Hello, and welcome to the Q3 FY 2021 trading statement call for Pets at Home Group PLC. Participants will be in a listen-only mode for the first part of the call, but will be able to ask questions later in the call and should indicate their desire to do so by pressing star one on your keypad. I'd now like to turn the call over to the chairperson for today's call, Peter Pritchard, Group Chief Executive Officer. Please go ahead, sir. Thanks, Emma. Good morning, everyone, and thank you for joining our call this morning, and I hope you're keeping safe and well in these really challenging times. We're pleased to share with you our Q3 trading update for our financial year 2021. I'm Peter, the Group CEO, and with me today is Mike, our Group CFO. Our quarter three covers a 12-week period from the 9th of October to the December 31st, 2020, and therefore captures trading over Christmas as well as a second national lockdown in England across four weeks of the quarter. As an essential business, we've remained open throughout the pandemic, and our operations are well adapted to the world that we now live in. This is reflected in the update we're giving today, and I'm pleased to say that our performance continues to be strong. That's right across the group, demonstrating the ongoing success of our pet care strategy. Our update today highlights five key things at Pets at Home and the market in which we operate. First, the pet care market is robust and is in good health. Our group revenue increased by 17.6% in the quarter on a like-for-like basis, despite ongoing COVID restrictions on both a regional and a national level. All parts of the group are seeing good growth. Our retail operations are growing at 17.5% on a like-for-like basis, and our vet group is up 17.8%. Retail sales growth was broad-based across categories and across channels. While accessories performed strongly, in part driven by new pet ownership, we've also seen good underlying strength within food sales, which is, of course, a good indicator of growth in customer numbers. Trading across the festive period as a whole was strong with like-for-like sales in December up 19.3%. Both core and seasonal accessories are selling and were selling particularly well across that quarter. Turning to our Vet Group, we saw total revenue growth of 22.1% in the quarter, again, with a particularly strong performance over December. Customer revenues remain the most important indicator of the underlying health of our joint venture estate. Like-for-like customer sales across all first opinion practices increased by 22.6%, which is testament to the strength of our owner-operator model. Like-for-like joint venture income grew by 17.3%. Second, we are the only true omni-channel pet care business in the U.K. Our model of providing customers with everything they need to look after their pet however they want it and however they choose to interact with us is absolutely working. More customers are choosing to engage with us digitally with our omni-channel revenues growing by 70% in the quarter or indeed 92% on a two-year basis. The recent launch of our one-hour click and collect from any of our 451-strong store estate is already exceeding our expectations, underpinning an 18% participation of retail sales from omni-channel during November. Our recent acquisition of The Vet Connection broadens our digital capabilities in providing trusted advice and pet care solutions 24 hours a day, it will enable us to provide customers with around the clock veterinary telehealth advice, triage, and ancillary services, meaning that owners can access quality care for their pets remotely whenever they need to. Third, we are seeing continued growth in our VIP and Puppy and Kitten Club memberships, that's driving increased spend across our pet care platform. We're seeing more new pet owners, our Puppy and Kitten Club engages with those new owners at the start of their pet care journey, it introduces them to all parts of our business. It's grown 47.2% year-over-year in the quarter, with members typically spending 25% more than non-members across the group. Our VIP membership now stands at a record 6.2 million members, with 26% of those members shopping across more than one channel. Our new client registrations across our veterinary practices are now averaging approximately 10,000 new client registrations per week, supported by the continued success of our in-store referral scheme. Fourth, our subscription business is growing, that's increasing the resilience and the quality of our sales profile. We now have over 1 million subscription customers. It's growing. That's generating over GBP 85 million of annualized customer revenue. We now have a brand new, fully recruited propositions team who will build out our roadmap of providing unique bundles of products and services to customers that our competitors cannot easily replicate. Finally, we're continuing to invest across all channels to make pet care as convenient, as flexible, and as engaging as possible. The strong cash generation of the business, along with the recent disposal of our specialist hospital division, provides significant resource to accelerate growth across our omni-channel pet care platform. We're investing to digitize our entire business, making pet care even easier for customers, and we're setting out a bold ambition in this space. We continue to roll out our next generation of