Pets at Home claws back sales to become pick of the litter
RETAILER Pets at Home underwent a record jump in share price yesterday after reporting results that showed its trading had weathered Covid-19.
Revenues fell just 1pc over the 16 weeks from the end of March to mid-july compared with last year, with an initial sales hit clawed back in the second half of the period.
Strong merchandise sales – including a 71pc increase online – offset a decline in pet buying and use of the group’s grooming salons. The group, which did not participate in the furlough scheme, paid out a one-off bonus of £1.9m to its staff as a thanks for their work during the pandemic.
It said it had “been encouraging to see tangible signs of heightened demand for pet ownership, a good proxy for longer-term growth in the market, as people adopt new attitudes to work and leisure pursuits”.
Pets at Home warned it still could not give a clear steer on how its performance would continue during the year, adding it “could be misleading, at this stage, to extrapolate our recent exceptional momentum across the rest of the year”.
Peter Pritchard, its chief executive, said: “In spite of the rapid, wide-ranging and devastating effects of the pandemic, we have remained open for our customers throughout the period and we are emerging as a stronger business.”
Shore Capital’s Greg Lawless said the road ahead was uncertain, but added: “We think that the company has the right strategy in a structural growth market and has opportunities to allow it to leverage its market-leading position as a retail specialist business.”
Pets at Home closed up 55p at 311.40p, the standout performer on a poor day for London-listed companies.
The FTSE 100 dropped 1.54pc to 5,897.76 as the Government pushed back plans to reopen leisure facilities just a day before restrictions had been set to lift. British Airways-owner IAG found itself in a familiar spot among the biggest blue-chip fallers after reporting a record loss and announcing it will tap shareholders for €2.57bn.
Telecoms group BT took the spot of biggest faller, dropping 9.27p to 98.58p after revealing a £385m hit as lockdown restricted live sports and data roaming.
Rolls-royce continued to suffer as speculation about a £1.5bn rights issue swirled, dropping 13.70p to a one-year low of 231.60p. Although the engineer has military contracts and defence that makes up about a fifth of its total revenues, wider confidence about the aviation sector has devastated its shares.
About a third of blue-chip stocks rose, with property developers Land Securities and British Land among the biggest risers. London Stock Exchange Group also rose after steady results.
Mid-caps dropped only slightly, with the FTSE 250 closing down 0.50pc at 16,932.65. Beyond Pets at Home, there were no results from groups listed on the index, although airline easyjet led fallers – dropping 29.40p to 493.20p as the misery continued for the travel sector.