MARKET REPORT: Pandemic ‘puppy boom’ leads Pets at Home to £80m profit

The pandemic ‘puppy boom’ has handed Pets at Home a double-digit sales boost, putting the retailer on track for a near-£80million profit.

In a third quarter trading update, the UK’s biggest pet care business said revenues increased to £302million during the 12 weeks to December 31.

That was 18 per cent higher than a year earlier, including a 70.7 per cent rise in sales made online.

In a third quarter trading update Pets at Home, the UK’s biggest pet care business said revenues increased to £302m during the 12 weeks to December 31

The number of people in the firm’s ‘VIP’ puppy and kitten clubs – which offer discounts and advice services to customers – also grew 12 per cent to 6.2m.

Following the announcement, Pets At Home’s shares rose 2.2 per cent, or 8.8p, to 412p.

There has been a surge in demand for pets since the start of the coronavirus crisis, with national lockdowns forcing families to spend more time indoors and in their local areas.

Pets At Home, which sells pet food, accessories and services such as insurance and microchipping, has been able to keep its stores open due to its status as an ‘essential’ retailer. 

That particularly helped during the busy December period, when many other retailers were being battered by restrictions but Pets increased sales by 19.3 per cent.

Stock Watch – Eve Sleep

Shares in online mattress shop Eve Sleep fell as it warned of a shortage of materials.

The firm said it had benefited from the pandemic internet shopping boom, with sales rising 6 per cent to £25.2million in 2020.

Read More:  Libya’s interim govt changes nothing for Russia and Turkey

It also narrowed its annual losses by 81 per cent compared to the previous year, to £2million.

But Eve spooked investors with a warning about global shortages of materials saying that the problem ‘remains an industry issue’.

Shares yesterday fell 17 per cent, or 0.98p, to 4.8p.  

The company said the strong performance means it is on track to deliver an underlying profit of £77million for the full year, although that would still be lower than last year’s £99.5million.

Accounting software giant Sage has emerged as another pandemic winner, as more business switch to its so-called cloud services so they can more easily work remotely.

Its shares rose 4.9 per cent, or 28.2p, to 601.2p, after it provided a cheery update on the final three months of 2020. 

During the period, Newcastle-based Sage said it had increased revenues by 1.4 per cent in the final three months of 2020 to £447million – including an increase in software subscriptions of 11 per cent.

Meanwhile, Countryside Properties rose 0.5 per cent, or 2p, to 430p as it reported progress with its plans to split the business.

The builder is in the process of splitting off its private housing division to focus more on social housing and regeneration projects, following pressure from investors.

And yesterday it said an internal reorganisation needed to push forward was set to be finished by March.

In an update on the final three months of 2020, Countryside also said it completed sales of 1,280 homes, an increase of 17 per cent on the previous year.

The average selling price too rose from £394,000 to £404,000, while the firm notched up further agreed sales of £1.3billion that are yet to complete.

Looking to the coming months, Countryside said it still expected ‘sustained levels of strong demand’. Chief executive Iain McPherson said the business had ‘entered the new financial year with a strong forward sales position’.

Video games developer Team 17 fell 3.6 per cent, or 30p, to 810p after revealing it had spent £12million acquiring full rights to the Golf With Your Friends title. 

The game – which has been bought by 5.5m people – lets up to 12 players compete against each other in virtual mini golf, with Team 17 saying the deal will allow it to create new downloadable content.

Brick maker Ibstock surged higher by 7.3 per cent, or 14.4p, to 211.2p yesterday after saying that profits would be slightly above its previous £50million prediction.

The manufacturer said this was due to good demand for building materials, although disruption from the pandemic means its revenues still dropped 23 per cent to around £315million last year.

The FTSE 100 closed down 0.4 per cent, or 24.97 points, at 6715.42, while the FTSE 250 fell 0.4 per cent, or 87.74 points, to 20,793.72.