store, recently launching two new small format stores inside M25, and we continue to leverage our proprietary data through our enhanced customer segmentation. We're also at the beginning of this journey, and we're starting to leverage the benefits. There's still so much more left for us to do, and I'm genuinely excited about the potential that this offers us. To conclude, I'm really encouraged by our performance over the last quarter. Testament to the strength of our integrated pet care strategy, our agility to respond to changing customer needs, and the favorable trends within the pet care market. As we now trade through national lockdown three, we will play our part in providing customers with the essential pet products and healthcare that they need. We continue to prioritize the health and safety and the welfare of all of our colleagues to ensure we can provide a safe environment for our customers. High infection rates and restrictions on movement will make the final quarter challenging, but we're confident, as we've already shown, we can flex our business model to suit the environment in which we're in. There's still so much more left for us to do, but we're very much on track with our plans to build the best pet care business in the world. We continue to do the right thing by all our stakeholders, and I'm particularly pleased that despite the challenging external environment, we're able to provide a further GBP 200,000 in much-needed funding and support for Support Adoption For Pet s rescue centers across the U.K., and that now takes that total since the onset of the pandemic to GBP 1.3 million. Finally, I would love to express my amazing thanks and support to our colleagues and our partners. Their commitment and support of our business has just been outstanding in this last year. I'm incredibly proud of the way that every one of them has risen to the challenges that we've faced, and they continue to serve our customers and their pets in the best way that they can. I'll stop there, as I'm sure there'll be a number of questions, which Mike and I will be delighted to answer. I'll hand the call back to Emma. Thank you. If you would like to ask a question, you can do so now by pressing star one. Press star one if you would like to ask a question. We will now take our first question from Greg Lawless from Shore Capital. Please go ahead. Your line is open. Hi, it's Greg, actually. Morning. Good numbers. Could you just maybe just give a bit of color in terms of the shape last year of Q4? Obviously, it was a bit of pull forward through lockdown one as customer stockpiles. Just kind of the shape of that and what that might mean in terms of going into FY 2022. Then the new two stores that you launched inside the M25, is it possible to know where they are and what your thinking is there, please? Sure. Well, look, I'll do the point on the stores. I'll ask Mike to talk about the shape of Q4. There was two new formats. Camden was an existing store that we've reformatted. Putney is a brand new store. They are high street-based. They're typically half the size of a normal Pets at Home store, which of course, is typically on a retail park. In London, retail parks are few and far between. With the changes that we've seen in the retail landscape this year, we're anticipating a greater availability of these types of sites to open up in London in the short-term. We're really pleased with the performance. We've built these stores from the bottom up. It's a combination of getting as much services as we can into these stores, so in these cases, a groomer. In future ones, we'd like to put a vet in as well. It's about refining the range to customers in London, and that's about refining our food offer. Typically more premium, typically smaller bag sizes, basically what you can carry to go home, but still bringing a full assortment. Early days, Camden was a very well-established store performing well. The refit has enhanced that performance, and Putney has got off to a cracking start, although obviously we're in pandemic, so we'll need to get a full read on that as we move forward. We think there is potential in M25 for sort of 20-25 stores of this type, and it's an area that we've been underrepresented in. When you combine that with our digital and physical, we think this is an opportunity for us moving forward. Mike, do you want to talk about Q4? Hi, Greg. You're right when you say Q4 last year was absolutely a bouncy period. You may remember that the COVID pandemic really started to impact sales, particularly as we got towards the end of that quarter into March. Quarter as a whole, our like-for-like in retail, which was the most relevant, I think, was 15.9% for the quarter as a whole. It sort of went 77.34% in that final month. Therefore, as we know, we managed the business through that. We've got a pretty tough comp to lap. So far so good, I think, in terms of how first few weeks of January are turning out. Just on supply, we're kind of reading something in the accessories business and stuff, port delays, you've obviously stockpiled, maybe stockpiled a bit for Brexit. Have you got any color that you can give us on that, please? Yeah, I'll cover that off. Look, I think the first thing is our imports actually are not a massive part of our business. From the EU, it's about 2%, and from Asia, it's sort of 15%-17% of cost of goods. We were building stock in the U.K. in anticipation of