News Key Pet Names Eye Up Vets

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Key pet names eye up vets
23rd July 2018

By Sandra Pearce
Both Mars Petcare and Pets at Home have said they are turning their attention to veterinary practices alongside their traditional offerings.
 
In its recent preliminary results for the financial year to March 2018, the 448-chain Pets At Home said it would take action to ensure the vet business ‘reaches its potential’. It also said that while it was slowing its super store openings to a maximum of five in ‘carefully selected areas’, it aimed to open 20-25 vet practices in addition to its existing 461 practices.
 
The company told the Reuters news agency it plans to double the number of vet practices it operates – mainly 50-50 joint venture partnerships with vets – to 1,000 over the next decade.
 
Pets at Home will invest £20m next year alone in its vets business, which has a core profit margin of about 34% compared with its retail division’s 14%.
 
Reuters said that Pets at Home’s revenue from the vets practices comes entirely from the franchise fee it charges its joint venture partners. However, a Reuters review of the accounts of more than 200 of the joint ventures found three-quarters of them are loss-making.
 
Pets At Home said the group expected each practice to break even after four to five years of trading. “It takes time for a veterinary practice to develop and reach maturity. We have a lot of young practices, more than half are under four years old,” a spokeswoman said, adding that 87 of its 461 practices were profitable and debt-free.
 
 
Mars makes major acquisitions
 
Although Mars is known for its pet food brands including Pedigree, Whiskas, Royal Canin and James Wellbeloved, the $35bn global giant is now investing heavily in the veterinary sector with two major acquisitions last month.
 
On June 11, it announced it is acquiring AniCura, which has 200 animal hospitals in seven countries across Europe. Days earlier on June 7, it announced it will acquire UK veterinary group Linnaeus, which has 82 practices and five specialist multidisciplinary referral centres. 
 
Once the AniCura and Linnaeus acquisitions are complete, Mars will own more than 2,000 veterinary practices in the US and across Europe.
The acquisitions demonstrate Mars Petcare’s strategic entry into the European veterinary care sector, within Mars Petcare’s Veterinary Health Group. 
 
Poul Weihrauch, Mars Petcare president, said: “Mars Petcare has a long and global history of providing nutrition, veterinary care and science for pets across the globe. Our veterinary business until now has been in the United States and Canada. 
“Europe is the second-largest region in the world for pet care, and European pet care is expected to grow significantly over the coming years. There is a great opportunity to address growing demand by providing high quality, consistent veterinary care across Europe.”
 
Stephen Badger, the great-grandson of founder Franklin Mars, told Business Insider: “We used to be very much a pet-food company. Now we’re a pet-care company, where we are actually doing day-to-day treatment of animals all the way through to quite serious diagnostics and surgeries and treatments of animals.”
 
Mars is also investing into the ‘digital transformation’ and earlier this year, poured $100m into a venture fund, the Companion Fund, which will invest exclusively in pet care products, tech and services.