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Pets at Home share price soars as watchdog rumours spark interest from private equity

2025-07-15 18:09:29 By

Shares in Pets at Home surged by over 14% this morning amid growing signs that the UK's competition watchdog is leaning towards a favourable outcome for the industry.

Additionally, there's speculation that private equity firm BC Partners is gearing up for a bid, as reported by City AM.

According to FT Financial News, a series of 'bidcos' with 'pug' in their names were registered on 24 February, fuelling rumours they might be set up to make an offer for the pet retailer.

The Cheshire company's share price has recently been under strain due to an ongoing Competition and Markets Authority (CMA) investigation into the veterinary sector, which has raised investor concerns about potential stringent regulations.

However, analysts at Jeffries have indicated that any changes are "likely to be largely limited to improved transparency and regulation", boosting confidence that price controls will not be enforced.

The CMA's inquiry, which has garnered over 56,000 public and industry responses, is scrutinising the UK vet industry following worries that pet owners may not be receiving value for money.

This includes issues such as being overcharged for medications and concerns that consolidation by larger practices could diminish market competition.

For Pets at Home, the outcome of this investigation is crucial, as its recent growth has been propelled by its veterinary services, which saw a like-for-like increase of 19.9% in the 12 weeks leading up to 2 January, while retail revenue dipped by 2.8% during the same timeframe.

The latest papers published on the probe by the CMA, dated February 6, raised concerns about the limited choice of services for customers and noted that the cost of veterinary services has increased more rapidly than inflation.

However, analysts at Jefferies have pointed out that profit margins in the sector remain "largely unchanged," and they believe it is improbable that the CMA will introduce widespread pricing control measures.

"Our expert is optimistic about the outlook for the sector, believing that the trading headwinds are 'transient' and that, once the overhang of the CMA investigation is cleared, the industry will have much greater clarity on how it can progress and be profitable," stated Jefferies.

The animal care market is substantial and expanding; in 2022, UK consumers spent nearly £10bn on pet-related products, which is almost double the amount from a decade ago.

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John Lewis scraps staff bonus for third year in a row despite tripling profit

Despite nearly tripling its profit, the John Lewis Partnership has decided to forgo its staff bonus for the third consecutive year. The company, which owns both John Lewis and Waitrose, informed markets that its pre-tax profit surged from £42m to £126m over the 52 weeks to 25 January, as reported by City AM. Total sales increased by three per cent year on year, rising from £12.4bn to £12.8bn, while the firm's operating profit margin improved by 0.9 percentage points to two per cent. John Lewis revealed plans to "step up" its transformation plan this year, supported by a self-funded investment of £600m. This will encompass "store refurbishments and openings, technology upgrades, and supply chain modernisation." The company also intends to invest £114m in staff pay. These two investments mean its annual bonus will be scrapped this year-for the third year in a row. At Waitrose, sales grew 4.4 per cent to £8bn and volumes were up 2.6 per cent. Adjusted operating profit was £227m, up £122m year on year. Sales at John Lewis remained flat at £4.8bn, while adjusted operating profit was £45m. "These are solid results... we have made good progress," Chair of JLP Jason Tarry said. "Looking forward, I see significant opportunity for growth from both our Waitrose and John Lewis brands." Chairman designate Jason Tarry stated: "Our focus will be on enhancing what makes these brands truly special for our customers. This will involve considerable catch-up investment in our stores and supply chain, underpinned by a strong focus on the core elements of great retail, delivered by our brilliant Partners." "I am confident with the transformation momentum in the Partnership, we remain well placed to drive further growth in the year ahead and over the longer term," he continued. Chief Executive Nish Kankiwala, who is set to leave this year after a two-year tenure, commented, "both brands are showing momentum." Kankiwala also stated, "Tripling our profit is a significant testament to the progress of our transformation – focused on delighting customers while continuing to deliver efficiency improvements, thereby laying the foundations for long-term sustainable growth." Julie Palmer, partner at Begbies Traynor, called the results "encouraging." "However, there remains a long road ahead if the retailer is to win back the market share it lost to M&S and other rivals in the battle for Middle England's consumers," she added. "New Chair Jason Tarry is certainly sounding the right notes. The opening of new Waitrose stores, the reintroduction of John Lewis' 'Never Knowingly Undersold' guarantee, and an inflation-beating £114m investment into staff pay, should all bode well for the partnership.

Yeo Valley snaps up gourmet yoghurt maker The Collective

Somerset dairy company Yeo Valley has acquired fellow yoghurt producer The Collective for an undisclosed sum. The Blagdon-based business has struck a deal to take over Epicurean Dairy (UK) Ltd in the UK. The Collective was first established in New Zealand by chefs Angus Allan and Ofer Shenhav, and within 10 months was the country's best-selling selling gourmet yoghurt. The business launched in Britain in 2011 after the pair teamed up with the late Mike Hodgson, former managing director of pudding company GU, and its sales director Amelia Harvey. The Collective makes a range of products including its popular 'Suckies' pouches for children and Greek-style pots with a layer of compote for adults. These will join Yeo Valley's portfolio which includes milk, kefir, butter and yogurt and ice-cream. Rob Sexton, chief executive at Yeo Valley Production, said: "We are delighted to welcome The Collective to the Yeo Valley Production family. The Collective brand is renowned for never compromising on the quality and market-leading taste of its products. Add this to the values of the business, encapsulated in its B-Corp accreditation, and we see this as a perfect fit with Yeo Valley Production. "This agreement will ensure The Collective brand continues to deliver taste-led innovation and great value. Together, we have ambitious plans to drive growth of delicious British dairy. It’s an exciting new chapter for us all." Sarah Smart, chief executive at The Collective UK, said Yeo Valley Production was a "long-time partner" of The Collective and had been "integral" to the brand's growth journey. "The close alignment of the businesses values and visions to deliver natural, healthy, great tasting and sustainable food that is better for people and planet, makes Yeo Valley the perfect home for the next stage of The Collective's growth," she added. “I look forward to The Collective building on this success further and continuing to deliver more great tasting innovative dairy to British fridges.” Law firm Thomson Snell & Passmore advised Epicurean Dairy Holdings on the sale.

Applied Nutrition seals USA and Holland & Barrett deals as its Coleen Rooney range expands across UK

Health and wellness brand Applied Nutrition has announced three new American deals – and an expanded partnership with Holland & Barrett that will see its new Colleen Rooney range go on sale in hundreds of UK stores. Knowsley-based Applied Nutrition has agreed a joint business plan with Holland & Barrett that will see the health and wellbeing retail chain increase the distribution of currently listed products and take a range of new ones. The Mersey firm said: “The first order under the new JBP was received this month and included the new Coleen Rooney range, which will be available in 500 stores” The deal will also see Holland & Barrett get early access to Applied Nutrition’s new products in development, allowing them to get products to their shelves more quickly. Applied Nutrition hopes the deal will treble its revenue from Holland & Barrett, already one of the group’s largest customers. In the USA, Applied Nutrition has secured deals with GNC Corporate, one of the largest specialty retailers in the US, Hy-vee, the largest regional grocery chain in the Midwest, and leading Texan grocery chain H-E-B. Applied Nutrition products will now go on sale in more than 1,000 new stores across the country, and the group says the deals “are expected to start contributing to revenue during H2 FY25 with an annualised spend of $3m”. Thomas Ryder, CEO of Applied Nutrition, said: “It is great to see such momentum with existing and new customers, further reinforcing the growth potential of the business. Not only are we significantly strengthening and growing our trade with existing key valued partners such as Holland & Barrett we are also securing new listings from major retailers in the US which is a key growth market. We look to the future with confidence and we remain focused on driving profitable growth throughout H2 and beyond.”

Takeaway owner says next month will be 'Armageddon' as NI and rates increase

The owner of a new sandwich shop in Birmingham says next month could be 'Armageddon' for the food and drink sector thanks to the imminent national insurance hike and rising rates. From April 1, national insurance contributions (NIC) will increase from 13.8% to 15%, affecting businesses with employees earning over £5,000. Additionally, the Retail, Hospitality and Leisure Business Rates Relief scheme is set to reduce business rate discounts from 75 to 40 percent. In anticipation of these changes, Harrington's Gourmet Sandwiches, has revised their menu prices. Owner David Dindol told Birmingham Live : "I'm very scared, April 1 is going to be Armageddon." He also mentioned that wage increases at sister venue Missing Bar would necessitate price hikes, a move expected by many businesses in the hospitality sector. Mr Dindol added: "We're hiring more part-time staff and the rate relief scheme has been a big hit on us as well." Concerns extend beyond Harrington's, with social media indicating that several pubs may close their kitchens due to the financial strain. Mr Dindol warned against entering the hospitality industry, saying: "Hospitality is a minefield and if someone said to me they wanted to own a pub, I'd say don't." The Labour decision has also drawn criticism from two Birmingham landlords outside of Harrington's. Gary McDonnell of Hennessey's sharply criticised the policy, claiming it will "kill pubs". Meanwhile, Nigel Barker of The Wellington confirmed that the pub would be raising its prices, describing the move as "a really poor decision from the Labour government."

Shoe retailer Office doubles profit to over £100m as it creates hundreds of jobs

The group that operates shoe retailer Office has reported a significant hike in profits, surpassing £100m as it continued to expand with new store openings and created numerous jobs. In the year leading to 30 June, 2024, the business— which also owns Offspring— declared a substantial pre-tax profit of £102.4m, as reported by City AM. This announcement marks considerable growth from the previous financial year's pre-tax profit of £47.7m. Office has witnessed a consistent profit increase since recording a pre-tax loss of £131.9m in June 2020, followed by a loss of £114m the preceding year. According to freshly submitted records at Companies House, the group saw an upsurge in revenue from £265.3m to £294.3m. By the close of the financial term, the group was running a total of 75 stores, an uptick from 70, as well as 11 concessions throughout the UK and Republic of Ireland. Furthermore, the average headcount in the group rose from 1,617 to 1,830 employees over the year. With an ambitious eye on further expanding its retail presence, Office has stepped up plans for opening additional stores. The board, in a statement, noted: "Trading conditions were much improved in the period under review." The board observed, "Although still negative, consumer confidence has improved steadily since the start of the period." They also commented on the ongoing fiscal pressures, stating: "However, consumer spending remained under pressure as a result of the fall in real disposable incomes that the UK has experienced since late 2021 combined with relatively high interest rates and modest economic growth." Despite facing macroeconomic headwinds, the board highlighted the robust performance of their product category, concluding that "Despite the macro challenges, the branded fashion footwear sold by Office proved to be a resilient category and traded well throughout the period. "The group continued to invest in its new store development and remodelling programme throughout the period, adding eight new stores to the portfolio, closing three and renovating, relocating and extending three further stores. "The investment in stores has been a success as they have exceeded the group's trading expectations and capital expenditure investment criteria." Regarding its future prospects, Office stated: "Economic growth forecasts for the UK have been raised for 2025, with the retail sector expected to experience tailwinds from improving sentiment, age increases again outpacing inflation, the prospect of further interest rate relief and the sustained low inflation environment. "Office will continue to leverage its strong relationships with the world's leading footwear brands, its loyal customer base across the Office and Offspring brands and ongoing investment in digital marketing. "Growth in the year ahead will be driven by a strong online presence and the expansion of the Office store portfolio through new store openings and the remodelling and extension of existing stores in strategic retail locations." Office was founded in 1981 and was acquired at the end of 2015 by South African clothing retailer Truworths. The latest accounts for Office come after City AM reported in November 2024 that rival Schuh had created almost 400 jobs in its latest financial year to push its headcount past where it was before the Covid-19 pandemic struck. The turnover of the footwear retailer, headquartered in Scotland, also saw an increase from £354.4m to £380.8m, while its pre-tax profit leapt from £13.4m to £21m. In May 2024, City AM reported that despite its revenue increasing to nearly £1bn during the year, Clarks suffered a loss of almost £40m in 2023. The historic company, based in Somerset, reported a pre-tax loss of £39.8m after making a pre-tax profit of £35.9m in the 48 weeks leading up to the end of 2022.

Liverpool confirm 'multi-year' Adidas kit deal as Reds target big revenue hike

Liverpool have announced that Adidas will become their new kit partner from the beginning of the next season, following the conclusion of their current agreement with Nike at the end of the 2024-25 campaign. Reports from October indicated that the German sportswear brand had secured the tender to collaborate with the Reds, outbidding rivals including the incumbent kit supplier Nike and competitor Puma. The club has now revealed a 'multi-year deal', which is understood by the Liverpool Echo to span five years. It will be the third deal Liverpool has had with Adidas. The Reds anticipate a revenue boost from this new alliance. CEO Billy Hogan said: "Everyone at the club is incredibly excited to welcome Adidas back into the LFC family. "We have enjoyed fantastic success together in the past and created some of the most iconic LFC kits of all time. Adidas and Liverpool share an ambition of success and we couldn't be more excited to partner together again as we look forward to creating more incredible kits to help drive on pitch performance. We'd like to thank Nike for their support over the last five years and wish them well for the future." The partnership is set to commence on August 1, 2025, with Nike's designs being worn until the end of this season. In the past, new kits have often been unveiled before the season's end. However, with Liverpool on the cusp of a Premier League title and still vying for UEFA Champions League success, Nike aims to capitalise on the brand's exposure and partnership until the very end. Liverpool and Adidas have collaborated during some of the club's most triumphant eras and iconic trophy wins, initially from 1985-1996 and again from 2006-2012. During this period, the Reds secured numerous accolades, including three top-flight domestic league titles and three FA Cup victories. Bjørn Gulden, Adidas CEO, stated: "We are extremely excited that adidas and Liverpool Football Club are teaming up once again. The club is one of the biggest and most iconic names in world football with a huge fan base. "The jerseys worn during previous partnerships are some of the greatest ever created. We are honored to once again provide the players with cutting-edge technology to perform at the highest level and are looking forward to creating more classics for the fans." Although the deal's value to the Reds has not been disclosed, it is reportedly in the vicinity of £65million-plus, placing the club in the same guaranteed earnings bracket as Arsenal, Manchester City, and Chelsea. Furthermore, the potential for a percentage of LFC/Adidas merchandise sales could increase the deal's value even more. The club entered into a deal with Nike in 2019 for a fixed £35million per year. While the guaranteed annual sum was significantly lower than their competitors, it was substantially boosted by an additional 20% of sales from LFC/Nike merchandise reverting to the club, pushing the annual income beyond £60million. Liverpool have capitalised on relationships with such luminaries as Fenway Sports Group partner and basketball legend LeBron James, resulting in a special merchandise line, while a range with Nike's sister brand Converse was also launched. Last week, UEFA published its annual European Club Finance and Investment Report, which examines financial trends across the continent's football landscape and sheds light on some of the unseen factors that contribute to fielding a successful team. According to the latest report, Liverpool's kit and merchandising revenue generated €146million (£122.7million), slightly edging out Manchester United who sit in fifth place. For Liverpool, this meant that kit and merchandising revenue accounted for 19% of total revenue for the 2023-24 financial year - an increase of 11% compared to the same period 12 months earlier. Details of the new Adidas Liverpool kits - home and away - will be unveiled via club and Adidas channels and will be available for purchase from August 1, 2025.

Historic Coventry shop to close after 100 years as owner says 'retail is also not as nice as it used to be'

A historic Coventry shop is set to close its doors permanently after more than a century in business. Tobacconist and lighter repair specialist Salts was founded by Harry Salt in Parkside, Coventry, in 1916 before relocating to New Union Street in 1961.It was run by the Salt family until it was taken over by Mark Kendall in 2019. Mark, a Coventry local, said he was "really sad" about the impending closure on March 29. He revealed that the decision to shut down was reluctantly made due to several factors. In an interview with Coventry Live, 49 year old Mark said: "Footfall never came back after COVID. Retail is also not as nice as it used to be because there are the issues of break-ins and theft and all those things that happen in city centres to retailers." He also highlighted the challenges posed by the illegal tobacco trade in the city. He said: "Coventry is rife with illegal stuff so the people selling it legally cannot compete." Despite the sadness surrounding the closure, Mark said he had relished his time at Salts. He said: "I have loved it! I always wanted to run a shop, so I have really enjoyed it." Customers have been sharing their 'fond memories' of visiting Salts. Many nostalgically recalled trips to the city centre with their grandparents many years ago, Mark said. He added: "It is quite generational, so a lot of people have fond memories of relatives, they used to come here as children with their grandparents, so obviously it holds a lot of sentiment... and a lot of granddaughters and grandsons just remembering when times were more simple, and you remember stuff about your childhood and your now-departed relatives, so a lot of moments for people." Mark added: "We have had a blast! Thanks for all of the support we have had from our regulars, they will be missed."