Brexit, that's been beneficial for us. Without question, containers actually are the big issue, and I think you've seen that well reported. As we stand here today, we've tailored and changed our trading offer to reflect our stock levels. We're in a reasonably good position watching it like a hawk, and we have backup plans in case we need to do a bit more near sourcing. We're not flagging an issue. It's just challenging. We're confident we'll be able to work our way through it. Good stuff. Good luck. Thanks. Thank you. Thank you. We will now take our next question from Matthew Garland from Citi. Please go ahead. Your line is open. Hi, guys. Thank you for taking my questions. I had three. The first one was just I saw some stats around VIP customers who are in Q3, 61% of them then spent in 3Q. I was wondering if you can give some color around how that's trended maybe from new customers from last year or over a longer period, and how you expect that trend to continue. Secondly, in terms of the new signups, so obviously the 10-K average, has that concentrated in newer practices or older practices? Has it changed your view around how first opinion practices might mature? Thirdly, in terms of the subscriptions, the GBP 85 million annualization of sales, how does that look or how should we think about that from a profit perspective? I imagine it's quite a high margin kind of area. Can you give a bit more color around how we should think about that? Yeah. Look, I'll do the first point, Matt, regarding VIP customers and signups. You're absolutely right. So we now are at 6.2 million VIP members, which is up 12% year-on-year. Encouragingly, 26% of those customers have shopped across more than one channel, which is up 20% year-on-year. Obviously that reinforces all the effort that we've been placing behind driving new customer signups as well as encouraging them to get into more parts of our business. Underneath that, it's worth pulling out that the Puppy and Kitten Club, which is a feeder into VIP, had its strongest ever quarter, and year-on-year, that was up 47%, and that really reflects two things. One is we've been consciously doing new customer recruitment, so we've had above-the-line campaigns to make that address that club to customers as well as we've obviously seen a step up in puppies and kittens across the U.K. The new client registrations in the vets, we've talked about that being 10,000. We are a business which is in maturing mode, obviously got lots of brand new practices, we would naturally see typically between six and seven thousand new client registrations anyway in our business. That step up to 10,000 is a step up, and it's something we've seen really since not long into the lockdown, actually, we started to see this trend starting to emerge. I think the important thing to point out here is it's new client registrations of all types, so it could be a puppy, a kitten, it could indeed be somebody who's changed practice or indeed somebody who has acquired a new pet. We're seeing that right across the business actually. It helps us enormously, particularly in the new practices, because obviously they're maturing. This really underpins the maturity curve. Actually, in existing practices, we've seen very strong lifetime performances across all cohorts and an acceleration of their performance. It's an encouraging factor. Of course, for us, within vet, this is a really important lead indicator because, of course, vet clients tend to be more sticky. Once somebody signs up to a vet, the likelihood of them becoming a longer term valuable client is really important. This is a great indicator of maturity curve of our business. A really important one for us and one that we're really pleased to see that play through. Mike, do you want to talk to the revenue on subscriptions? Yeah. Thanks, Peter. Subscriptions are a key focus for us as a business. Over 1 million customers now on some form of subscription, up over 17% year-on-year. That, of course, is what we're trying to aim to do there is build a high quality, annuity type, sticky revenues, to build lifetime value from our customers. 1 million's great progress, of course, we've got a huge amount of headroom still to go on subscriptions. We've got 6.2 million members of our VIP scheme. Those subscriptions are very profitable for us. In fact, within that, our flea and worm subscriptions are probably one of our most profitable products. You'll continue to see that being a focus. It is part of our strategic push, as a KPI, is perhaps just as important going forward as looking back at lifetime sales growth. If we can add to that, Matt, something we just put out in the announcement is we've actually built a propositions team, whose job it is now is to build out existing plans across Easy Repeat, across health plans, and across flea and worm, also look at how we bolster combinations of products and services together. That's why The Vet Connection was a really important acquisition for us, because obviously that becomes a service which I think can really enhance value across our existing subscription plans. As we get more granular about bringing solutions together for different types of customers, think about grooming and other parts of our business where we can create more repeatable revenue opportunities. That team has been recruited, has been in the last half year, and they literally are just onboarding as we speak now. It'll be an area that we're giving an awful lot of focus to moving forward. Just if I could, a quick follow-up on the VIP customers. In terms of, I guess, if we're looking back to last year when lockdown began and the new customers that you took on then, how has that trended in terms of their spending through to now? Obviously the stat I think was 2Q through to 3Q was 60%. Can you give us an idea of what that might be? I know it's not a year-on-year comparison, but is it at a similar level? Those customers are still continuing to spend quarter-on-quarter at a very high level and you expect that to continue? Based on, I guess, previous data that you have, you expect that to tail off? How should we think about that? Yeah. Key, obviously, we've acquired a lot of customers, Matt, quarter two, for example. We acquired a lot of customers If you look at how our like-for-likes progress, in our quarter two like-for-like for the group was 12.7%. Quarter three like-for-like is 17.6%. We've had a pretty much a 50% increase in growth rates. A lot of that will be attributable to the retention of customers we acquired in quarter two that continue to shop with us. Key to our activities, and Peter referenced it with the proposition team, but also the use of our data, is to effectively lock those customers in, through subscriptions we've just been talking about, and retain those customers. It's a great opportunity for us and bodes well as we look into the new financial year. Great. Thank you for taking my questions. Thank you. We will now take our next question from Owen Shirley from Berenberg. Please go ahead. Your line is open. Morning, guys. Thanks very much for taking the questions. Three, please, if that's okay. The first was, just wondering for your above GBP 77 million of PBT guidance, what does that factor in for Q4? The second one was if you'd be able to give an update on your thoughts around what you think's happened to the pet population this year, what the key KPIs you're seeing that that's driving are and how sustainable you think it is going forward. The third one was whether you can update on your investment in the data team, perhaps if you're still seeing the strong results from the mailers recently. Thanks. Okay. Well, thank you, Owen. Three great questions. I'll talk about pet population and investment in data, and I'll hand over to Mike to talk about our Q4 and PBT. One of the challenges in the pet sector is there aren't very accurate reporting mechanisms for the top pet population. We look at lots of measures. Probably the most important one we look to is actually our own database itself in terms of what we can see in numbers of pets. The first thing without question, and I think this is being widely reported in lots of different sources and actually in lots of different countries actually, is there has been a notable step up in new pets throughout the pandemic. We'll often talk about puppies and kittens, but the other thing which is not very well reported on is typically now most adoption centers are pretty much empty of pets. It's actually been a demand across all types. Whilst we'll also have puppies and kittens, when somebody adopts a dog or a cat, often they behave as if they are a puppy or a kitten in terms of the setup, and we've definitely benefited from that. That's why we talk about baby boom. The factors that we would talk to, there's a few that I think are really important. Puppy and Kitten Club registrations are a good lead. There was a step up in the quarter to over 47%. Now, some of that is driven by our own marketing. I think the underlying factor, which is probably more important if we look at the category performance, actually the things that people are physically buying in puppy and kitten, that's typically between 17%-20% step up in like-for-likes. They represent things often that you buy once only, like a cage or a setup. I think it's probably fair to say we've seen that trend all the way through. Without holding me to a position, I actually would say that probably means we're seeing a step over between sort of 15%-20% of new pets in the U.K. this year that goes into that new pet category. Of course, that means the overall population has lifted. Of course, pet lives are anywhere between sort of 10-15 years, depending on cat, dog and species. That should be that there is a step up in the overall pet population, which means the market should be robust moving forward. I think that's a really good lead indicator. Of course, that goes alongside the two factors which have driven the pet population for the last number of years, which is humanization and premiumization, which has typically led to between a 2% and a 3% step up in growth. I think the market is really in a strong position, and you'd anticipate that we should see a good market moving forward because the pet population numbers have changed. We do think that's sustainable. We haven't seen a slowdown yet in registration, so we can't yet say this phenomenon has come to an end. It's been continuing in the quarter and will continue to measure and report accordingly. The data team, we're really pleased and encouraged by what we've done. We're now live on having insourced all of the information and all of our resources to our own teams. That gives us enormous benefit. We can just do an awful lot more work. Our segmentation models are live. Live by in the fact that all our CRM is