Investors warm to Pets at Home after heatwave fires up sales
PRODUCTS keeping Britons’ furry friends cool during the summer heatwave helped Pets at
Home post sizzling sales growth to lift its shares off an all-time low.
Sales of products to stop pets overheating, such as paddling pools and special cooling vests, jumped while its vet services division enjoyed an 18pc surge in revenue, helping to vindicate its new low-price strategy. The pets products store’s overall first-quarter revenue advanced 9.1pc to £277.4m.
New boss Peter Pritchard, who has promised to return the company to growth, said Pets at Home was “capitalising on the hot weather”. But he warned that the firm still needs “a sharpening of focus”.
Upgrading it to “hold”, Liberum argued that four consecutive quarters of like-for-like sales growth above 5pc raised questions over whether earnings had now bottomed out.
The retailer is the most shorted stock on the FTSE 350 but found itself top of London’s leaderboard yesterday. After seeing its share price spiral 64pc since its 2016 peak, Pets at Home clawed back 12.9p to 126p, its best day of trading ever.
Elsewhere, the war on plastic waste boosted profits at paper and packaging giant Mondi as companies looked for environmentally friendly alternatives.
Mondi shrugged off climbing costs for raw materials and currency changes to post a 6pc rise in profits to €490m (£437m) in its first six months. “At some point, the party will end but it does not feel imminent,” UBS told clients. It closed at the top of the FTSE 100, soaring 164p to £22.36.
Rolls-royce rallied 36p to £10.94 after Société Générale upgraded the engineering giant to “buy”, arguing that its £1bn in free cash flow by 2020 target is achievable.
Shares in embattled estate agent Countrywide continued their freefall following its emergency cash call, slumping a further 2.6p to 16p. A second day of sharp decline leaves the firm with a market value of just £38m, a 96pc plunge in four years. Fellow struggler
Travis Perkins entered a fourth day of decline, sinking 31p to £11.02, after the Wickes owner warned on profits on Tuesday.
Kaz Minerals recovered 21.8p to 609.6p after HSBC upgraded it to “hold” on valuation grounds following Thursday’s 28pc slide.
IAG slipped back 15.2p to 669.8p after missing City expectations in its latest figures, as the pound’s slide and industrial action weighed on the airline giant’s trading.
Plastic firm Essentra climbed 25.4p to 507p after profits grew for the first time since 2015. Boss Paul Forman said that the company had “turned a corner” but admitted that there was “still much to do”.
The FTSE 100 outperformed its rivals as RBS pushed higher and mining stocks recovered from Thursday’s slump on fears of an escalation in the US’S trade war with China.
Investors brushed aside Donald Trump’s chief economic adviser, Larry Kudlow, warning that the US president will not back down in his spat with Beijing. The index rallied 83.17 points to 7,659.10, while European markets enjoyed modest gains.