenue analysis by revenue stream | £m | £m | £m |
Retail – Food | 744.8 | – | 744.8 |
Retail – Accessories | 486.4 | – | 486.4 |
Retail – Services | 47.5 | – | 47.5 |
Vet Group – Joint Venture fee income | – | 77.2 | 77.2 |
Vet Group – Company managed practices | – | 37.5 | 37.5 |
Vet Group – Other income | – | 8.1 | 8.1 |
Vet Group – Veterinary telehealth services | – | 2.7 | 2.7 |
Total | 1,278.7 | 125.5 | 1,404.2 |
Pets at Home Group Plc Annual Report and Accounts 2024
118
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Non-underlying items | ||
| Costs relating to the implementation of the new Distribution Centre | ||
Provisions for voluntary redundancies for colleagues at existing Distribution Centres | 0.8 | 2.1 |
Provisions for retention and relocation bonuses for colleagues at existing Distribution Centres | 2.4 | 1.8 |
Pre-opening costs for new Distribution Centre | – | 4.0 |
Dual running costs of operating new and existing Distribution Centres | 4.5 | 0.4 |
Project management costs of opening new Distribution Centre | 1.8 | 0.7 |
Depreciation of property plant and equipment at legacy sites | 3.4 | 0.4 |
Depreciation of right-of-use assets (dual running costs) | 3.1 | 0.7 |
Transitional costs of opening a new Distribution Centre | 5.4 | – |
21.4 | 10.1 | |
| Group restructure costs | ||
Group restructure costs | 1.4 | 2.7 |
Depreciation of property plant and equipment (Group restructure costs) | 0.8 | – |
Depreciation of right-of-use assets (Group restructure costs) | 0.6 | – |
Legal settlement costs | 0.9 | – |
3.7 | 2.7 | |
| Other non-underlying items | ||
Impairment of investment | 1.1 | – |
Aborted transaction costs | – | 0.1 |
1.1 | 0.1 | |
Total non-underlying items within operating profit | 26.2 | 12.9 |
Interest expense on the lease liabilities of the Distribution Centres | 0.1 | 1.0 |
Total non-underlying items | 26.3 | 13.9 |
| Underlying items | ||
Impairment gains on receivables | (1.0) | (2.0) |
Software as a service (SaaS) expense | 27.9 | 29.9 |
Depreciation of property, plant and equipment | 26.5 | 25.7 |
Amortisation of intangible assets | 10.1 | 9.8 |
Depreciation of right-of-use assets | 65.1 | 66.8 |
| Rentals under operating leases: | ||
Expenses relating to short-term or low value leases | – | 0.1 |
| Other income | ||
Rental income from sub-leasing right-of-use assets to third parties | (0.2) | (0.3) |
| Rental and other occupancy income from related parties | (12.7) | (12.2) |
Share-based payment charges | 5.9 | 4.9 |
Notes (forming part of the financial statements) continued
119
Strategic Report Governance Financial Statements
Non-underlying items in operating profit continued
New Distribution Centre and closure of Legacy sites continued
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Audit of the parent company financial statements | – | – |
| Amounts receivable by the Company’s auditor and its associates in respect of: | ||
Audit of financial statements of subsidiaries pursuant to legislation | 1.3 | 1.3 |
Review of interim financial statements | 0.1 | 0.1 |
Other assurance services | – | – |
1.4 | 1.4 |
Pets at Home Group Plc Annual Report and Accounts 2024
120
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 ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| Number | Number | |
Sales and distribution – FTE | 7,297 | 7,063 |
Administration – FTE | 1,072 | 960 |
8,369 | 8,023 | |
Sales and distribution – total | 10,924 | 10,371 |
Administration – total | 1,107 | 1,006 |
12,031 | 11,377 |
The aggregate payroll costs of these persons were as follows:
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Wages and salaries | 282.9 | 261.9 |
Social security costs | 24.8 | 23.0 |
Contributions to defined contribution pension plans | 10.0 | 8.6 |
317.7 | 293.5 |
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Executive Directors’ remuneration paid in respect of qualifying services | 2.3 | 2.9 |
Non-Executive Directors’ remuneration paid in respect of qualifying services | 0.6 | 0.6 |
Executive Directors’ amount of gains on the exercise of share options | 0.7 | 1.3 |
Executive Directors’ pension contributions | 0.1 | 0.1 |
Total Directors’ remuneration | 3.7 | 4.9 |
Executive Management Team remuneration paid in respect of qualifying services | 6.5 | 7.1 |
Executive Management Team amounts of gains on the exercise of share options | 2.6 | 2.7 |
Executive Management Team pension contributions | 0.2 | 0.2 |
Total Executive Management Team remuneration | 9.3 | 10.0 |
Notes (forming part of the financial statements) continued
121
Strategic Report Governance Financial Statements
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 | |||
| 28 March 2024 | 30 March 2023 | |||
| After non- | After non- | |||
| Underlying | underlying | Underlying | underlying | |
| trading | items | trading | items | |
Profit attributable to equity shareholders of the parent (£m) | 98.9 | 79.2 | 112.0 | 100.7 |
Basic weighted average number of shares | 477.7 | 477.7 | 491.9 | 491.9 |
Dilutive potential ordinary shares | 5.0 | 5.0 | 6.5 | 6.5 |
Diluted weighted average number of shares | 482.7 | 482.7 | 498.4 | 498.4 |
Basic earnings per share | 20.7p | 16.6p | 22.8p | 20.5p |
Diluted earnings per share | 20.5p | 16.4p | 22.5p | 20.2p |
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Interest receivable on loans to Joint Venture veterinary practices | 0.5 | 0.4 |
Other interest receivable | 3.5 | 2.3 |
Total finance income | 4.0 | 2.7 |
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Bank loans at effective interest rate | 4.3 | 4.6 |
Underlying interest expense on lease liability | 13.2 | 11.4 |
Non-underlying interest expense on lease liability | 0.1 | 1.0 |
Total finance expense | 17.6 | 17.0 |
Pets at Home Group Plc Annual Report and Accounts 2024
122
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Current tax expense | ||
Current period | 22.7 | 24.2 |
Adjustments in respect of prior periods | (1.4) | (0.9) |
Current tax expense | 21.3 | 23.3 |
| Deferred tax expense | ||
Origination and reversal of temporary differences | 6.9 | (0.6) |
Impact of difference between deferred and current tax rates | – | (0.1) |
Adjustments in respect of prior periods | (1.7) | (0.8) |
Deferred tax expense | 5.2 | (1.5) |
Total tax expense | 26.5 | 21.8 |
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Effective portion of changes in fair value of cash flow hedges (note 22) | (0.3) | (1.3) |
52 week period ended 28 March 2024 | 52 week period ended 30 March 2023 | |||||
| Non- | Non- | |||||
| Underlying | underlying | Underlying | underlying | |||
| trading | items | Total | trading | items | Total | |
| £m | £m | £m | £m | £m | £m | |
Profit for the period | 98.9 | (19.7) | 79.2 | 112.0 | (11.3) | 100.7 |
Total tax expense/(credit) | 33.1 | (6.6) | 26.5 | 24.4 | (2.6) | 21.8 |
Profit excluding taxation | 132.0 | (26.3) | 105.7 | 136.4 | (13.9) | 122.5 |
| Tax using the UK corporation tax rate for the period of 25% | ||||||
(52 week period ended 30 March 2023: 19%) | 33.0 | (6.6) | 26.4 | 25.9 | (2.6) | 23.3 |
Impact of difference between deferred and current tax rates | – | – | – | (0.1) | – | (0.1) |
Depreciation on expenditure not eligible for tax relief | 1.1 | – | 1.1 | 0.8 | – | 0.8 |
Capital allowances super-deduction | – | – | – | (1.7) | – | (1.7) |
Expenditure not eligible for tax relief | 2.1 | – | 2.1 | 1.1 | – | 1.1 |
Adjustments in respect of prior periods | (3.1) | – | (3.1) | (1.6) | – | (1.6) |
Total tax expense | 33.1 | (6.6) | 26.5 | 24.4 | (2.6) | 21.8 |
Notes (forming part of the financial statements) continued
123
Strategic Report Governance Financial Statements
9 Dividends paid and proposed
| Group and Company | ||
| 52 week | 52 week | |
| period ended | period ended | |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Declared and paid during the period | ||
Final dividend of 8.3p per share (2022: 7.5p per share) | 39.5 | 37.0 |
Interim dividend of 4.5p per share (2023: 4.5p per share) | 21.2 | 21.7 |
| Proposed for approval by shareholders at the AGM | ||
Final dividend of | 38.8 | 40.1 |
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 28 March 2024 and 30 March 2023 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 28 March 2024: 5,564,701 shares; holding at 30 March 2023: 5,323,525 shares).
10 Business combinations
In the 52 week period ended 28 March 2024, the Group has acquired 100% of the ‘A’ shares of eight veterinary practices and 75% of the ‘A’
shares of one veterinary practice, 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 all or the majority 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 28 March 2024, £1.6m of operating loans relating to these practices were written off in advance of the acquisitions
(see note 17).