Domino's UK announces new chair and reports mixed financial results for 2024

Domino's Pizza Group, the UK arm of Domino's Pizza Inc, has announced the appointment of a new Chair who will assume the role in April. The company also reported a slight decrease in revenue but saw higher sales and an increased dividend, as reported by City AM. In the 52 weeks leading up to December 29, sales rose by two percent to £1,571.5 million, up from £1,540.5 million the previous year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) for the firm, which operates in both the UK and Ireland, climbed by 6.4 percent to £143.4 million. However, revenue dipped by 0.4 percent, from £667 million to £664 million, while profit after tax fell sharply by 21.6 percent to £90.2 million. Domino's attributed the significant drop in post-tax profit to the comparative base of 2023 when the company divested its stake in a German joint venture, receiving £79.9 million. The company proposed a final dividend of 7.5p per share, increasing its total 2024 dividend by 4.8 percent year-on-year to 11p. CEO Andrew Rennie commented on the results: "Today's results show the benefits of our long-term strategy," adding, "We've capitalised on our competitive strengths, agreed a new five-year framework with our franchise partners and opened 54 stores." Rennie also noted that "Our trading momentum accelerated as the year progressed, our delivery channel returned to growth and we delivered strong underlying earnings growth." Domino's is focusing on store and digital expansion, aiming to achieve £2 billion in sales from over 1,600 stores by 2028. Despite this, analyst Dan Lane from Robin Hood cautioned: "Uncertainty seems to be the theme today at Domino's." Shares in the UK division of Domino's Pizza appear to be significantly undervalued when compared to its US counterpart, making it one of the most shorted stocks in the UK market. "To get back into the market's good books, profits really need to start motoring under the new five-year framework. If they don't, investors are likely to pile even more pressure on the pizza brand," stated Lane. Domino's expects that its underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) for 2025 will align with current expectations of the market. In other news, Domino's has declared the appointment of Ian Bull as the new Chair of the company, effective post-AGM on April 24, 2025. Bull, who took up the role of Senior Independent Director at Domino's in September 2019, has a rich background serving as CFO across various leisure and hospitality businesses, such as Greene King, Ladbrokes, and Parkdean Resorts. Matt Shattock, the outgoing chair who has served for five years and is based in the US, highlighted the need for a UK-based chairmanship at Domino's. Ian Bull expressed his anticipation for his upcoming tenure, "Domino's today is a very different business to five years ago and Matt's guidance and leadership have been hugely valuable, helping stabilise the business initially and moving it onto the strong footing for future growth it has today." Bull further shared his enthusiasm, saying, "I'm delighted to be stepping into the role and look forward to working with my fellow Board members, our CEO Andrew Rennie and all our team members and franchise partners as we take the business to the next level."

Hellofresh issues stark sales warning after opening UK site shut and 900 jobs at risk

