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Pets at Home -one for pet lovers?

Pets at Home Group is one of the few upcoming IPOs that will be open to retail investors. A “pre-announcement” that gives some details of the float has already been issued.

Financial information so far supplied is not detailed but revenue was £598 last year from 369 retail stores and 246 small animal veterinary surgeries. The retail stores often include in-store grooming salons (for pets of course, not their owners). The business is currently owned by KKR and they seemed to have geared up the company with a high level of debt, but that will be reduced by using funds raised by the IPO to reduce net debt to £275m.

A raft of four new non-executive directors have been appointed including Dennis Millard as Deputy Chairman who is Chairman of Halfords and Chairman of Smiths News plus is a director of Debenhams and Premier Farnell. There is of course a connection in that the former CEO of Pets at Home, Matt Davies, became CEO of Halfords in late 2012. He was credited with doing a great job of developing Pets at Home at the time.

Mr Millard owns two dogs it is revealed, and the pet ownership of all the directors is given. Indeed their pet ownership is itemised if not to the extent of telling us their names, but it is all rather peculiar. However the Chairman, Tony DeNunzio, seems to be pet free. Indeed 93% of Pets at Home’s colleagues (i.e. staff) are pet owners and collectively they own 23,000 pets. All this detail on pets in the company might interest some investors but the pre-announcement is short of the kind of basic information most intelligent investors want.

One looks forward to reading the prospectus and about their VIP customer Club (Very Important Pet Club in case there is doubt). But retail investors will need to take care with this one.

Roger Lawson

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