Up to the date of acquisition and in the comparative period being the 52 week period ending 30 March 2023, 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 in the 52 week period ended 28 March 2024
| Total | |||||
| proportion of | |||||
| voting equity | |||||
| Proportion of | instruments | Cash | |||
| voting equity | owned | consideration | |||
| Date of | instruments | following the | transferred | ||
| Principal activity | acquisition | acquired | acquisition | £m | |
Leigh Vets4Pets Limited | Veterinary practice | 22/06/2023 | 50% | 100% | – |
Companion Care (Telford)Limited | Veterinary practice | 07/07/2023 | 50% | 100% | 0.2 |
Companion Care (Farnham) Limited | Veterinary practice | 10/11/2023 | 50% | 100% | 0.1 |
Wakefield Vets4Pets Limited | Veterinary practice | 22/12/2023 | 50% | 100% | 0.2 |
Tilehurst Vets4Pets Limited | Veterinary practice | 08/01/2024 | 50% | 100% | 0.1 |
Companion Care (Salisbury) Limited | Veterinary practice | 24/01/2024 | 50% | 100% | 0.2 |
Companion Care (Kings Lynn) Limited | Veterinary practice | 13/02/2024 | 50% | 100% | 0.1 |
Larne Vets4Pets Limited | Veterinary practice | 14/03/2024 | 50% | 100% | 0.1 |
Gamston Vets4Pets Limited | Veterinary practice | 29/02/2024 | 50% | 75% | – |
Pets at Home Group Plc Annual Report and Accounts 2024
124
10 Business combinations continued
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. On acquisition, assets and liabilities are revalued to
fair value. Pre existing relationships between the Group and acquired Joint Venture practice are not considered part of the business combination
and have been removed from the fair values of assets and liabilities recognised on acquisition.
| Fair value of | |
| assets and | |
| liabilities | |
| acquired | |
| £m | |
| Current assets | |
Trade and other receivables | 0.2 |
Inventories | 0.1 |
| Non-current assets | |
Tangible fixed assets | 0.4 |
| Current liabilities | |
Bank loans | (0.2) |
Trade and other payables | (0.5) |
Net assets/(liabilities) | – |
| £m | |
Consideration | 1.0 |
Less: Fair value of assets acquired | – |
Goodwill arising on acquisition | 1.0 |
Impairment of goodwill | – |
Carrying value of goodwill | 1.0 |
| Total | |||||
| proportion of | |||||
| voting equity | |||||
| Proportion of | instruments | Cash | |||
| voting equity | owned | consideration | |||
| Date of | instruments | following the | transferred | ||
| Principal activity | acquisition | acquired | acquisition | £m | |
Accrington Vets4Pets Limited | Veterinary practice | 16/06/2022 | 50% | 100% | – |
Companion Care (Banbury) Limited | Veterinary practice | 24/06/2022 | 50% | 100% | – |
Companion Care (Chippenham) Limited | Veterinary practice | 28/06/2022 | 50% | 100% | – |
Bangor Wales Vets4Pets Limited | Veterinary practice | 19/10/2022 | 50% | 100% | – |
Newtownards Vets4Pets Limited | Veterinary practice | 24/11/2022 | 50% | 100% | – |
Companion Care (Llantrisant) Limited | Veterinary practice | 07/03/2023 | 50% | 100% | 0.5 |
Notes (forming part of the financial statements) continued
125
Strategic Report Governance Financial Statements
| Book value | Fair value of | ||
| of assets and | assets and | ||
| liabilities | Adjustments | liabilities | |
| acquired | on acquisition | acquired | |
| £m | £m | £m | |
| Current assets | |||
Cash and cash equivalents | 0.1 | – | 0.1 |
Trade and other receivables | 0.1 | – | 0.1 |
Inventories | 0.1 | – | 0.1 |
| Non-current assets | |||
Tangible fixed assets | 0.3 | – | 0.3 |
Intangible assets | 0.1 | 0.3 | 0.4 |
| Non-current liabilities | |||
Lease liabilities | – | – | – |
| Current liabilities | |||
Bank loans | (0.2) | – | (0.2) |
Overdrafts | (0.2) | – | (0.2) |
Partner loans | (0.4) | 0.4 | – |
Trade and other payables | (2.4) | 2.1 | (0.3) |
Net (liabilities)/assets | (2.5) | 2.8 | 0.3 |
| £m | |
Consideration | 0.5 |
Less: Fair value of assets acquired | (0.3) |
Goodwill arising on acquisition | 0.2 |
Impairment of goodwill | – |
Carrying value of goodwill | 0.2 |
Pets at Home Group Plc Annual Report and Accounts 2024
126
| Fixtures, | |||||
| fittings, | |||||
| Freehold | Leasehold | tools and | Assets under | ||
| property | improvements | equipment | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 30 March 2023 | 2.4 | 78.0 | 296.4 | 28.5 | 405.3 |
Additions | – | 5.9 | 30.9 | – | 36.8 |
On acquisition (note 10) | – | 0.4 | – | – | 0.4 |
| Transfers | – | – | – | 5.7 | 5.7 |
Brought into use | – | (0.1) | 19.9 | (19.8) | – |
Disposals | – | (1.7) | (1.8) | – | (3.5) |
Balance at 28 March 2024 | 2.4 | 82.5 | 345.4 | 14.4 | 444.7 |
| Depreciation | |||||
Balance at 30 March 2023 | 0.4 | 36.7 | 221.3 | – | 258.4 |
Depreciation charge for the period | – | 5.9 | 24.8 | – | 30.7 |
Disposals | – | (1.1) | (1.4) | – | (2.5) |
Balance at 28 March 2024 | 0.4 | 41.5 | 244.7 | – | 286.6 |
| Net book value | |||||
At 30 March 2023 | 2.0 | 41.3 | 75.1 | 28.5 | 146.9 |
At 28 March 2024 | 2.0 | 41.0 | 100.7 | 14.4 | 158.1 |
| Fixtures, | |||||
| fittings, | |||||
| Freehold | Leasehold | tools and | Assets under | ||
| property | improvements | equipment | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 31 March 2022 | 2.4 | 65.7 | 261.6 | 12.7 | 342.4 |
Additions | – | 11.7 | 34.5 | 19.1 | 65.3 |
On acquisition (note 10) | – | 0.2 | 0.1 | – | 0.3 |
Brought into use | – | 0.8 | 0.8 | (1.6) | – |
Transfers | – | – | – | (1.7) | (1.7) |
Disposals | – | (0.4) | (0.6) | – | (1.0) |
Balance at 30 March 2023 | 2.4 | 78.0 | 296.4 | 28.5 | 405.3 |
| Depreciation | |||||
Balance at 31 March 2022 | 0.4 | 32.9 | 200.2 | – | 233.5 |
Depreciation charge for the period | – | 4.4 | 21.7 | – | 26.1 |
Disposals | – | (0.6) | (0.6) | – | (1.2) |
Balance at 30 March 2023 | 0.4 | 36.7 | 221.3 | – | 258.4 |
| Net book value | |||||
At 31 March 2022 | 2.0 | 32.8 | 61.4 | 12.7 | 108.9 |
At 30 March 2023 | 2.0 | 41.3 | 75.1 | 28.5 | 146.9 |
Notes (forming part of the financial statements) continued
127
Strategic Report Governance Financial Statements
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.
| Property | Equipment | Total | |
| £m | £m | £m | |
| Cost | |||
Balance at 30 March 2023 | 614.8 | 20.3 | 635.1 |
Additions | 27.2 | 2.6 | 29.8 |
Disposals | (1.5) | (0.7) | (2.2) |
Balance at 28 March 2024 | 640.5 | 22.2 | 662.7 |
| Depreciation | |||
Balance at 30 March 2023 | 263.5 | 12.0 | 275.5 |
Depreciation charge for the period | 64.5 | 4.3 | 68.8 |
Disposals | (0.2) | (0.7) | (0.9) |
Balance at 28 March 2024 | 327.8 | 15.6 | 343.4 |
| Net book value | |||
At 30 March 2023 | 351.3 | 8.3 | 359.6 |
At 28 March 2024 | 312.7 | 6.6 | 319.3 |
The costs relating to leases for which the Group applied the practical expedient described in paragraph 5a of IFRS16 (leases with a contract term
of less than 12 months) amounted to £0.0m in the 52 week period ended 28 March 2024.
| Property | Equipment | Total | |
| £m | £m | £m | |
| Cost | |||
Balance at 31 March 2022 | 531.6 | 16.6 | 548.2 |
Additions | 83.4 | 4.0 | 87.4 |
Cost reallocation | (0.2) | – | (0.2) |
Disposals | – | (0.3) | (0.3) |
Balance at 30 March 2023 | 614.8 | 20.3 | 635.1 |
| Depreciation | |||
Balance at 31 March 2022 | 199.2 | 8.9 | 208.1 |
Depreciation charge for the period | 64.1 | 3.4 | 67.5 |
Cost reallocation | 0.2 | – | 0.2 |
Disposals | – | (0.3) | (0.3) |
Balance at 30 March 2023 | 263.5 | 12.0 | 275.5 |
| Net book value | |||
At 31 March 2022 | 332.4 | 7.7 | 340.1 |
At 30 March 2023 | 351.3 | 8.3 | 359.6 |
The costs relating to leases for which the Group applied the practical expedient described in paragraph 5a of IFRS16 (leases with a contract term
of less than 12 months) amounted to £0.1m in the 52 week period ended 30 March 2023.
Pets at Home Group Plc Annual Report and Accounts 2024
128
12 Leases continued
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Less than one year | 79.8 | 83.3 |
Between one and three years | 133.9 | 145.3 |
Between three and five years | 86.1 | 99.5 |
Between five and ten years | 96.5 | 103.9 |
More than ten years | 43.0 | 59.4 |
Total undiscounted lease liabilities | 439.3 | 491.4 |
Carrying value of lease liabilities included in the statement of financial position | 380.8 | 421.4 |
Current | 79.8 | 83.3 |
Non-current | 301.0 | 338.1 |
| Customer lists | Software | ||||
| and ‘know- | under | ||||
| Goodwill | how’ | Software | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 30 March 2023 | 959.3 | 7.0 | 71.7 | 8.3 | 1,046.3 |
Additions | 1.0 | – | 6.1 | – | 7.1 |
| Transfers | – | – | – | (5.7) | (5.7) |
Brought into use | – | – | 2.4 | (2.4) | – |
Disposals | (0.8) | (0.4) | (0.1) | – | (1.3) |
Balance at 28 March 2024 | 959.5 | 6.6 | 80.1 | 0.2 | 1,046.4 |
| Amortisation | |||||
Balance at 30 March 2023 | 0.1 | 1.7 | 55.0 | – | 56.8 |
Amortisation charge for the period | – | 0.2 | 9.9 | – | 10.1 |
Disposals | – | (0.2) | - | – | (0.2) |
Balance at 28 March 2024 | 0.1 | 1.7 | 64.9 | – | 66.7 |
| Net book value | |||||
At 30 March 2023 | 959.2 | 5.3 | 16.7 | 8.3 | 989.5 |
At 28 March 2024 | 959.4 | 4.9 | 15.2 | 0.2 | 979.7 |
Notes (forming part of the financial statements) continued
129
Strategic Report Governance Financial Statements
| Customer lists | Software | ||||
| and ‘know- | under | ||||
| Goodwill | how’ | Software | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 31 March 2022 | 959.1 | 6.7 | 68.3 | – | 1,034.1 |
Additions | – | – | 5.5 | 4.5 | 10.0 |
On acquisition (note 10) | 0.2 | 0.4 | – | – | 0.6 |
| Transfers | – | – | (4.0) | 5.7 | 1.7 |
Brought into use | – | – | 1.9 | (1.9) | – |
Disposals | – | (0.1) | – | – | (0.1) |
Balance at 30 March 2023 | 959.3 | 7.0 | 71.7 | 8.3 | 1,046.3 |
| Amortisation | |||||
Balance at 31 March 2022 | 0.1 | 1.0 | 45.9 | – | 47.0 |
Amortisation charge for the period | – | 0.7 | 9.1 | – | 9.8 |
Balance at 30 March 2023 | 0.1 | 1.7 | 55.0 | – | 56.8 |
| Net book value | |||||
At 31 March 2022 | 959.0 | 5.7 | 22.4 | - | 987.1 |
At 30 March 2023 | 959.2 | 5.3 | 16.7 | 8.3 | 989.5 |
| Goodwill | ||
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Retail | 586.1 | 586.1 |
| TVC | – | 11.1 |
Vet Group | 373.3 | 362.0 |
Total | 959.4 | 959.2 |
| 52 week period ended | 52 week period ended | ||||
| 28 March 2024 | 30 March 2023 | ||||
Retail | Vet Group | Retail | Vet Group | TVC | |
Period on which management approved forecasts are based (years) | 5 | 5 | 5 | 5 | 5 |
Growth rate applied beyond approved forecast period | 2.0% | 3.5% | 2.0% | 3.5% | 2.0% |
Discount rate (pre-tax) | 11% | 12% | 12% | 11% | 11% |
Gross profit margin (average over next 5 years) | 45% | 60% | 46% | 61% | 61% |
Pets at Home Group Plc Annual Report and Accounts 2024
130
13 Intangible assets continued
14 Inventories
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Finished goods | 97.5 | 108.6 |
The cost of inventories recognised as an expense and included in ‘cost of sales’ is £687.1m (52 week period ended 30 March 2023: £642.6m).
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 28 March 2024 the inventory provision amounted to £4.1m (30 March 2023: £4.0m). 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 £8.5m (30 March 2023: £8.4m).
In the 52 week period ended 28 March 2024, the value of inventory written off to the income statement amounted to £10.3m (52 week period
ended 30 March 2023: £9.6m).
Notes (forming part of the financial statements) continued
131
Strategic Report Governance Financial Statements
At 28 March 2024 | At 30 March 2023 | |||||
| Assets | Liabilities | Total | Assets | Liabilities | Total | |
| £m | £m | £m | £m | £m | £m | |
Property, plant and equipment | – | (6.1) | (6.1) | – | (2.2) | (2.2) |
Financial assets | 0.2 | – | 0.2 | 1.0 | – | 1.0 |
Financial liabilities | – | – | – | – | (0.5) | (0.5) |
Other short-term timing differences | 1.9 | (0.8) | 1.1 | 3.4 | (0.9) | 2.5 |
Share based payments | 0.1 | – | 0.1 | 1.1 | – | 1.1 |
Net deferred tax assets/(liabilities) | 2.2 | (6.9) | (4.7) | 5.5 | (3.6) | 1.9 |
| 30 March | Recognised in | Recognised in | 28 March | |
| 2023 | income | equity 2024 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | (2.2) | (3.9) | – | (6.1) |
Net financial assets/(liabilities) | 0.5 | – | (0.3) | 0.2 |
Other short-term timing differences | 2.5 | (1.4) | – | 1.1 |
Share based payments | 1.1 | – | (1.0) | 0.1 |
1.9 | (5.3) | (1.3) | (4.7) | |
| 31 March | Recognised in | Recognised in | 30 March | |
| 2022 | income | equity 2023 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | 1.9 | (4.1) | – | (2.2) |
Net financial assets/(liabilities) | (0.8) | – | 1.3 | 0.5 |
Other short-term timing differences | (3.1) | 5.6 | – | 2.5 |
Share based payments | 3.1 | – | (2.0) | 1.1 |
1.1 | 1.5 | (0.7) | 1.9 | |
| 30 March | Recognised in | Recognised in | 28 March | |
| 2023 | income | equity 2024 | ||
| £m | £m | £m | £m | |
Net financial liabilities | (0.4) | – | 0.4 | – |
Other short-term timing differences | 2.1 | (1.3) | – | 0.8 |
Share based payments | 1.1 | – | (1.0) | 0.1 |
2.8 | (1.3) | (0.6) | 0.9 | |
| 31 March | Recognised in | Recognised in | 30 March | |
| 2022 | income | equity 2023 | ||
| £m | £m | £m | £m | |
Net financial liabilities | (0.3) | – | (0.1) | (0.4) |
Other short-term timing differences | – | 2.1 | – | 2.1 |
Share based payments | 3.1 | – | (2.0) | 1.1 |
2.8 | 2.1 | (2.1) | 2.8 | |
Pets at Home Group Plc Annual Report and Accounts 2024
132
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Non-current assets | ||||
Investments in Joint Venture veterinary practices | 2.7 | 0.4 | – | – |
Loans to Joint Venture veterinary practices – initial set up loans | 5.2 | 6.6 | – | – |
Loans to Joint Venture veterinary practices – other loans | 0.5 | 1.2 | – | – |
Other investments | 2.0 | 2.1 | – | – |
Other receivables | 0.5 | 0.6 | – | – |
10.9 | 10.9 | – | – |
| Gross loan | Expected | Carrying value | |
| value | credit loss | of loan | |
| £m | £m | £m | |
As at 30 March 2023 | 7.6 | (1.0) | 6.6 |
Net repayment and further advances | (1.8) | – | (1.8) |
Provisions released during the period | – | 0.4 | 0.4 |
As at 28 March 2024 | 5.8 | (0.6) | 5.2 |
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| Credit risk | £m | £m |
Performing | 5.2 | 6.6 |
Significant increase in credit risk | 0.6 | 1.0 |
Gross carrying amount | 5.8 | 7.6 |
Loss allowance | (0.6) | (1.0) |
Net carrying amount | 5.2 | 6.6 |
Notes (forming part of the financial statements) continued
133
Strategic Report Governance Financial Statements
| Gross loan | Expected | Carrying value | |
| value | credit loss | of loan | |
| £m | £m | £m | |
As at 30 March 2023 | 1.2 | – | 1.2 |
Net repayment and further advances | (0.7) | – | (0.7) |
Provisions made during the period | – | – | – |
As at 28 March 2024 | 0.5 | – | 0.5 |
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| Other financial assets | £m | £m | £m | £m |
| Current assets | ||||
Fuel forward contracts | 0.1 | – | – | – |
Interest rate swaps | – | 2.0 | – | 2.0 |
Forward exchange contracts | 0.2 | – | – | – |
Other receivables | – | 0.2 | – | – |
0.3 | 2.2 | – | 2.0 |
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| Other financial liabilities | £m | £m | £m | £m |
| Current liabilities | ||||
Fuel forward contracts | – | (0.3) | – | – |
Forward exchange contracts | (1.0) | (3.4) | – | – |
(1.0) | (3.7) | – | – |
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Non-current liabilities | ||||
Interest rate swaps | – | (0.4) | – | (0.4) |
– | (0.4) | – | (0.4) |
Pets at Home Group Plc Annual Report and Accounts 2024
134
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Current assets | ||||
Trade receivables | 13.9 | 13.5 | – | – |
Amounts owed by JV practices – funding for new practices | 0.4 | – | – | – |
Amounts owed by Joint Venture veterinary practices – operating loans | 5.8 | 10.4 | – | – |
Amounts owed by Joint Venture veterinary practices – trading balances | 10.9 | 11.5 | – | – |
Other receivables | 6.3 | 5.7 | – | – |
Prepayments | 9.3 | 3.4 | – | – |
Accrued income | 14.3 | 7.3 | – | – |
| Non-current assets | ||||
Amounts owed by Group undertakings | – | – | 663.3 | 578.4 |
60.9 | 51.8 | 663.3 | 578.4 |
| Gross loan | Expected | Carrying value | |
| value | credit loss | of loan | |
| £m | £m | £m | |
As at 30 March 2023 | 13.8 | (3.4) | 10.4 |
Loans written off | (1.6) | – | (1.6) |
Net repayment and further advances | (3.4) | – | (3.4) |
Utilisation of provision | – | 1.1 | 1.1 |
Provisions made during the period | – | (0.7) | (0.7) |
As at 28 March 2024 | 8.8 | (3.0) | 5.8 |
Notes (forming part of the financial statements) continued
135
Strategic Report Governance Financial Statements
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| Credit risk | £m | £m |
Performing | 5.3 | 9.1 |
In default | 3.5 | 4.7 |
