Pets at Home’s share price has jumped more than 11 per cent this afternoon after the firm looked to reassure investors that its restructuring was on track, although it warned of potential stockpiling ahead of Britain’s departure from the EU.
In a trading update for the 12 week period from 12 October 2018 to 3 January, the company said that group revenue grew 6.3 per cent to £237.2m when compared with the same period in the previous year.
Meanwhile, retail revenue rose 5.5 per cent to £213.4m.
Forecasts were also maintained for full-year underlying profit after tax of £80m-£85m and free cash flow of at least £55m.
The pet care retailer also said it would consider bolstering its inventory by up £8m amid the UK’s impending exit of the European Union.
Why it’s important
Pets at Home’s strategic overhaul came into the spotlight late last year when the retailer announced plans to close 30 of its vet practices amid an 80 per cent crash in profits. Despite the reset in November, however, the firm today said that its 2019 trading remains in line with the guidance issued several months back, in a move that has helped reassure analysts and investors this morning.
Yet despite a six per cent bump in its share price this morning, Pets at Home is still one of the UK’s most shorted stocks, and brokers think that the retailer has significant work to do to reach a point where it can deliver real growth.
What the company said:
Peter Pritchard, group chief executive, commented: "Momentum in retail accelerated over the festive period, culminating in the biggest trading day of our entire history on the Saturday before Christmas. Our omnichannel business delivered exceptional performance, benefitting from investments made earlier in the year, including a new mobile website. This resulted in 4.7 per cent like-for-like growth in retail, an impressive 11 pre cent growth on a two year basis. In such a challenging climate, this performance was only made possible through the hard work of our colleagues across the business."