now driven from it. For all our mailings that we've been enacting since September, which is significantly more targeted, we're seeing a really good step up in redemption rates from customers, and that's helped underpin our like-for-like performance. Behind the scenes, there's loads of other things that our team are adding value to. They've built a retention model which predicts when somebody may well churn, and therefore we can intervene. Only this week we were seeing some of the work they've done, not just on customer stuff, but other business improvement opportunities where we've applied our data analytics skills to identify opportunity for the business. The way I see this is we're building a capability which just does two things. It allows us to be very targeted with customers, allows us to sub-segment in a way we haven't been able to do before, which creates value in its own way. Also is creating business opportunity just by using our data and analytics in a significantly better way to allow us to predict better and be able to respond better. I see this as a capability that just unleashes the business moving forward. Mike, do you want to talk about our PBT? The guidance we gave back on the 8th of January, GBP 77 million full year PBT, took into account, of course, that very, very strong performance we'd seen in quarter three. We did that looking forward, we're assuming that the current restrictions, COVID restrictions, will exist in some form all the way through to the end of March. For our business, that means clearly numbers of customers in stores. We're essential retailer, numbers of customers, numbers of visits, our grooming businesses, under constraints. We're doing only welfare, only grooms, that's about 56% of capacity. We're assuming that the guidance that the RCVS have given for the first opinion vets doesn't change. That means we can continue to offer services. Clearly, there's a lot of unknowns and literally we respond to events, external events and new news as they develop overnight. We're three weeks into our Q4 now. Trade has not been at the levels as it was in December, where we were 20% like-for-like, it still remains pretty robust despite the restrictions. We are literally managing the business week on week. We've held that guidance at GBP 77 million, not because of things that are going to change the way we operate our business, mainly because of the material uncertainty that exists, as everybody will understand, in the external environment. Thanks, Mike. Could I ask, just to follow up on that, I don't know whether you'd be able to give a like-for-like figure that you would need in Q4 to get to that kind of GBP 77 million? Yeah. Well, we just had the whole conversation about the comp being really strong. Last year we were 15.9% like-for-like across the Q4. We would normally assume our planning growth rates between 4% and 5% normalized, and that's the level we're assuming as we go across Q4. Great. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, you can do so now by pressing star one on your telephones. That's star one to ask a question. We will now take our next question from Geoff Ruddell from Morgan Stanley. Please go ahead. Your line is open. Morning, everybody. Can I just ask one question about vet practices, please? I see that the number of company-owned First Opinion vet practices, the number is still creeping up and the number is still creeping down in the number of JV practices. When do you expect, well, firstly, are you still committed to moving the company-owned ones back to a JV model? On what sort of timeframe? I realize there'll always be a handful of company-owned ones, but when are we expecting to see the number go back to, I don't know, 10 or something like that, rather than the 47 at present? Yeah, I'll pick up. That number is obviously high from the work that we did two years ago where we actively bought some of those practices back, Geoff. We've always had the ability to buy practices back in, often triggered by a JVP event. For example, sadly, one of our JVPs died in the six-month period, and obviously we'd buy that back in whilst we then go and hot house it to find a new partner. I think what we've been able to do is demonstrate our ability to run both. We can actually move practices either way. We actively do bring practices back out into JVs. To be honest, it's driven by one factor only, which is finding the right partner in that locality who we think is the right person to do it. That's an ongoing activity, and you will expect to see those numbers move subtly between each piece. Are you still likely to be running 30 or 40 practices yourself in two or three years time? Yeah. I think we'll always have a number where we will own them for different reasons. We feel very confident and comfortable to be able to do both. I think it helps us particularly because obviously in each one we're dealing with small business owners and sometimes life gets in the way and you need to have an ability to be able to bring them in, run them while you find the next owner. Okay. Thank you very much. Thank you. We will now take our next question from George Plackett from [MEAS]. Hi. Morning, guys. The first one was just on given pet population will have jumped this year, just on your thoughts on kind of the vet rollout for the kind of new practices, whether there's kind of white space, whether you would be looking to bring new