Good day, and welcome to the Pets at Home Q1 2023 trading update call. At this time, I would like to turn the conference over to Lyssa McGowan. Go ahead. Good morning, everyone, and thank you very much for joining the call. I'm Lyssa McGowan, the Group CEO, and with me today is Mike Iddon, our Group CFO. We are pleased to share with you a strong set of results today in our Q1 trading update for the 16 weeks to 21st of July 2022. The performance right across our business through the first quarter has been strong, and that's a testament to both the defensiveness of the U.K. pet care category and the strength of our unique omnichannel model. Our like-for-like growth revenue increased by 6%. That's 38% on a two-year basis, with all of our channels remaining in growth. Our retail like-for-like grew at 5.6% or over 36% on a two-year basis, with over 4% like-for-like growth across our store estate and our omnichannel like-for-like growth of 13%. Within our vet group, like-for-like growth was 8.6% or 59% on a two-year basis. With like-for-like customer sales across our first opinion practices up over 4% and a close to 10% increase in our like-for-like joint fee income. Underpinning this strong performance has been continued growth in new customers, as well as high levels of retention with our extensive private label offering and growing subscription platform increasing customer stickiness. Sign-ups to our Puppy & Kitten Club averaged 25,000 per week, approximately 3x pre-pandemic levels. Our VIP membership now stands at a record 7.4 million, up 11% year-on-year. New client registrations in our vet practices averaged over 8,500 per week. Importantly, we continue to deepen our relationship with these customers, with 27% of all of our VIPs now shopping across more than one channel, supporting continued growth and spend. Good cost control and proactive management of industry-wide inflation pressures through a planned series of self-help initiatives has underpinned really good conversion of sales growth into profit and cash. Our balance sheet remains robust with net cash of GBP 40.2 million. We also continue to progress on our previously announced GBP 50 million share buyback program. Our guidance for the current year remains unchanged. We continue to expect group underlying pre-tax profit to be GBP 131 million in line with current analyst consensus. In conclusion, our performance through the first quarter further demonstrated the enduring strength of both our business and the wider pet care market, as well as the hard work of all of our amazing colleagues and partners right across the group. We remain fully committed to our strategy of building a world-leading omnichannel pet care business, and I look forward to giving you a broader update at our interim results in November. Now I'll open up to questions on trading over the past 16 weeks. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We will now take our first question from Adam Tomlinson from Liberum. Please go ahead. Morning, everyone. Three questions from me, please. First of all, just on the growth numbers you've reported today, can you just, please provide some commentary around the split between, price and volume, in terms of what's driving that growth. The second question is around customer acquisition. Just again, some comments, please, on, where you're focused, the channels you're focused on in terms of acquiring those customers and any trends you're seeing in terms of the cost of acquisition. The third question is just an update on, Project Polestar and the progress with that, where we are with that, and perhaps just slightly widen that in terms of your data capabilities, where we are now with those and, how far we are in terms of the benefits flowing through from that. Thanks very much. Thanks, Adam. I'll let Mike pick up the first two of those questions, and then I'll take the third, if that's okay. Yeah. Thanks Adam for your questions. I'll pick up the one around the volume inflation question you asked first. If you look at our like-for-likes that were reported this morning, 6% for the full quarter. Within that, we've got our retail like-for-like of 5.6. Within that, our merchandise part of our retail business grew at 5.8%. If you split that out, that 5.8%, about 5% of that is pricing and about 1% of that is volume. But I think you need to dig a bit deeper through food and accessories to fully understand the story there. Within food, our like-for-like is 14%. Really very, very encouraging. Within that 14%, price is about 8% and volume 6%. With that, within accessories, which is the other big part of merchandise, actually the headline like-for-like in accessories is -5%. Drilling into that, the consumables part of accessories, as you expect, has stayed very robust, growing at about 10%, of which seven is volume, three is price. Unsurprisingly, the relatively small part of our total, which is discretionary accessories, so I'm talking things like dog toys, cat accessories, leads and collars, that's down about 11%, and that's mainly units. That builds back to -5% in accessories. That's what we're seeing across the business. I think there's one thing that really encourages us is the volume growth we're seeing in food. That's a really positive as we've acquired more customers. I think that was your second question around acquisition and the channels we're acquiring from. As you can see from the numbers we put out this morning, you know, our acquisition remains really