Pets At Home Set For £275m Flotation

Pets At Home follows Poundland in announcing intention to join the London Stock Exchange.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Pets at home

Hot on the heels of Poundland‘s announcement, now Pets At Home has revealed its intention to float on the London Stock Exchange. Rumours of this IPO have long been swirling around the City, and management hope to raise around £275m to reduce its debt.

The UK’s leading specialist retailer of pet food, pet-related products and pet accessories is majority-owned by US-based private equity group KKR, and this morning’s statement also stated that some shareholders — including KKR — “may realise a part of their investment in the Company through the repayment of shareholder loans and/or a sale of new shares”.

Pets At Home current counts 369 stores across the UK, 246 small animal veterinary surgeries under the Companion Care and Vets4Pets names, and 116 in-store Groom Room grooming salons. It is the clear leader in a large market estimated at £5.4bn — its nearest competitor has 78 stores, while the five largest rivals combined own 223 stores, 146 less than Pets At Home at present, although it is targeting in excess of 500 stores, 700 veterinary practices and 300 Groom Rooms.

CEO Nick Wood commented:

“We have delivered consistently strong financial growth and since 2009 we have gained share across all segments of the market. Our performance has been further characterised by an unbroken track record of positive LFL performance over the last decade. Even after the investment made in the business, our operational cash flow has remained consistently strong.”

It appears to be a good time for the flotation, as the specialist retailer has announced 11.7% total revenue growth in the 40-week period to 2 January 2014 compared to the same period last year, following average annual revenue growth over the last three financial years of 9%.

While Pets At Home is unlikely to see the same rapid share-price rise as Royal Mail following IPO, certainly there are some encouraging underlying growth figures in the business. It’s often best practice to wait until after a company floats, though, to buy in if you’re interested, in order to avoid the precipitous rises and falls that come with early buying and selling.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Sam does not own shares in any company mentioned.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »