StockMarketWire.com - Pet-product retailer and veterinary group Pets at Home Group booked an 81% fall in first-half profit, as margins shrank and it decided to buy back some struggling joint venture practices in its veterinary network.

Pre-tax profit for the six months through October tumbled to £8.0m, even as revenue rose 5.3% to £499.3m.

Pets at Home said that after conducing a review of its veterinary business it recognised costs were putting pressures on practices, including fees charged by Pets at Home.

The company, which currently has 471 practices, said it would offer to buy back and consolidatd up to 55 practices from its joint venture partners -- who are typically vets.

Around 25 of those would be operated as company-managed practices, while options would be considered for the rest, including their possible closure.

Since Pets at Home wouldn't require bought-back practices to pay outstanding borrowings, the company said it expected to book non-underlying costs of up to £49m and non-underlying cash costs of up to £27m.

Also, for practices bought back, fee income had not been recognised within revenue, leading to an additional non-underlying charge of £29.0m.

The company said it would rebalance and simplify its fee structure, 'to allow practices to mature more swiftly'.

Pets at Home kept its interim dividend steady at 2.5p per share.

For the full year, it forecast underlying pre-tax profit of of at least £80-85m and would maintain its final dividendat 7.5p per share.

In the first half, underlying pre-tax profit fell 9.3% to £37.9m.

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