broad-based. You know, we're welcoming in 25,000 new puppy and kitten customers a week into our retail business, 8,500 new vet clients a week. You know, we're very encouraged by that, of course. That follows on from the 1.1 million new customers we welcomed into the business last year. Just, you know, just building on Lyssa's opening comments, we're still acquiring new customers, and we're deepening the relationship with our existing customers. I think it says something for the continued appeal of the Puppy & Kitten Club and the appeal of what we offer to new pet owners. Now, we are unique in that if you're a new pet owner, we are pretty much the only business where you can get all the products and services you need to care for your pet. I think that counts a lot towards the enduring appeal of our Puppy & Kitten Club. Thanks. Sorry, just to follow up on that. In terms of your marketing spend, can you maybe just talk about where that's being focused and whether you're seeing an increase in the with the pet ownership increase, whether you've seen a big increase in the natural flow of traffic towards to the brand? Inevitably, the brand itself has got high awareness, and as the Puppy & Kitten Club gains traction and scale, it becomes more widely known. We're pretty much flat quarter and quarter in terms of marketing spend. We were on TV again in quarter one advertising our Puppy & Kitten Club. We know that works really effectively for us. We're very pleased with the results we've seen from the marketing we've done. Great. Thank you. I'll talk a bit about data and digital. We've made really strong progress in data and digital, and I think both of those reflect the strength and ongoing commitment to our omnichannel model. In digital in particular, we've launched a number of initiatives. We've launched single sign-on, bringing together in-store, online, VIP, and e-commerce into a single sign-in for customers, which has made it much easier for them to shop with us and moves us towards our objective, increasing share of wallet. We've replaced all of the colleague devices in stores to one digital device, and that's had benefits both for customers and also for our colleagues, who really enjoy the new digital device and everything that they can do on it. We very recently launched something called Pet Expert Live, which is an exciting new initiative where we're able to connect customers online and link them up with an expert live in store on their particular issue. Customers are really loving that, and our colleagues are really loving it because it gets them the ability to share their brilliant expertise more widely. In the coming months, we're going to launch our new combined shopping and VIP app, which I think will be a particular benefit to customers, and the ability to sign up and manage Easy Repeat food subscriptions in-store as well as online, which will be great again in allowing us to bring our customers up the pricing architecture, particularly in food and save them money in the current environment. Lots of good progress in digital. In data, again, very good progress. We have brilliant data on all of our VIPs, and we're increasingly finding ways to use that base in terms of direct marketing to customers. We've talked about the Puppy & Kitten Club and increasing share of wallet. We've actually had the highest ever response to our latest VIP marketing in August. We continue to find other ways to use that in the business that aren't directly customer related in terms of things like store ranging, store location, those kind of things. Really strong capabilities, really strong progress. Having said that, I think we're still in the foothills of what we can do with the best data set in the U.K. across both vets and retail and online, and what we can do with that and unlock in the coming months and years. I'm excited to come back in November and talk to you about our plans going forward. Great. That's very helpful. Thank you very much. We will now take our next question from Simon Bowler from Numis. Please go ahead. Good morning. I was wondering if you could kind of dive in a little bit more on some of the inflation trends that are coming through. You kind of spoke kind of 8% pricing within the food part of the business. Are your COGS also up 8%, i.e. you're kind of holding and managing to a stable percentage margin? Is that how what you're seeing kind of the industry do more broadly? The second question was, I guess from the acceleration in the kind of new Puppy & Kitten sign-ups was kind of, you know, particularly encouraging. Do you think you're taking even more share of the market within there, or it's kind of just growth in the Puppy & Kitten population continuing? Is there any things you're noticing in terms of split dog, cat or by breed, that may give us extra cover on what's happening there? Okay, Mike, do you want to take the first of those and I'll pick up on the second? Simon, thanks for the question. Inflation, you know, seeing in food about 8%. That pretty much reflects what we're seeing in our COGS between 7%-8% supplier cost price increases. We're able to pass those on after, of course, some pretty intense negotiation with our suppliers. We're benefiting, by the way, with the sort of 30% growth we've given the supply base over the last couple of years. That does, you know, leveraging the growth we've given the suppliers does help in those negotiations. I think, you know, that's good that we're able to pass that on. Clearly being competitive on price remains our really important guide rail, and we're not going to take our eye off the importance of being competitive on pricing. In terms of the new signups, it's a notoriously difficult market to size. Our belief is that we are continuing to gain a very good share of the new puppy and kitten market. I think our digital and data capabilities are coming to the fore here. In terms of the split, it's a slight move towards kitten from puppy, but really no material change. I think the interesting thing is pre-COVID we were at 9,000 puppy and kitten sign-ups a week, peaked at between 25 and 30, and are now still at 25,000. You know, in terms of ongoing COVID winners, the pet care market is showing no signs of returning to anything like pre-pandemic levels. We're seeing ongoing sustained growth, which we think reflects people's changes in lifestyles, much more working from home, maybe reconsideration of importance of various life goals during COVID. No slowing down. Actually that's also translating to our vet business with strong new client registrations of 8,500 in the last 16 weeks, which is very similar to what we've seen over the last year or two. I think one important thing to remember is that is the new human sign-ups to vets. If a family takes on an additional pet and registers with the vet, that doesn't show up in that number either. Really delighted with how we're doing in terms of new customers. That second point you made there explains the next follow-up question I was gonna have. Thank you for that. One other quick follow-up on the first part, is a similar level of inflation and therefore pricing you're passing on both your own brand and third party? i.e., is that kind of pricing calculus to maintain been pretty stable through the period? It is Simon. Yeah. You know, we still have a very strong price gap actually between own label and brands. You take product like our Wainwright's Turkey and Rice 15 kg. You know, that's about GBP 8 a bag cheaper than the equivalent large product, say, James Wellbeloved, the premium brand in the market. You know, it shares a lot of the features and benefits, by the way. You know, that range of own label, I think give us a broad appeal to customers, make pet care very affordable. A customer that trades out of James Wellbeloved into own label, we welcome them. Of course, we make more. Not only do they get a better price point, you know, we get more cash margin as a consequence. You know, maintaining that price architecture between own label and premium is, we've always done that, and it remains as strong as ever. Great. Thank you. As a reminder to ask a telephone question, please signal by pressing star one. We'll now take our next question from Manjari Dhar from RBC. Please go ahead. Hi. Morning. Thanks for taking my questions. My first question is just on how the demographics of the customers that join the Puppy & Kitten Club compare to sort of the rest of the business and the overall VIP program. Then secondly, maybe could you give some more color on what the margin differential is between food, consumable accessories, and discretionary accessories, please? Yeah, I'll take the first of those and then pass to Mike. We found recent cohorts in our VIP, which is the Puppy & Kitten Club is the main source of our VIP members, tend to be a bit younger. They tend to be more engaged in our broader service, more likely to sign up to the vets, and more likely to shop online. Those trends are persisting. Mike, do you want to talk on margins? We're not gonna break out our margins by individual categories within accessories and food. Don't forget, our accessories margins have always been mid-50s, and our food margins around about 40%. Stronger margin in label food, slightly lower margin in branded food. We're not gonna get into what the margins are. You'd understand that for commercial reasons on individual categories within accessories. Sure. Understood. Thank you. Thanks, Manjari. We'll now take our next question from Eleonora Dani, from Shore Capital. Please go ahead. Yes, good morning. Thank you for taking my questions, and welcome, Lyssa. First one, I was wondering if you could comment on the consumer behavior you are seeing first of all in the food category. Perhaps you've seen an uplift on the brands that were not stocked at competitors. I know that Mike mentioned that the own label is quite competitive. Are you seeing pet owner trading down or are they sticking with the branded food they are used to? In the non-food business, also very helpful the comments we have heard so far, but I was wondering, have you seen any change in online sales mix? Lastly, in grooming, how sticky are consumers these days in this part of the business? Thank you. I'll take the first and the third of those, and I'll let Mike pick up on the second. Consumer behavior, we're seeing very little change actually, and I think that talks to the ongoing defensiveness of the sector. As Mike said earlier, 75% of what we sell is habitual. We're finding that in that 75% we are driving both volume and price growth, so growth across both of those. In terms of trading down, we are really not seeing any real evidence of that. For example, in dog food, our tonnage is actually up around 10%. We have still obviously got the range across our price architecture, but we're seeing growth in all of our categories. Now, if you take something like Advanced Nutrition, that's growing well, mid-single digits. The