MARKET REPORT: Pets at Home proves to be investors’ best friend as latest figures show how much owners have doted on their animals during lockdown
Britain’s millions of pet owners have never taken more comfort in their furry friends and critters than during lockdown.
They were a solace – and likely a distraction – for office workers suddenly forced to work from their kitchen tables or spare bedrooms and valuable companions for those with limited chances of other social contact.
A glance at retailer and vets group Pets at Home’s latest figures shows how much owners have doted on their animals since the most stringent pandemic restrictions have been lifted.
Over the 16 weeks to July 16 revenues were just 1 per cent below the same period of last year – a far better performance than the City had been expecting.
Turnover fell 13 per cent during the first eight weeks, when Pets at Home’s 453 stores were open at reduced capacity, still selling essential items, while the company shuttered other services such as dog grooming and its vet practices were limited in what they could offer. But in the second eight-week block revenue was 12 per cent higher than last year.
It paid a £1.9m bonus to frontline staff as a thank you for working throughout the worst of the crisis. The surge in adoption of dogs and cats during lockdown bodes well for business, the company said, and the number of people signed up to its VIP member service also grew sharply.
But the FTSE250-listed group warned it is not out of the woods yet. Further lockdowns could sting it again, economic hardship can make it more difficult for people to keep their pets and it has said business rates relief won’t cover the added costs from the pandemic. Relieved shareholders were buoyed by the numbers though, with the stock rallying 21.5 per cent, or 55p, to 311.4p and sending the company straight to the top of the mid-cap leaderboard.
Pets at Home was the brightest spot on an otherwise dull or downright downcast Friday on the stock market.
Pharmaceuticals group Glaxosmithkline was hardly moved by news that the US government will pay up to £1.6billion for 100m doses of the experimental Covid vaccine it is developing with France’s Sanofi.
The deal is the largest yet – and gives the US the chance to buy an extra 500m doses at a later date. But GSK rose just 0.04 per cent, or 0.6p, to 1529.8p.
Retailer JD Sports fell 0.8 per cent, or 5p, to 605.6p after suffering a second pay revolt from investors at its annual meeting. Nearly a third of investors voted against its remuneration report and 30 per cent voiced their frustration about performance-related bonuses.
After a promising start to the day Lucky Strike and Dunhill cigarette-maker British American Tobacco closed in the red. Profit rose by 19 per cent to £4.6billion between January and June, outperforming expectations, as it sold more premium cigarettes and vaping products. But shares fell 5 per cent, or 132p, to 2524.5p.
Mining giant Glencore also reversed earlier gains, finishing down 1.4 per cent, or 2.4p, at 174.6p after reporting its oil traders managed to take advantage of wildly swinging prices in recent months.
The FTSE100 closed down 1.5 per cent, or 92.23 points, at 5897.76, while the FTSE 250 fell by a less pronounced 0.5 per cent, or 84.4 points, to end the week at 16932.65.
Travel companies weighed on the mid-cap index after Tui (down 6 per cent, or 18.4p, to 288.1p) cancelled more Spanish holidays.
Beleaguered cruise operator Carnival fell 5.7 per cent, or 50p, to 826.6p and Easyjet lost 5.6 per cent, or 29.4p, to end at 493.2p.
On AIM, Greenland-focused miner AEX Gold closed at 46p after its first day of trading in London. It started at 45p per share, rising 2 per cent, or 1p, by the close.