宠物之家：兽医集团支撑强劲的中期增长

2025A2026E2027E1,482.11,524.01,587.90.8x0.8x0.8x247.6233.8241.94.9x5.2x5.1x Andrew Wade * | Equity Analyst44 (0) 20 7029 8012 | awade@jefferies.comGrace Gilberg * | Equity Analyst+44 (0)20 7029 8356 | ggilberg@jefferies.com The Long View: Pets at HomeInvestment Thesis / Where We DifferGrowing share in a growing market.Pets at Home has been a serialshare winner, building from 18% to 25% in 5 years. It also operates infundamentally attractive markets that are resilient and set to grow at c.4%in the MT.Opportunities in Retail and Vet.We believe PETS has a range of growthdrivers - cross-selling and share-of-wallet in Retail, the maturity tailwind, roll-out, and new investments in Vet.We forecast robust profit growth into the MT.While significant headwinds(consumer cyclical and opex inflation) will continue to weigh into FY26, wesee PETS returning to growth in FY27 and continue to believe the group candeliver high single-digit profit growth in outer years.Base Case,340p, +30%Our SOTP-based PT is based on:•Retail on 12.5x FY26e PE, in line with the UKRetail sector mid-cycle average.•A DCF of the Vet business that assumesgrowth to c.£60m of FCF by FY26, terminalgrowth of 2%, and a discount rate of 7.5%•Central costs on a blended multiple weightedtowards Retail.From this, we derive a market cap of £1.6bn andour PT of 340p. The small increase from ourprevious PT (325p) reflects the stronger cashgeneration profile being delivered by the VetGroup.Sustainability MattersTop material issue(s): Supply Chain Mgmt and Human Rights & Community Relations.Sourcing,particularly bulky pet food, involves fuel usage and an elevated carbon footprint, while accessoriescan contain a high proportion of plastic. Pet care businesses have the potential to positively impactsociety, given the reported benefits of pet ownership. Risks: brand appeal, legislation.Company target(s):1) reduce scope 1, 2, and 3 carbon emissions by 42% by 2030, and by 90% in2040; 2) 100% recyclable packaging by 2028 (currently c.80%); 3) create/protect/restore 15k acres ofUK woodland by 2028; 4) educate 2m children in responsible pet ownership by 2030.Questions to management:1) What financial implications do you foresee from achieving the ESGtargets you have set out? 2) What makes you confident that they go far enough, in the scope ofcategory and level of targets? 3) What are you doing to actively support the societal benefits of petownership?Please see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,400p, +52%Our upside SOTP-based scenario is based on:•Retail on 16x FY26e PE, consistent with thehigher-rated international peers•A DCF of the Vet business that assumesgrowth to c.£60m of FCF by FY26, terminalgrowth of 3%, and a discount rate of 7.5%•Central costs on a blended multiple weightedtowards retailFrom this, we derive a market cap of £1.9bn andour upside PT of 400p. Downside Scenario,200p, -24%Our downside SOTP-based scenario is based on:•Retail on 8x FY26e PE, consistent with ex-growth UK retail comparators•A DCF of the Vet business that assumesgrowthc.£60m of FCF by FY26,terminalgrowth of 0%, and a discount rate of 10%.•Central costs on a blended multiple weightedtowards retailFrom this, we derive a market cap of £0.9bn anda downside PT of 200p.Catalysts•Q1'26 trading update: 31 July 2025 2 Table 1 - Divisional forecast breakdown.£mRetailRevenueLFL%chgPBT% marginVetRevenueLFL%chgPBT% marginCentralRevenuePBTGroupRevenue%chgPBT% marginSource: Company data, Jefferies estimatesTable 2 - Summary P&L.PETS (y/e march), £mGroup RevenueLFL (%)Space (%)Growth (%)Group GPGross margin (%)chg (%)Opexchg (%)sales (%)Underlying EBITchg (%)sales (%)ExceptionalsReported EBITD&Asales (%)Underlying EBITDAchg (%)margin (%)Finance income/(expense)Underlying PBTchg (%)margin (%)Tax - adj.% rateDilNoShEPS (p) underlying, dilutedDPSSource: Company data, Jefferies estimatesPlease see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Table 3 - Summary cash flow.PETS (y/e march), £mEBITDAWorking capital(Decrease)/increase receivables(Increase)/decrease inventoriesIncrease payablesIncrease/(decrease) provisionsIncrease/(decrease) other WCTaxes paidShare-based paymentsOtherCash Flow from OperationsProceeds from sale of PPEInterest receivedCosts to acquire ROU assetsAcquisition of subsidaries (u/l)Acquisition of subsidaries (non-u/l)Disposal of subsidiariesCapexCash Flow from InvestingEquity dividends paidDebt issue costsCapital lease paymentsPurchase of own sharesInterest paidInterest paid on lease obligationsProceeds from issue of ordinary share capital & buybacks0.0OtherCash Flow from FinancingPre-exceptional Free Cash FlowMovement in cashFinancial net cash/(debt)Source: Company data, Jefferies estimatesPlease see important disclosure information