Gross carrying amount | 8.8 | 13.8 |
Loss allowance | (3.0) | (3.4) |
Net carrying amount | 5.8 | 10.4 |
18 Cash and cash equivalents
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Cash at bank | 57.1 | 178.0 | – | 0.4 |
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Non-current liabilities | ||||
Unsecured bank loans | 22.2 | 97.3 | 22.2 | 97.3 |
Asset backed loans | 21.1 | 22.0 | – | – |
Total | 43.3 | 119.3 | 22.2 | 97.3 |
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Current liabilities | ||||
Asset backed loans | 2.2 | 1.2 | – | – |
Pets at Home Group Plc Annual Report and Accounts 2024
136
19 Other interest-bearing loans and borrowings continued
| Carrying | Carrying | ||||||
| Face value at | amount at | Face value at | amount at 30 | ||||
| 28 March | 28 March | 30 March | March | ||||
| Nominal | Year of | 2024 | 2024 | 2023 | 2023 | ||
| Currency | interest rate | maturity | £m | £m | £m | £m | |
Revolving credit facility | GBP | SONIA +1.30% | 2028 | 25.0 | 22.2 | 100.0 | 97.3 |
Asset backed loan | GBP | SONIA + 1.50% | 2030 | 23.3 | 23.3 | 23.3 | 23.2 |
Total | 48.3 | 45.5 | 123.3 | 120.5 |
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Within one year or repayable on demand | 2.2 | 1.2 |
Between one and two years | 4.3 | 3.7 |
Between two and five years | 37.9 | 111.2 |
Greater than five years | 3.9 | 7.2 |
48.3 | 123.3 |
| At 30 March | Non-cash | At 28 March | ||
| 2023 | Cash flow | movement | 2024 | |
| £m | £m | £m | £m | |
Cash and cash equivalents | 178.0 | (120.9) | – | 57.1 |
Debt due within one year | (1.2) | – | (1.0) | (2.2) |
Debt due after one year | (122.1) | 75.0 | 1.0 | (46.1) |
Net debt | 54.7 | (45.9) | – | 8.8 |
Notes (forming part of the financial statements) continued
137
Strategic Report Governance Financial Statements
Group | Company | |||
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Current | ||||
Trade payables | 138.2 | 155.5 | – | – |
Accruals and deferred income | 74.9 | 68.5 | 2.8 | 1.5 |
Amounts owed to Joint Venture veterinary practices | 0.8 | 4.5 | – | – |
Other payables including tax and social security | 35.3 | 32.7 | – | – |
Amounts owed to Group undertakings | – | – | 813.5 | 616.5 |
249.2 | 261.2 | 816.3 | 618.0 |
21 Provisions
| Provisions for exit | |||||
| and closure costs | Provision for exit | ||||
| relating to Joint | and closure costs | ||||
| Dilapidation | Closed stores | Venture veterinary | relating to existing | ||
| provision | provision | practices | Distribution Centres | Total | |
| £m | £m | £m | £m | £m | |
Balance at 30 March 2023 | 9.2 | 0.7 | 3.2 | 3.7 | 16.8 |
Provisions made during the period | 0.3 | – | 3.7 | 2.8 | 6.8 |
Provisions utilised during the period | (0.7) | (0.6) | (2.3) | (2.6) | (6.2) |
Provisions released | (4.6) | – | (0.1) | – | (4.7) |
Balance at 28 March 2024 | 4.2 | 0.1 | 4.5 | 3.9 | 12.7 |
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Current | 7.6 | 3.9 |
Non-current | 5.1 | 12.9 |
12.7 | 16.8 |
As a result of the closure and planned closure of the existing Distribution Centres on the transition to the Stafford Distribution Centre, at
28 March 2024, the Group has a provision of £1.4m (2023: £2.0m) for voluntary redundancies for colleagues employed at those sites. The Group
also holds a provision of £2.5m (2023: £1.7m) for retention bonuses payable to colleagues who remain from the previous Distribution Centres
provided they remain employed by the Group until the remaining sites close. Further information is provided in note 3.
The closed stores provision relates to the rates, service charge and utilities payable on 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 one and three years. Market
conditions have an impact and hence the assumptions on future cash flows are reviewed regularly and revisions to the provision made where
necessary.
The dilapidations provision relates to the expected cost of repairs on leased properties at future lease expiry dates, all of which are expected
to be within 2 years of the 52 weeks ending 28 March 2024, therefore the provision is not discounted. The timing of the utilisation of these
provisions is variable depending on the expiry dates of the property leases concerned.
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 IAS37. The timing of the utilisation of these provisions is variable dependent upon the lease expiry dates of the properties concerned,
which vary between 2 and 13 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.
Pets at Home Group Plc Annual Report and Accounts 2024
138
| Share capital | Share capital | |
| Number | £m | |
At 31 March 2022 | 500,000,000 | 5.0 |
At 30 March 2023 | 483,197,785 | 4.8 |
At 28 March 2024 | 467,911,542 | 4.7 |
| Share capital | |
| 28 March | |
| 2024 | |
| £m | |
At beginning of period | 4.8 |
Nominal value of shares cancelled in year following purchase by the Group | (0.1) |
On issue at period end – authorised | 4.7 |
| Share capital | |
| 28 March | |
| 2024 | |
| £m | |
At beginning of period | 5.0 |
Nominal value of shares cancelled in year following purchase by the Group | 0.2 |
On issue at period end – authorised | 4.8 |
Notes (forming part of the financial statements) continued
139
Strategic Report Governance Financial Statements
| Cash flow | Total other | ||
| Translation | hedging | comprehensive | |
| reserve | reserve | income | |
| £m | £m | £m | |
Other comprehensive income | – | – | – |
Effective portion of changes in fair value of cash flow hedges | – | 3.3 | 3.3 |
Net change in fair value of cash flow hedges reclassified to profit or loss | – | 1.3 | 1.3 |
Deferred tax on changes in fair value of cash flow hedges | – | (0.3) | (0.3) |
Total other comprehensive income | – | 4.3 | 4.3 |
| Cash flow | Total other | ||
| Translation | hedging | comprehensive | |
| reserve | reserve | income | |
| £m | £m | £m | |
Other comprehensive income | (0.1) | – | (0.1) |
Effective portion of changes in fair value of cash flow hedges | – | (10.6) | (10.6) |
Deferred tax on changes in fair value of cash flow hedges | – | 1.3 | 1.3 |
Total other comprehensive income | (0.1) | (9.3) | (9.4) |
23 Financial instruments
| Euro | US Dollar | HKD | Total | |
| £m | £m | £m | £m | |
Cash and cash equivalents | 0.4 | 6.1 | – | 6.5 |
Trade payables | (2.8) | (3.2) | – | (6.0) |
Forward exchange contracts | (0.2) | (0.6) | – | (0.8) |
Balance sheet exposure | (2.6) | 2.3 | – | (0.3) |
Pets at Home Group Plc Annual Report and Accounts 2024
140
23 Financial instruments continued
Market risk continued
Foreign currency risk continued
| Euro | US Dollar | HKD | Total | |
| £m | £m | £m | £m | |
Cash and cash equivalents | 0.3 | 6.8 | – | 7.1 |
Trade payables | (2.9) | (7.2) | – | (10.1) |
Forward exchange contracts | – | (3.3) | – | (3.3) |
Balance sheet exposure | (2.6) | (3.7) | – | (6.3) |
Equity | Profit or loss | |||
| 28 March | 30 March | 28 March | 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
US Dollar | – | 0.2 | (0.1) | – |
Euro | – | – | 0.1 | – |
Group | Company | |||
| Book value | Book value | Book value | Book value | |
| At 28 March | At 30 March | At 28 March | At 30 March | |
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
| Fixed rate instruments | ||||
Financial liabilities | 48.3 | 100.0 | 25.0 | 100.0 |
| Variable rate instruments | ||||
Financial liabilities | – | 23.3 | – | – |
Total financial liabilities | 48.3 | 123.3 | 25.0 | 100.0 |
Notes (forming part of the financial statements) continued
141
Strategic Report Governance Financial Statements
| At 28 March | At 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Equity | ||
Increase | 0.1 | 0.5 |
Decrease | (0.1) | (0.5) |
| Profit or loss | ||
Increase | 0.1 | 0.1 |
Decrease | (0.1) | (0.1) |
| Carrying | Contractual | 5 years and | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | over | |
| £m | £m | £m | £m | £m | £m | |
| Non-derivative financial liabilities | ||||||
Bank loans (note 19) | 45.5 | 48.3 | 2.2 | 4.3 | 37.9 | 3.9 |
Trade payables (note 20) | 138.2 | 138.2 | 138.2 | – | – | – |
183.7 | 186.5 | 140.4 | 4.3 | 37.9 | 3.9 |
| Carrying | Contractual | 5 years and | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | over | |
| £m | £m | £m | £m | £m | £m | |
| Non-derivative financial liabilities | ||||||
Bank loans (note 19) | 120.5 | 140.5 | 6.6 | 7.5 | 118.8 | 7.6 |
Trade payables (note 20) | 155.5 | 155.5 | 155.5 | – | – | – |
276.0 | 296.0 | 162.1 | 7.5 | 118.8 | 7.6 |
Pets at Home Group Plc Annual Report and Accounts 2024
142
23 Financial instruments continued
Liquidity risk continued
| Carrying | Contractual | 5 years | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | and over | |
| £m | £m | £m | £m | £m | £m | |
| Non-derivative financial liabilities | ||||||
Bank loans (note 19) | 22.2 | 25.0 | – | – | 25.0 | – |
| Carrying | Contractual | 5 years and | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | over | |
| £m | £m | £m | £m | £m | £m | |
| Non-derivative financial liabilities | ||||||
Bank loans (note 19) | 97.3 | 111.9 | 4.0 | 2.7 | 105.2 | – |
