Investors left purring over Pets At Home profit upgrade

PETS At Home surged again yesterday after the retailer issued its fourth profit upgrade since September, with the pandemic-driven boom in pet ownership showing no signs of slowing.

The company now expects to post underlying pre-tax profits of £85m, up from previous guidance of £77m. It comes after trading in recent months beat expectations, with sales boosted during the current lockdown as Britons continue to work from home. Pets At Home is classed as an “essential” retailer so its stores have remained open throughout the pandemic.

The company said: “Notwithstanding [the] challenging external environment, our performance over the last eight weeks has been ahead of expectations, with continued strong and broad-based growth across all channels and categories.”

Greg Lawless, an analyst at Shore Capital, said: “There is no doubt that Pets At Home has been a Covid winner.”

Shares rose 11.4p to 394.4p, leaving Pets At Home as the second-biggest riser on the FTSE 250.

It was a poor day for UK equities overall, with the FTSE 100 plunging and mid-caps also dropping.

Insurer RSA had a pretty muted performance after what may be its final set of results as a publicly listed company as it prepares for a takeover.

A drop in non-covid-19 claims – prompted by people staying indoors and avoiding risky activity – offset lower investment income and claims related to the pandemic.

Profit before tax for 2020 came in at £483m, little changed from 2019’s £492m.

Chief executive Stephen Hester said: “We are pleased to report excellent results for RSA in 2020.

“Underwriting profits are sharply up to new record levels and return on tangible equity has risen above our target range.”

The group’s shareholders have approved a £7.2bn joint takeover from Tryg and Intact, which is due to complete in the coming months.

Its shares edged down 0.8p to 675.4p.

British Airways owner IAG rose 5.7p to 192p, becoming the only substantial riser on the FTSE 100, after the group struck a cautiously optimistic tone on prospects for air travel this summer.

Property portal Rightmove dropped hardest among blue chips, falling 41p to 565p as a slump in annual sales and profits failed to offset an upbeat outlook.

The FTSE 100 group reported revenues for 2020 of £205.7m, down 29pc from 2019, while operating profit plunged 37pc to £135.1m.

It announced a final dividend of 4.5p per share, having scrapped its 2019 payout due to the pandemic.

Membership numbers dropped 3pc over the year to 19,197. The group expects levels of agents paying to be on the portal to remain steady through 2021.

Jefferies analyst Giles Thorne cautioned the company’s guidance had been written as though “all the events of 2020 never happened”.