groups in, how easy you're finding it to find the right vet partners to do a JV with. The second one was just a little bit extra, if you could, on the proposition teams. Just thought that was really interesting. How will they be working together with the data teams? Can you give any sense to kind of the number of people that will be working on that? How will they be kind of testing it? Will they be kind of testing on a localized basis? Just anything more you could share there. Yeah, sure. Well, I'll pick up the proposition team and ask Mike to talk about the vet rollout. We've recruited a director of what we're calling Pet Care Plans, our proposition team, and we've identified a number of target segments. Obviously, you can think about things like puppy and kitten being an obvious target segment, as well as healthcare plans being another segment. It's a team of about 10 people, which is a combination of some dedicated analytic support, some CRM support, some marketeers. These people are part of the commercial team, but their job is to work across both vets and retail in using the data to identify the ability to combine products and services. The first thing we want to do is make sure that the existing plans that we've got are really compelling, and we use all the capabilities of the group to differentiate them. I use this as an exemplar, but imagine that we've bundled in 24-hour access to a vet through The Vet Connection as part of a flea and worm plan. That really adds significant value to the product offer, and it brings in something that's got high perceived value to customers, relatively low cost to us, we own it as part of our group, and it allows us to drive both stickiness but also acquisition. I'll give you a micro example. The most popular dog that we would see in our groomers would be a Shih Tzu because it needs grooming every four to six weeks. That customer type behaves quite differently to a German Shepherd owner. Bringing together a proposition that would have grooming built in for that customer type, grooming maybe plus their food, plus their flea, will be very relevant for those customers. Because we're able to segment our shoppers, not just by pet type but by breed, and breed in dog is super important, what we're able to do is start to put things together for customers in ways that nobody else can because we both understand their need, we know who they are, and we've got the capability. We've got quite a long roadmap ahead of us because we've got 1 million subscribers, which is fantastic. We think there's a really big runway ahead, and we want to move more of our revenues to stop waiting for people to turn up, actually make things convenient. If I use flea as a really good example, there's 18 million cats and dogs in the country. They should be flead every four weeks. That means there's a target opportunity of 18 million customers. We've got just under 300,000 subscribers. You can see quite a long roadmap ahead just on flea and worm subscriptions. We're genuinely excited because you need to do it, people forget to do it. We want to make it dead easy, and we've got the proposition to do it. We're going to invest in this space and build out stuff that other people can't do. Mike? Yeah. Your question on vet rollout. There's a few points, I think, to help answer that question. The first, I think, is that our model, which is joint venture ownership model with the vets, obviously the owner driver, I think has proven its worth through the pandemic. We've been able to stay open, and we've seen very strong customer revenue growths. 20% customer revenue growths across the portfolio. Unsurprisingly, the incoming from vets interested in our model is quite strong. We've got a very active team looking at how we turn those into new practices. Of course, one of the things we know is the quality of those vets is of most paramount importance. Looking ahead, you've got to be a good business owner as well as a strong vet. The supply of new vets, though, in terms of incoming interest, is pretty strong. While we're in a pandemic, we haven't been opening new practices. I think it'd be wrong to try and launch a business with all the restrictions that exist. Beyond the pandemic, the future's looking pretty positive. We have about 150 stores still without a vet practice, clearly one of our intentions is to try and put services, including vets, in all of our stores. We have a very strong standalone model, which we know, from a financial point of view, is at least as strong as our store model. It's location-wise and the model-wise, we've got a good runway. As we're heading to next year, I think a sensible planning assumption going forward, perhaps 10-15 new practices a year. If the supply of vets gets stronger and they are sufficient quality, we could clearly go faster than that. As a planning assumption, 10-15 new practices a year is where we're sort of thinking. Perfect. Thanks very much. Thank you. As a final reminder, if you'd like to ask a question, please do so now by pressing star one on your telephones. There are currently no questions in the queue. I'll turn the call back to your host. Great. Thank you very much. Thank you, everybody, for your great questions. Really appreciate it. All that leaves me to say is please stay safe, and we'll speak to you soon. Take care. Ladies and gentlemen, that will conclude today's conference, and you may now all disconnect.