97.3 | 111.9 | 4.0 | 2.7 | 105.2 | – |
| Carrying | Expected | 5 years | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | and over | |
| £m | £m | £m | £m | £m | £m | |
| Forward exchange contracts: | ||||||
Current liabilities (note 16) | (1.0) | (1.0) | (1.0) | – | – | – |
| Carrying | Expected cash | 5 years and | ||||
| amount | flows | 1 year or less | 1 to <2 years | 2 to <5 years | over | |
| £m | £m | £m | £m | £m | £m | |
| Interest rate swaps: | ||||||
Current assets (note 16) | 2.0 | 2.0 | 2.0 | – | – | – |
Non-current liabilities (note 16) | (0.4) | (0.4) | – | (0.4) | – | – |
| Forward exchange contracts: | ||||||
Current liabilities (note 16) | (3.4) | (3.4) | (3.4) | – | – | – |
| Fuel forward contracts: | ||||||
Current liabilities (note 16) | (0.3) | (0.3) | (0.3) | – | – | – |
(2.1) | (2.1) | (1.7) | (0.4) | – | – |
| Carrying | Expected | 5 years | ||||
| amount | cash flows | 1 year or less | 1 to <2 years | 2 to <5 years | and over | |
| £m | £m | £m | £m | £m | £m | |
| Interest rate swaps: | ||||||
Assets (note 16) | – | – | – | – | – | – |
Liabilities (note 16) | – | – | – | – | – | – |
– | – | – | – | – | – |
Notes (forming part of the financial statements) continued
143
Strategic Report Governance Financial Statements
| Carrying | Expected cash | 5 years and | ||||
| amount | flows | 1 year or less | 1 to <2 years | 2 to <5 years | over | |
| £m | £m | £m | £m | £m | £m | |
| Interest rate swaps: | ||||||
Assets (note 16) | 2.0 | 2.0 | 2.0 | – | – | – |
Liabilities (note 16) | (0.4) | (0.4) | – | (0.4) | – | – |
1.6 | 1.6 | 2.0 | (0.4) | – | – |
Pets at Home Group Plc Annual Report and Accounts 2024
144
23 Financial instruments continued
Fair values of financial instruments continued
Fair value hierarchy continued
| Financial | |||||
| Fair value | FVOCI | assets at | Other | ||
| – hedging | – equity | amortised | financial | Total carrying | |
| instruments | instruments | cost | liabilities | amount | |
| Carrying amount | £m | £m | £m | £m | £m |
| Financial assets measured at fair value | |||||
Forward exchange contracts used for hedging (note 16) | 0.2 | – | – | – | 0.2 |
Fuel forward contracts used for hedging (note 16) | 0.1 | – | – | – | 0.1 |
Interest rate swaps used for hedging (note 16) | – | – | – | – | – |
0.3 | – | – | – | 0.3 | |
| Financial assets not measured at fair value | |||||
Other investments (note 16) | - | - | 2.0 | - | 2.0 |
Investments in Joint Venture veterinary practices (note 16) | – | – | 2.7 | – | 2.7 |
Current trade and other receivables (note 17) | – | – | 20.2 | – | 20.2 |
Amounts owed by Joint Venture veterinary practices – funding, trading and operating loans (note 17) | – | – | 17.1 | – | 17.1 |
Cash and cash equivalents (note 18) | – | – | 57.1 | – | 57.1 |
Loans to Joint Venture veterinary practices – initial set up loans (note 16) | – | – | 5.2 | – | 5.2 |
Loans to Joint Venture veterinary practices – other loans (note 16) | – | – | 0.5 | – | 0.5 |
Non-current other receivables (note 16) | – | – | 0.5 | – | 0.5 |
– | – | 105.3 | – | 105.3 | |
| Financial liabilities measured at fair value | |||||
Fuel forward exchange contracts used for hedging (note 16) | – | – | – | – | – |
Forward exchange contracts used for hedging (note 16) | (1.0) | – | – | – | (1.0) |
Interest rate swaps used for hedging (note 16) | – | – | – | – | – |
(1.0) | – | – | – | (1.0) | |
| Financial liabilities not measured at fair value | |||||
Current lease liabilities (note 12) | – | – | – | (79.8) | (79.8) |
Non-current lease liabilities (note 12) | – | – | – | (301.0) | (301.0) |
Trade payables (note 20) | – | – | – | (138.2) | (138.2) |
Amounts owed to Joint Venture veterinary practices (note 20) | – | – | – | (0.8) | (0.8) |
Other interest-bearing loans and borrowings (note 19) | – | – | – | (45.5) | (45.5) |
– | – | – | (565.3) | (565.3) |
| Level 1 | Level 2 | Level 3 | Total | |
| Fair value | £m | £m | £m | £m |
| Financial assets measured at fair value | ||||
Forward exchange contracts used for hedging (note 16) | – | 0.2 | – | 0.2 |
Fuel forward contracts used for hedging (note 16) | – | 0.1 | – | 0.1 |
Interest rate swaps used for hedging (note 16) | – | – | – | – |
Notes (forming part of the financial statements) continued
145
Strategic Report Governance Financial Statements
| Financial | |||||
| Fair value | FVOCI | assets at | Other | ||
| – hedging | – equity | amortised | financial | Total carrying | |
| instruments | instruments | cost | liabilities | amount | |
| Carrying amount | £m | £m | £m | £m | £m |
| Financial assets measured at fair value | |||||
Interest rate swaps used for hedging (note 16) | 2.0 | – | – | – | 2.0 |
2.0 | – | – | – | 2.0 | |
| Financial assets not measured at fair value | |||||
Investments in Joint Venture veterinary practices (note 16) | – | – | 0.4 | – | 0.4 |
Other investments (note 16) | 2.1 | – | 2.1 | ||
Current trade and other receivables (note 17) | – | – | 19.2 | – | 19.2 |
Amounts owed by Joint Venture veterinary practices – funding, trading and operating loans (note 17) | – | – | 21.9 | – | 21.9 |
Cash and cash equivalents (note 18) | – | – | 178.0 | – | 178.0 |
Loans to Joint Venture veterinary practices – initial set up loans (note 16) | – | – | 6.6 | – | 6.6 |
Loans to Joint Venture veterinary practices – other loans (note 16) | – | – | 1.2 | – | 1.2 |
Non-current other receivables (note 16) | – | – | 0.6 | – | 0.6 |
– | – | 230.0 | – | 230.0 | |
| Financial liabilities measured at fair value | |||||
Fuel forward exchange contracts used for hedging (note 16) | (0.3) | – | – | – | (0.3) |
Forward exchange contracts used for hedging (note 16) | (3.4) | – | – | – | (3.4) |
Interest rate swaps used for hedging (note 16) | (0.4) | – | – | – | (0.4) |
(4.1) | – | – | – | (4.1) | |
| Financial liabilities not measured at fair value | |||||
Current lease liabilities (note 12) | – | – | – | (83.3) | (83.3) |
Non-current lease liabilities (note 12) | – | – | – | (338.1) | (338.1) |
Trade payables (note 20) | – | – | – | (155.5) | (155.5) |
Amounts owed to Joint Venture veterinary practices (note 20) | – | – | – | (4.5) | (4.5) |
Other interest-bearing loans and borrowings (note 19) | – | – | – | (120.5) | (120.5) |
– | – | – | (701.9) | (701.9) |
| Level 1 | Level 2 | Level 3 | Total | |
| Fair value | £m | £m | £m | £m |
| Financial assets measured at fair value | ||||
Interest rate swaps used for hedging (note 16) | – | – | 2.0 | 2.0 |
Pets at Home Group Plc Annual Report and Accounts 2024
146
23 Financial instruments continued
| Loans and | Lease | ||
| borrowings | liabilities | Total | |
| £m | £m | £m | |
Balance at 30 March 2023 | 120.5 | 421.4 | 541.9 |
| Changes from financing cash flows | |||
Repayment of borrowings | (75.0) | – | (75.0) |
Payment of lease liabilities | – | (81.7) | (81.7) |
Total changes from financing cash flows | (75.0) | (81.7) | (156.7) |
| Other changes | |||
Interest expense on lease liabilities | – | 13.3 | 13.3 |
Additions to lease liabilities | – | 29.8 | 29.8 |
Disposal of lease liabilities | – | (2.0) | (2.0) |
Capitalisation of debt issue costs | (0.9) | – | (0.9) |
Amortisation of debt issue costs | 0.9 | – | 0.9 |
Total other changes | – | 41.1 | 41.1 |
Balance at 28 March 2024 | 45.5 | 380.8 | 426.3 |
| Loans and | Lease | ||
| borrowings | liabilities | Total | |
| £m | £m | £m | |
Balance at 31 March 2022 | 96.9 | 383.0 | 479.9 |
| Changes from financing cash flows | |||
Proceeds from loans and borrowings | 123.3 | – | 123.3 |
Repayment of borrowings | (100.0) | – | (100.0) |
Lease incentives received | – | 22.0 | 22.0 |
Payment of lease liabilities | – | (83.1) | (83.1) |
Total changes from financing cash flows | 23.3 | (61.1) | (37.8) |
| Other changes | |||
Interest expense on lease liabilities | – | 12.4 | 12.4 |
Additions to lease liabilities | – | 87.4 | 87.4 |
Disposal of lease liabilities | – | (0.3) | (0.3) |
Capitalisation of debt issue costs | (0.1) | – | (0.1) |
Amortisation of debt issue costs | 0.4 | – | 0.4 |
Total other changes | 0.3 | 99.5 | 99.8 |
Balance at 30 March 2023 | 120.5 | 421.4 | 541.9 |
| Loans and | ||
| borrowings | Total | |
| £m | £m | |
Balance at 30 March 2023 | 97.3 | 97.3 |
| Changes from financing cash flows | ||
Repayment of borrowings | (75.0) | (75.0) |
Total changes from financing cash flows | (75.0) | (75.0) |
Capitalisation of debt issue costs | (0.9) | (0.9) |
Amortisation of debt issue costs | 0.8 | 0.8 |
Total other changes | (0.1) | (0.1) |
Balance at 28 March 2024 | 22.2 | 22.2 |
Notes (forming part of the financial statements) continued
147
Strategic Report Governance Financial Statements
| Loans and | ||
| borrowings | Total | |
| £m | £m | |
Balance at 31 March 2022 | 96.9 | 96.9 |
| Changes from financing cash flows | ||
Proceeds from loans and borrowings | 100.0 | 100.0 |
Repayment of borrowings | (100.0) | (100.0) |
Total changes from financing cash flows | – | – |
| Other changes | ||
Amortisation of debt issue costs | 0.4 | 0.4 |
Total other changes | 0.4 | 0.4 |
Balance at 30 March 2023 | 97.3 | 97.3 |
| Cash flow hedge reserve | ||