step up is growing faster at mid double digits. Grocery is where we're really driving growth. None of that's coming from trading down. It's actually coming from trading in. We are winning market share and continuing to win market share, and that's a really good source. Those grocery customers are a really good source of future trade up. That's been driven by availability, by offers, by marketing, by just sort of good trading. No evidence of trading down, but real evidence of trading in, and that's backed up by our suppliers who tell us that we're gaining market share. In terms of grooming, if you went into one of our grooming salons, this week, you'd struggle probably to get an appointment for a few weeks. We are very full. We're grooming more dogs than ever before, and we're not seeing any evidence there, of trading down either. In fact, quite the opposite. We've got waiting lists. Mike, do you want to take the question? Yeah. Just repeat the second question. I think Lyssa may have covered the answer then in her response. Does that help with the second question or is anything else you'd like to add? Just given the strength in the online business, I was wondering if there was any change in the sales mix between food and non-food. Also the other bit, if you've seen any uplift, given that other competitors couldn't stock some brands or didn't want to stock some brands on the back of their price increases. Got it. Yeah. No, perfect. What we're seeing in our own online business is pretty much what we've always seen. It's, you know, it's a slightly higher basket size because we have free delivery after GBP 39. Transaction value is higher than it will be in a store at about GBP 40 compared to about GBP 20 for the store. Pretty much, you know, our customers will shop, by the way, both in store and online. We'll continue to be talking about customer profitability rather than channel profitability. But both stores and online are both profitable channels for us. We're not seeing much really change in the way customers are choosing to shop online. Deliver from store stock remains a very popular choice, and click and collect remains a very popular choice. We introduced those in the last year or so. It helps us use our store business, our store estate, which is a nationwide portfolio, actually to better serve customers, and increasingly offer service levels we think only we can do compared to a pure play online only retailer that perhaps has to deliver out of a single U.K. distribution center. Yeah, in summary, I think we're pretty pleased with the progress there. We're not seeing much disruption of anybody else in online, which I think is consistent with what we saw last year and we're steadily building up the scale of our online business. Thank you. As a reminder to ask a telephone question, please signal by pressing star one. We will now take our next question from Charlotte Barrie from Berenberg. Please go ahead. Hi, Lisa. Hi, Mike. Thank you for the presentation. I had a couple of questions. One of them you've kind of just answered, but following on from that, given that you're seeing customers trade down at the value end of the market, is a lot of that going into your own brand products and is that you're able to give figures around how much own brand penetration is in the food category? Secondly, on the subscription growth, are you able to give any detail about what products exactly that growth is coming from? Is it weighted towards health plans or Easy Repeat Food? Mike, do you want to take the first of those, and I'll take the second. Yeah, sure. Our own label penetration remains up in the high 30s, consistent with where it's always been really. Food own label penetration is lower, that's about 30%, and accessories is around 55%. So you know, and that remains the same across the first quarter. I think our own label lines offer customers a really good range of price points and choices at a time when that is even more important than ever. A lot of the features and benefits for own label are equal, at least to the premium brands. We're really pleased with the fact we go into, you know, a more difficult time for consumers with a really high quality, well-priced range of own label product. On subscriptions, we're really pleased with the progress we're making in subscriptions, up 16% over 1.5 million subscriptions. One question we've had is about cancellations given the economic environment, and we're not seeing any increase in cancellations. Subscriptions are great as a way for customers to save money, of course, but they're also really great as a way of improving pet welfare, certainly on the preventative medicine side. We haven't seen any material change in the mix so far across the various subscriptions we offer. As I mentioned earlier in the call, we are launching our Easy Repeat Food subscriptions in store in the coming months. That's not something we've been able to do to date. They've just been online. I think you will see the mix change because we will drive growth into that category. Thank you very much. There appears to be no further questions at this time. I would like to turn the conference back to Lyssa McGowan for any additional or closing remarks. Thank you for all of your questions and for your time this morning. It was great to hear your questions and your interest in our business. I'm so glad I've joined. It's been fantastic, and I look forward to talking to you all again in November. Have a lovely weekend.