Hellofresh, the recipe box delivery firm based in Germany, has issued a warning that its sales are likely to drop this year. However, it anticipates an increase in profit as it prolongs its cost-cutting initiative, as reported by City AM. The company announced in the latter half of 2024 that its cost-saving programme would be extended until 2026. Hellofresh predicts a decrease in revenue, on a constant currency basis, of between three and eight per cent in 2025. Despite this, the firm aims to boost its adjusted earnings before interest and taxes (EBIT), excluding impairment, to between €200m (£168.6m) and €250m, a rise from €136m in 2024. It also expects its adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) to increase to between €450m and €500m in 2025. In a statement, the group said it concluded 2024 "with a strong financial profile that is reflective of the company's focus on pursuing higher profitability and cash flow generation over volume growth". For the past year, Hellofresh reported an adjusted EBITDA of €399.4m, a decrease from the €447.6m it achieved in 2023. Group revenue totalled approximately €7.66bn in 2024, representing a 0.9 per cent year-on-year growth on constant current terms. Dominik Richter, co-founder and CEO of Hellofresh, stated: "In H2 2024 we entered an efficiency reset period." "After five years of solid progress, highlighted by a 34 per cent revenue CAGR and an almost 9x increase in AEBITDA, we are now pursuing the next stage of our strategy." "This stage is initially marked by having to rightsize our cost base across all major categories and improve our unit economics." The company further underscored its commitment to fiscal management: "Driving strong AEBIT and free cash flow performance will enable us to make strategic investments in our product quality, variety and deliciousness in 2025 and beyond." Additionally, enhancing customer relations is a priority: "We are confident that levelling up the customer experience and product will contribute to higher retention of existing customers, and to unlocking new customer segments for the group." Hellofresh is set to announce its full set of results for 2024 on Thursday, 13 March. As reported by City AM towards the end of October 2024, there were plans to shut down one of Hellofresh’s significant UK sites, jeopardising 900 jobs. The Nuneaton distribution facility is expected to continue operations until mid-2025. This 237,000 sqft establishment, inaugurated in 2020, was Hellofresh's second location. Previously, in a month before, City AM disclosed that Hellofresh UK notably reduced its pre-tax loss as it approached the £500m turnover milestone and decreased its workforce by 15 per cent. For 2023, the company posted a pre-tax loss of £755,000 in its Companies House accounts, improving from a loss of £22.1m in 2022. During the same timeframe, the company's turnover rose from £468.4m to £489.9m. The results also revealed a decrease in Hellofresh UK's average workforce from 2,159 to 1,842 within the year.

Government approves controversial M56 Tebay-style service station despite local opposition

Controversial plans to build a large service station on the M56 modeled after the popular Tebay Services have received approval from Housing and Planning Minister Matthew Pennycock. The project, situated on a 39-acre site, will feature a fuel station, farm shop, and a 100-bed hotel, and should create 300 jobs. But it faced strong opposition from Trafford's Green councillors and local residents, who argue it will negatively impact businesses in nearby Altrincham, Sale, and Hale Barns on the Cheshire border. The plan, a collaboration between Tebay services owner Westmorland and the Tatton Estate, was first approved in October 2023, but then called in for a public inquiry due to concerns over the use of the site's Green Belt land. In response to the decision, campaigner Bill Dixon said "I am very disappointed because the minister insisted that the service station should not be a destination in its own right, but, in my view, it will be as all the evidence shows. "It will cause traffic chaos on the A556-M56 junction and do enormous harm to businesses in Altrincham. It's a sad day for Trafford." At the time the application was submitted, Green councillors on Trafford's planning committee had also spoken out against the plans. In a letter confirming the decision, Mr Pennycock concurred with the planning inspector's conclusion and recommendation that the requirement for a motorway service station in the region was 'indisputable' and there was no feasible alternative site. Those against the decision have a six-week window to apply to the High Court if they wish to contest the ruling. The main issues at the inquiry included the need for the motorway service area (MSA), the economic impacts and the impact on the green belt. The report from the Secretary of State says: “The Secretary of State agrees with the inspector’s conclusion that the need for a MSA on this part of the strategic road network is indisputable, that the proposal would reduce a significant number of gaps and reduce others, and that there is no realistic prospect of an equivalent alternative site. “She further agrees that the safety and welfare benefits endorsed by National Highways should be given substantial weight.” Examining the local economic impact, the report adds: “The Secretary of State agrees with the inspector’s conclusion that the extent to which the proposal would be likely to act as a local destination in its own right, as opposed to a destination of choice for motorists making a long journey on the strategic road network, would be extremely limited. “There is no basis to conclude that it would result in unsustainable patterns of travel in general.” The report also says she agreed the economic and social benefits, taking account of any potential minor effects on nearby centres, ‘are such to merit substantial positive weight’.