| 2024 | 2023 | |
| £m | £m | |
| Foreign currency risk | ||
Inventory purchases | (0.6) | (2.5) |
| Commodity price risk | ||
Fuel purchases | 0.1 | (0.3) |
| Interest rate risk | ||
Variable rate instruments | – | 1.2 |
Commodity price risk | Foreign currency risk | Interest rate risk | ||||
| Forward exchange | Forward exchange | |||||
| contracts – fuel | contracts – inventory | Interest rate swaps | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | £m | £m | |
| Nominal amount | ||||||
Carrying amount – asset (note 16) | 0.1 | – | 0.2 | – | – | 2.0 |
Carrying amount – liability (note 16) | – | (0.3) | (1.0) | (3.4) | – | (0.4) |
| Changes in the value of hedging instrument recognised in OCI | ||||||
Amount of hedging reserve transferred to cost of inventory | – | 0.5 | (3.3) | 2.2 | – | 1.6 |
Net change in fair value of cash flow hedges reclassified to profit or loss | (0.3) | – | – | – | 1.6 | – |
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
Balance brought forward | (1.6) | 3.4 |
| Changes in fair value | ||
Foreign currency risk- inventory purchase | 2.6 | (5.5) |
Commodity risk- fuel | 0.4 | (0.9) |
Interest rate risk | (1.6) | 0.1 |
Tax on movements on reserves during the year | (0.3) | 1.3 |
Balance carried forward | (0.5) | (1.6) |
Pets at Home Group Plc Annual Report and Accounts 2024
148
23 Financial instruments continued
| Inter-relationship between significant | |||
| unobservable inputs and fair value | |||
Type | Valuation technique | Significant unobservable inputs | measurement |
Investment in equity securities | The fair values of investments | Not applicable | Not applicable |
| 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. | |||
| Forward exchange contracts and | Market comparison technique – the | Not applicable | Not applicable |
| interest rate swaps | fair values are based on broker | ||
| quotes. Similar contracts are traded | |||
| in an active market and the quotes | |||
| reflect the actual transactions on | |||
| similar instruments. | |||
Other financial liabilities | Other financial liabilities include the | Future earnings performance | Fair value linked to increase or |
| fair values of the put and call options | decrease in the best estimate of the | ||
| over the non-controlling interests | future earnings performance | ||
| of subsidiary undertakings. The fair | |||
| values represent the best estimate | |||
| of amounts payable based on future | |||
| earnings performance discounted to | |||
| present value. |
| Maturity | ||||||
| More than | More than | |||||
| 1–6 months | 6–12 months | 1 year | 1–6 months | 6–12 months | 1 year | |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Foreign currency risk | ||||||
| Forward exchange contracts | ||||||
Net exposure (£m) | 50.4 | 29.1 | – | 50.1 | 30.8 | – |
Average GBP-USD forward contract rate | 1.24 | 1.27 | – | 1.16 | 1.21 | – |
Average GBP-EUR forward contract rate | 1.14 | 1.16 | – | 1.14 | 1.11 | – |
| Interest rate risk | ||||||
| Interest rate swaps | ||||||
Net exposure (£m) | 50.0 | – | 100.0 | – | 50.0 | |
Average fixed interest rate | 5.06% | – | 0.811% | – | 5.058% |
Notes (forming part of the financial statements) continued
149
Strategic Report Governance Financial Statements
24 Share-based payments
At 28 March 2024 and 30 March 2023, the Group has five share award plans, all of which are equity settled schemes.
1 Company Share Ownership Plan (‘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 £30,000).
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 £30,000 limit and the need to seek HMRC approval for the scheme and subsequent amendments (as
applicable).
2 Performance Share Plan (‘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 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 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.
Pets at Home Group Plc Annual Report and Accounts 2024
150
24 Share-based payments
(d) Scheme limits continued
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
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.
3 Save As You Earn (‘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 £500 per month. During the 52
weeks ending 28 March 2024 the Executive Directors have elected to participate in the SAYE, along with 10.95% of eligible colleagues.
The options are granted once a year, and in normal circumstances they are not exercisable until completion of a 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.
Notes (forming part of the financial statements) continued
151
Strategic Report Governance Financial Statements
(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 £500 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 £5 per month (or
such greater amount as the Board may specify, not to exceed £10). 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 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.
4 Restricted Stock Plan (‘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 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 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.
Pets at Home Group Plc Annual Report and Accounts 2024
152
24 Share-based payments continued
5 Deferred Share Bonus Plan (‘DSBP’)
On 24 March 2022 the Company adopted the DSBP. Awards under the DSBP represent the deferral of the discretionary bonus awarded to
eligible colleagues into shares. Awards under the DSBP will be exercisable between the second anniversary of the first day following the end
of the Year in respect of which the Bonus in question is earned or would have been earned notwithstanding that it was deferred and the tenth
anniversary of the Date of Grant. These awards are granted at nil cost.
(a) Eligibility
All colleagues, including the Executive Directors and Senior Executives, are eligible to participate in the DSBP, at the discretion of the
Remuneration Committee.
(b) Grant of awards
Awards under the DSBP 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 DSBP 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 DSBP 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 DSBP and
any other discretionary share option scheme of the Company (including the 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 DSBP and any other employee share scheme operated by the
Company (including the 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 all the shares awarded to an eligible employee in respect of any financial year (calculated on the Date of Grant)
comprised in awards granted to them in respect of that financial year under the plan, shall not exceed 100 per cent. of the bonus the eligible
employee has agreed to, or has been required to, defer for that financial year.
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 | PSP | ||||||||
2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | |
| At grant date | |||||||||
Share price | £3.75 | £3.47 | £4.57 | £2.28 | £1.87 | £1.37 | £2.59 | £2.75 | £2.45 |
Exercise price | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 | £0.00 |
Expected volatility | 37% | 32% | 32% | 32% | 32% | 32% | 32% | 30% | 30% |
Option life (years) | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
Expected dividend yield | 2.00% | 2.00% | 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 | n/a | n/a | 0.005 | 0.0107 | 0.0107 |
Weighted average fair value of options granted | 3.75 | 3.47 | £4.57 | £2.28 | £1.87 | £1.37 | £2.06 | £2.06 | £2.06 |
Notes (forming part of the financial statements) continued
153
Strategic Report Governance Financial Statements
DSBP | CSOP | SAYE | ||||||
| 2023 | 2022 | 2016 | 2015 | 2023 | 2022 | 2021 | 2020 | |
| At grant date | ||||||||
Share price | £3.78 | £3.10 | £2.75 | £2.31 | £3.49 | £3.05 | £5.13 | £2.87 |
Exercise price | £0.00 | £0.00 | £2.75 | £2.31 | £2.79 | £2.44 | £4.10 | £2.29 |
Expected volatility | 37% | 37% | 32% | 37% | 37% | 37% | 33% | 32% |
Option life (years) | 10 | 10 | 10 | 10 | 3 | 3 | 3 | 3 |
Expected dividend yield | 2% | 2% | 2% | 2% | 2% | 2% | 2% | 2% |
Risk free interest rate | n/a | n/a | 2% | 2% | 4% | 1% | 1% | 0% |
Weighted average fair value of options granted | £3.78 | £3.10 | £0.89 | £0.75 | £1.36 | £1.16 | £1.68 | £0.95 |
For both the RSA and DSBP awards, the fair value is the share price at the date of the grant so the risk free rate has no impact on the fair value
calculation.
Movements in awards under share-based payment schemes:
| PSP | CSOP | SAYE | RSA | DSPS | Total | |
| 000 | 000 | 000 | 000 | 000 | 000 | |
Outstanding at start of year | 2 | 328 | 3,891 | 5,007 | – | 9,228 |
Granted | – | – | 1,364 | 1,797 | 250 | 3,411 |
Forfeited | – | (11) | (780) | (815) | – | (1,606) |
Exercised | – | (114) | (1,060) | (1,685) | – | (2,859) |
Lapsed | (2) | (2) | (17) | (17) | – | (38) |
Outstanding at end of year | – | 201 | 3,398 | 4,287 | 250 | 8,136 |
Weighted average exercise price | – | 2.60 | 2.68 | – | – | NA |
The Group income statement charge recognised in respect of share-based payments for the 52 week period ended 28 March 2024 is £5.9m
(52 week period ended 30 March 2023: £4.9m).
Pets at Home Group Plc Annual Report and Accounts 2024
154
26 Contingencies continued
Company | Registered number |
ABTW Limited | 07715283 |
Accrington Vets4Pets Limited | 10015704 |
Alton Vets4Pets Limited | 09639868 |
Andover Vets4Pets Limited | 08132407 |
Bangor Wales Vets4Pets Limited | 08314827 |
Bearsden Vets4Pets Limited | 07780175 |
Bedminster Vets4Pets Limited | 09267870 |
Belfast Stormont Vets4Pets Limited | 09022077 |
Bicester Vets4Pets Limited | 10285804 |
Blackpool Warbreck Vets4Pets Limited | 08394978 |
Bolton Central Vets4Pets Limited | 11047742 |
Bonnyrigg Vets4Pets Limited | 10757330 |
Borehamwood Vets4Pets Limited | 09319066 |
Bourne Vets4Pets Limited | 10200670 |
Bracknell Vets4Pets Limited | 10605544 |
Brand Developments Limited | 00039522 |
Brighton Vets4Pets Limited | 13539268 |
Carmarthen Vets4Pets Limited | 09498169 |
Clacton Vets4Pets Limited | 13668587 |
Clitheroe Vets4Pets Limited | 09878308 |
Companion Care (Ballymena) Limited | 08294444 |
Companion Care (Banbury) Limited | 08606393 |
Companion Care (Barnsley Cortonwood) Limited | 08314805 |
Companion Care (Chippenham) Limited | 08107702 |
Companion Care (Ely) Limited | 04417089 |
Companion Care (Exeter Marsh) Limited | 08314727 |
Companion Care (Exeter) Limited | 04930076 |
Companion Care (Farnborough) Limited | 07673889 |
Companion Care (Farnham) Limited | 07877541 |
Companion Care (Kings Lynn) Limited | 06797982 |
Companion Care (Macclesfield) Limited | 08285995 |
Companion Care (Newport) Limited | 08425358 |
Companion Care (Nottingham) Limited | 04289970 |
Companion Care (Salisbury) Limited | 06457719 |
Companion Care (Services) Limited | 04141142 |
Companion Care (Speke) Limited | 07149744 |
Companion Care (Stratford-upon-Avon) Limited | 07329166 |
Companion Care (Telford) Limited | 04417091 |
Companion Care Management Services Limited | 08878037 |
Corby Vets4Pets Limited | 08163294 |
Craigavon Vets4Pets Limited | 08846831 |
Davidsons Mains Vets4Pets Limited | 07726992 |
Denbigh Vets4Pets Limited | 10976376 |
Didcot Vets4Pets Limited | 14091352 |
East Kilbride South Vets4Pets Limited | 09628917 |
Ellesmere Port Vets4Pets Limited | 09725644 |
Evesham Vets4Pets Limited | 09269582 |
Gamston Vets4Pets Limited | 05665158 |
Gillingham Vets4Pets Limited | 10970617 |
Grantham Vets4Pets Limited | 08361049 |
Guildford Vets4Pets Limited | 13470077 |
Haverfordwest Vets4Pets Limited | 09485504 |
Horsham Vets4Pets Limited | 14345928 |
Huddersfield Vets4Pets Limited | 07207906 |
Inverurie Vets4Pets Limited | 11056047 |
Kendal Vets4Pets Limited | 10163314 |
Larne Vets4Pets Limited | 11121715 |
Notes (forming part of the financial statements) continued
155
Strategic Report Governance Financial Statements
Company | Registered number |
Leeds Kirkstall Vets4Pets Limited | 10291543 |
Leicester St Georges Vets4Pets Limited | 09881176 |
Leigh Vets4Pets Limited | 10601393 |
Linlithgow Vets4Pets Limited | 09966547 |
Liverpool OS Vets4Pets Limited | 06959208 |
Maidstone Vets4Pets Limited | 05171954 |
Malvern Vets4Pets Limited | 10516552 |
Market Harborough Vets4Pets Limited | 10602806 |
Marlborough Vets4Pets Limited | 09869384 |
Melton Mowbray Vets4Pets Limited | 07893688 |
Monmouth Vets4Pets Limited | 10756991 |
Musselburgh Vets4Pets Limited | 10425760 |
Newbury Vets4Pets Limited | 04633009 |
Newton Mearns Vets4Pets Limited | 07957431 |
Newtownards Vets4Pets Limited | 10067571 |
Northwich Vets4Pets Limited | 11107287 |
Pet Advisory Services Limited | 09180974 |
Pets at Home (ESOT) Limited | 03911784 |
Pets at Home No.1 Limited | 08887355 |
Pets at Home Holdings Limited | 03864149 |
Pet City Limited | 02466773 |
Pet City Holdings Limited | 02342109 |
Pet City Resources Limited | 02634797 |
Pet Investment Limited | 04428715 |
Pets at Home Vet Group Limited | 08595290 |
Prescot Vets4Pets Limited | 08878815 |
Rawtenstall Vets4Pets Limited | 09009519 |
Redditch Vets4Pets Limited | 05612150 |
Runcorn Vets4Pets Limited | 11446894 |
Sheldon Vets4Pets Limited | 08822150 |
South Shields Quays Vets4Pets Limited | 09848857 |
St Neots Vets4Pets Limited | 09811640 |
Staines Vets4Pets Limited | 13584062 |
Stamford Vets4Pets Limited | 14179951 |
Sudbury Vets4Pets Limited | 09916308 |
Thamesmead Vets4Pets Limited | 09881179 |
Tilehurst Vets4Pets Limited | 10573329 |
Tiverton Vets4Pets Limited | 11023079 |
Uttoxeter Vets4Pets Limited | 11145982 |
Vets4Pets (Services) Limited | 04317414 |
Vets4Pets Limited | 00038174 |
Vets4Pets Services Limited | 05055601 |
Vets4Pets UK Limited | 03940967 |
Vets4Pets Veterinary Group Limited | 04263054 |
VetsDirect Limited | SC230445 |
Wakefield Vets4Pets Limited | 04262693 |
Wallasey Bidston Moss Vets4Pets Limited | 09190138 |
Wellingborough Vets4Pets Limited | 07620413 |
Wokingham Vets4Pets Limited | 09869355 |
Wrexham Vets4Pets Limited | 07103838 |
Pets at Home Group Plc Annual Report and Accounts 2024
156
| 28 March | 30 March | |
| 2024 | 2023 | |
| £m | £m | |
| Transactions | ||
– Fees for services provided to Joint Venture veterinary practices | 89.3 | 77.2 |
– Rental and other occupancy charges to Joint Venture veterinary practices | 12.7 | 12.2 |
Total income from Joint Venture veterinary practices | 102.0 | 89.4 |
| Acquisitions | ||
| – Consideration for Joint Venture veterinary practices acquired (note 10) | 1.0 | 0.5 |
| Balances | ||
| Included within investments | ||
| – Investments | ||
– Capital Contributions for extensions and improvements of practices (note 16) | 2.5 | – |
– B Share Capital (note 16) | 0.2 | 0.4 |
| Included within trade and other receivables (note 17): | ||
| – Operating loans | ||
– Gross value of operating loans | 8.8 | 13.8 |
– Allowance for expected credit losses held for operating loans | (3.0) | (3.4) |
– Net operating loans | 5.8 | 10.4 |
– Trading balances | 10.9 | 11.5 |
| 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 | 5.8 | 7.6 |
– Allowance for expected credit losses held for initial set up loans | (0.6) | (1.0) |
– Net initial set up loans | 5.2 | 6.6 |
| – Loans to Joint Venture veterinary practices – other loans (note 16) | ||
– Gross value of other loans | 0.5 | 1.2 |
– Allowance for expected credit losses held for other loans | – | – |
– Net other loans | 0.5 | 1.2 |
| Included within trade and other payables (note 20): | ||
– Trading balances | (0.8) | (4.5) |
Total amounts receivable from veterinary practices (before provisions) | 25.2 | 29.6 |
Notes (forming part of the financial statements) continued
157
Strategic Report Governance Financial Statements
| Investments | |
| in subsidiaries | |
| £m | |
At 28 March 2024 and 30 March 2023 | 936.2 |
Pets at Home Group Plc Annual Report and Accounts 2024
158
28 Investment in subsidiaries continued
Group continued
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 |
PAH Pty Limited | Indirect | Australia | Ordinary | 100 | 100 |
Pet Advisory Services Limited | Indirect | United Kingdom | Ordinary | 100 | 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 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 | 100 |
Accrington 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 |
Bangor Wales 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 Warbreck 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 |
Bracknell 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 |
Brighton 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 |
Clacton Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Clitheroe Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Ballymena) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Banbury) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Barnsley Cortonwood) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Notes (forming part of the financial statements) continued
159
Strategic Report Governance Financial Statements
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
Companion Care (Chippenham) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Ely) 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 | 100 |
Companion Care (Farnham) Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
Companion Care (Kendal) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Kings Lynn) Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
Companion Care (Llantrisant) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Macclesfield) 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 (Salisbury) Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
Companion Care (Speke) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Stratford-Upon-Avon) Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Companion Care (Telford) Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
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 |
Davidsons Mains Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Denbigh Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Didcot 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 |
Gamston Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 75 | 50 |
Gillingham Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Grantham Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Great Yarmouth Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Guildford Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Haverfordwest 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 |
Horsham Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Huddersfield 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 |
Kendal Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Kingswood Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Larne Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
Leeds Kirkstall Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Leicester St Georges Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Leigh Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
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 Vets4Pets 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 |
Pets at Home Group Plc Annual Report and Accounts 2024
160
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
Newton Mearns Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Newtownards Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Northwich 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 | 100 |
Redditch Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Ripon Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Runcorn 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 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 |
South Shields Quays Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
St Austell Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 95 | 95 |
St Neots Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
Staines 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 |
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 |
Tilehurst Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
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 |
Wakefield Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 50 |
Wallasey Bidston Moss Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 100 | 100 |
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 |
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
Aberdeen North Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Aberdeen Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Abingdon Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
ABTW 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 |
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 | 50 |
28 Investment in subsidiaries continued
Group continued
Notes (forming part of the financial statements) continued
161
Strategic Report Governance Financial Statements
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 Squires Gate 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 Peel Centre Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
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 |
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 |
Coalville Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Colchester Layer Road Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Colchester Vets4Pets Advanced Practice 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 (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 |
Pets at Home Group Plc Annual Report and Accounts 2024
162
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 (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 (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 (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 (Kirkcaldy) Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Companion Care (Leicester Beaumont Leys) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Companion Care (Leicester Fosse Park) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
28 Investment in subsidiaries continued
Investments in Joint Venture practices and other investments continued
Notes (forming part of the financial statements) continued
163
Strategic Report Governance Financial Statements
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 (Maidstone) Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
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 | 50 |
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 (Scarborough) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Companion Care (Slough) Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Companion Care (Southampton) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Companion Care (Southend-On-Sea) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Companion Care (Stevenage) 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 (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 |
Cumbernauld 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 |
Pets at Home Group Plc Annual Report and Accounts 2024
164
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
Denton Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Dewsbury Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Doncaster Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Dorchester 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 (Newco) Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Epsom Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Falkirk Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Feltham Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Filton 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 |
Good Dog Food Limited | Indirect | United Kingdom | Ordinary | 9 | 0 |
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 |
Handforth Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
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 |
Heanor 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 | 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 |
Kettering Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Kidderminster Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Kilmarnock Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Kirkby in Ashfield Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
28 Investment in subsidiaries continued
Investments in Joint Venture practices and other investments continued
Notes (forming part of the financial statements) continued
165
Strategic Report Governance Financial Statements
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
Lancaster Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
Launceston Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Leamington Spa Myton Road Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
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-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 |
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 |
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 |
Pentland 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 |
Project Blu Limited | Indirect | United Kingdom | Ordinary | 9 | 9 |
Pure Pet Food Ltd | Indirect | United Kingdom | Ordinary | 12 | 12 |
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 |
Pets at Home Group Plc Annual Report and Accounts 2024
166
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 |
Rushden Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Saffron Walden Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Salford 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 Drakehouse 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 |
Sidcup Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 100 |
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 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 |
Sydenham 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 |
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 |
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 | 50 |
28 Investment in subsidiaries continued
Investments in Joint Venture practices and other investments continued
Notes (forming part of the financial statements) continued
167
Strategic Report Governance Financial Statements
| Country of | At 28 March 2024 | At 30 March 2023 | |||
Company | Holding | incorporation | Class of shares held | % | % |
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 | 50 |
York Clifton Moor Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
York Vets4Pets Limited | Indirect | United Kingdom | Ordinary | 50 | 50 |
Pets at Home Group Plc Annual Report and Accounts 2024
168
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 UK-adopted
international accounting standards 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
theGroup.
