Pets at Home has posted a drop in first-half profitability as group chief executive Ian Kellett prepares to exit the business.
The pets specialist said statutory pre-tax profit fell 11.3% to £40.8m in the 28 weeks to October 12, despite a 3.9% increase in like-for-like revenue across the group.
Merchandise like-for-likes climbed 3.1% year on year, driven by multichannel investments, innovation in its accessories ranges and changes in its pricing strategy.
Pets at Home’s services like-for-likes grew at the much faster rate of 9.5%, as total income from joint venture vet practices climbed 16.1% to £28m and specialist referral centres increased revenues at double-digit levels.
However, the retailer’s gross margin slipped 198 bps to 51.9% during the period.
Pets at Home’s results came as it revealed that chief executive Kellett was stepping down after less than two years at the helm.
The retailer said Kellett is quitting to “pursue his own personal business interests” and will depart on May 31, 2018.
He will be succeeded as group chief executive by Peter Pritchard, the current chief executive of Pets at Home’s retail division.
Pritchard joined Pets at Home as commercial director in 2011 and was promoted to chief executive of retail in 2015.
He has overseen the establishment of Pets at Home’s sourcing office in China, the launch of its VIP club and the repositioning of its merchandise business.
Kellett said: “Having spent the past 12 years with Pets at Home, I feel very fortunate to have worked in such a special business with some amazing people. I am proud to have been part of transforming the group from its retail roots into the much wider services and omnichannel business it is today.
“The actions we have taken this year to reposition Retail pricing have landed well, and we have a clearly defined plan that will deliver further results. It is with this in mind that I feel able to move on and pursue my own personal business interests, which will provide me with a different type of challenge at this point in my career.”
Chairman Tony DeNunzio added: “Peter has steered the retail business for a number of years and has been responsible for the launch of some highly successful initiatives, and I am confident he will provide strong leadership to the group.
“I want to thank Ian for his long tenure at Pets at Home, having successfully led multiple areas of the business in his roles as chief financial officer, within retail, and as group CEO.”
Since the end of its half-year, Pets at Home said it has launched its first “convenience store format”, inside a Tesco Extra store in Durham.
The shop, which will operated by Pets at Home staff, will focus on its private label food, advanced nutrition and accessories ranges.