Jollyes continues to sink into the red despite sales surge
Jollyes has reported a deepening pre-tax loss of £13.3 million for the year ending 26 May 2024, following a £5.3 million loss in the previous 12 months.
However, the company's sales continue to surge, with turnover increasing from £115.2 million to £144 million during the same period, as reported by City AM.
This marks a significant rise from its sales figures of £86.9 million in May 2022, £76.9 million in 2021, and £67.9 million in 2020. Despite the ongoing sales growth, Jollyes has not posted a pre-tax profit since achieving £2.1 million in the year to May 2018.
The company attributed its losses to several factors, including a £6 million write-off of assets deemed unrecoverable, £1 million spent on pre-opening costs for 13 new stores, and £1.9 million invested in a supply chain transition project initiated the previous year.
Additionally, Jollyes incurred £1.9 million in costs related to the sale of the business and £400,000 in restructuring expenses.
The company was acquired by TDR Capital, the private equity backer of Asda, pub group Stonegate, and David Lloyd Leisure, in 2024.
In a statement, the board expressed confidence in the company's financial and operational position, stating: "The directors believe that the group is financially and operationally well-positioned to capitalise on its market standing and is targeting further improved performance in 2025."
During the year, Jollyes' average workforce increased from 963 to 1,160 employees.
Jollyes eyes expansion to take on Pets at Home
Jollyes is setting its sights on expansion to compete with Pets at Home. Earlier in the year, Jollyes announced intentions to reduce thousands of prices and to inaugurate new stores throughout the UK.
Additionally, the retailer disclosed a suite of new benefits for staff aimed at drawing in fresh talent. These developments for Jollyes follow a surge in shares for competitor Pets at Home, buoyed by indications that the UK's competition watchdog is leaning towards a favourable outcome for the sector, coupled with rumours that private equity firm BC Partners is gearing up for a takeover bid.
At January's end, Pets at Home reported a marginal profit decline due to a dip in retail revenue, despite a significant rise in veterinary sales. Over the 12 weeks leading to 2 January, revenue decreased by 0.2 percent to £361.6 million.
Retail revenue experienced a 2.8 percent like-for-like drop, which Pets at Home ascribed to a "more challenging UK consumer backdrop with particularly weak footfall from October."
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