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. The number and appropriateness of APMs presented in the financial statements has been reviewed
and reduced from the comparative period to those considered to be the most relevant for measuring the performance of the Group.
Consequently, APMs are used by the Directors and management for performance analysis, planning, reporting and incentive setting purposes.
All APMs relate to the current period results and comparative period where provided.
APMs considered by the business to be a key performance indicator are explained in more detail on page 8 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 and veterinary practices 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.
Underlying PBT: Underlying profit before tax (PBT) is based on pre-tax profit before the impact of non-underlying items, being 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.
Free cash flow: Net increase/(decrease) in cash before the impacts of dividends paid, share buybacks, investments, proceeds from new loans
and repayment of borrowings.
References to Underlying GAAP measures and Underlying APMs throughout the financial statements are measured before the effect of non-
underlying items.
APM Definition Reconciliation
Consumer revenue Consumer revenue being statutory Group revenue, less
Joint Venture veterinary practice fee income (which forms
part of statutory revenue within the Vet Group), plus
gross consumer sales made by Joint Venture veterinary
practices (unaudited).
Consumer revenue (£m) FY24 FY23 Note
Statutory Group revenue 1,476.6 1,404.2 CIS
Joint Venture fee income (89.3) (77.2) 2
Revenue by Group
managed practices
(44.6) (37.5) 2
Revenue by all veterinary
practices
563.6 492.9
Consumer revenue 1,906.3 1,782.4
CIS = Consolidated income statement
Consumer revenue cannot be directly referenced in the financial statements as revenue by all
veterinary practices relates to all Joint Venture customer revenue.
Like-for-like
revenue
Like-for-like revenue growth comprises total revenue in a
financial period compared to revenue achieved in a prior
period for stores, online operations, grooming salons and
veterinary practices that have been trading more than 52
weeks prior to the reporting date, excluding fee income
from Joint Venture practices where the Group has bought
out the Joint Venture Partners or will offer to buy out the
Joint Venture Partners in the future.
Not applicable.
Underlying profit
before tax
Underlying profit before tax (PBT) is based on pre-tax
profit before the impact of 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.
Underlying PBT (£m) FY24 FY23 Note
Underlying PBT 132.0 136.4 CIS
Non-underlying items (26.3) (13.9) CIS
Profit before tax 105.7 122.5
CIS = Consolidated income statement
Glossary – Alternative Performance Measures
169
Strategic Report Governance Financial Statements
APM Definition Reconciliation
Underlying basic
EPS
Underlying basic earnings per share (EPS) is based on
earnings per share before the impact of 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
theGroup.
Underlying basic EPS (p) FY24 FY23 Note
Underlying basic EPS 20.7 22.8 5
Non-underlying items (4.1) (2.3) 5
Basic earnings per share 16.6 20.5
Free cash flow Net increase/(decrease) in cash before the impacts of
dividends paid, share buybacks, investment movements,
acquisition and disposals of subsidiaries, proceeds from
new loans and repayment of borrowings.
Free cash flow (£m) FY24 FY23 Note
Net (decrease)/increase
in cash
(120.9) 12.0 CFS
Remove effects of:
Dividends 60.7 58.7 CFS
Proceeds from new loan - (123.3) CFS
Repayment of borrowings 75.0 100.0 CFS
Share buyback 50.3 50.3 CFS
Investment movements 1.4 – CFS
Acquisition of subsidiaries 1.0 0.5 CFS
Disposal of subsidiaries 1.5 – CFS
Free cash flow 69.0 98.2
CFS = Consolidated statement of cash flows
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 share-based payments subject
to tax, then adjusted for depreciation of PPE, right-of-
use assets and amortisation. GCI represents gross PPE,
right-of-use assets and software, and other intangibles
excluding the goodwill created on the acquisition of the
Group by KKR (£906,445,000) plus net working capital,
before the effect of non-underlying items in the period.
Net working capital movement is a measure of the cash
required by the business to fund its inventory, receivables
and payables. Payables includes trade and other payables,
income tax payable and other financial liabilities.
Underlying CROIC FY24 FY23 Note
Cash returns:
Underlying operating profit 145.5 149.7 CIS
Share-based payment
charges
5.9 4.9 3
151.4 154.6
Effective tax rate 25% 19%
Tax charge on above (37.9) (29.4)
113.5 125.2
Underlying depreciation
and amortisation
101.7 102.3 2
Cash returns 215.2 227.5
Gross capital invested
(GCI):
Gross property, plant and
equipment
444.7 405.3 11
Gross right-of-use assets 662.7 635.1 12
Intangibles 1,046.4 1,046.3 13
Less KKR goodwill (906.4) (906.4)
Investments 9.9 9.1
Net working capital: (106.7) (121.6) see definition
Receivables 60.9 51.8 17
Inventory 97.5 108.6 14
Payables (252.4) (265.2) CBS
Provisions (12.7) (16.8) 21
GCI (at period end) 1,150.6 1,067.8
Average 1,109.2 1,002.7
Underlying CROIC 19.4% 22.7%
Net cash/(debt) Cash and cash equivalents less loans and borrowings.
Net cash (£m) FY24 FY23 Note
Cash and cash equivalents 57.1 178.0 18
Loans and borrowings (48.3) (123.3) 19
Net cash 8.8 54.7
Pets at Home Group Plc Annual Report and Accounts 2024
170
APM Definition Reconciliation
Total indebtedness Net cash (above) less loans and borrowings plus
leaseliabilities.
Total indebtedness (£m) FY24 FY23 Note
Net cash (above) 8.8 54.7
Lease liabilities (380.8) (421.4) 12
Total indebtedness (372.0) (366.7)
Pre IFRS 16
leverage
Net cash (above) divided by underlying EBITDA less
expected rental charges pre IFRS 16.
Pre IFRS 16 leverage FY24 FY23 Note
Net cash (above) 8.8 54.7
Statutory operating profit 119.3 136.8
Underlying depreciation
of property, plant and
equipment
26.5 25.7 3
Underlying depreciation
ofright-of-use assets
65.1 66.8 3
Amortisation of intangible
assets
10.1 9.8 3
Non-underlying
depreciation of property,
plant and equipment
4.2 0.4 3
Non-underlying
depreciation of right-of-
useassets
3.7 0.7 3
Other non-underlying
itemsin EBITDA
18.3 11.8 3
Underlying EBITDA 247.2 252.0
Less:
Proforma rental charges
pre IFRS 16
(78.6) (79.9)
Underlying EBITDA (pre
IFRS 16)
1
168.6 172.1
Pre IFRS 16 leverage (0.1)x (0.3)x
1 Proforma rental charges pre IFRS 16 cannot be directly referenced in the financial statements as the
balance represents 52 weeks (FY23: 52 weeks) of rental charges for each lease held at the balance
sheet date.
Lease adjusted
leverage
Total indebtedness divided by underlying EBITDA.
Underlying EBITDA has been presented on a rolling
52week proforma basis.
Lease adjusted leverage FY24 FY23 Note
Total indebtedness (above) 372.0 366.7
Underlying EBITDA 247.2 252.0
Lease adjusted leverage 1.5x 1.5x
Glossary – Alternative Performance Measures continued
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Pets at Home Group Plc
Chester House
Epsom Avenue
Handforth
Cheshire
SK9 3RN
petsathomeplc.com
Pets at Home Group Plc Annual Report and Accounts 2024