Pets at Home reveals Brexit stockpiling as vet practices face possible closure
Pets at Home has revealed action to stockpile pet food and products worth millions of pounds ahead of Brexit as it announced 30 vet practices are set for possible closure.
New chief executive Peter Pritchard, who took on the top job in May, told the Press Association the group has already imported goods worth a “couple of million pounds” as part of no-deal Brexit contingency plans.
The group warned that 17% of its goods come from outside the UK, and said its stock supply could be disrupted in the event of delays at ports and borders under a no-deal Brexit scenario.
Mr Pritchard said: “We don’t want families to run out of food for their pets.”
Details of its no-deal Brexit planning came as he outlined aims to overhaul the group’s chain of veterinary practices after rapid expansion in recent years.
The firm plans to buy out 55 joint venture vet practices from the 471-strong Vet Group chain, with around 25 of them becoming company-managed practices and the remaining 30 under review for closure.
Pets at Home reported pre-tax profits crashing 80.5% to £8 million in the six months to October 11 after taking costs of £29 million relating to the Vet Group plans and warned over its full-year results.
The group’s Brexit plans see it join a growing list of major firms launching contingency efforts amid mounting fears that Theresa May will not get the parliamentary support for her EU withdrawal deal.
Topps Tiles also revealed on Tuesday aims to begin stockpiling key products ahead of Brexit, following recent confirmation of similar plans from the likes of Mr Kipling cakes firm Premier Foods, Majestic Wine and catering giant Compass.
On the Prime Minister’s Brexit deal, Mr Pritchard said: “The most important thing is that business needs clarity.
“We can cope as long as we know what (the deal) is.
“We just want clarity and certainty.”
Pets at Home is also worried over the impact of Brexit on its workforce, with a “significant” number of employees from the EU – in particular its vets and distribution centre staff.
“Brexit may result in changes to UK immigration policy which increases the risk around the availability, recruitment and retention of these individuals,” the group said.
The group’s overhaul of the vet arm may also see up to 300 staff impacted should the 30 practices close, but Mr Pritchard said the group aims to redeploy nearby where possible.
He said the overhaul was not down to a poor performance of the division, which grew revenues by 15.4% over the half-year, but the need to “rebalance” after rapid expansion.
He said: “I recognise we have grown at pace and, more recently, have seen the pressure that rising costs and our fees are placing on this young business.”
He added: “Yes, we have opened an awful lot of practices and, yes, we have got a small number of those wrong.”
Of the practices under review, Pets at Home said it will look to pay off outstanding debts, settling any liabilities for third-party bank loans and leases on behalf of the practice.
The group’s half-year results showed that on an underlying basis and with costs of the vet plans stripped out, half-year pre-tax profits fell 9.3% to £37.9 million.
Pets warned it is now expecting lower full-year underlying pre-tax profits, forecasting at least £80 million to £85 million.