Pets at Home raises profit expectations after strong quarter

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Pets at Home Group PLC (LON:PETS) has raised its full-year profit expectations after posting ‘high-teens’ group sales growth during December.


The pet products retailer estimates full-year underlying pre-tax profit, including the previously announced repayment of business rates relief of GBP28.9mln, to be at least GBP77mln.


READ: Pets at Home to take GBP35mln hit as it joins business rates repayment train


Last month, the FTSE 250 group said it would take a profit hit of GBP35mln on profit expectations of GBP93.5mln as it would no longer be able to offset coronavirus (COVID-19) specific costs and restrictions against the relief.


However, as the strong momentum seen in the half-year to October 8, 2020, has continued into the third quarter, it has raised its expectations.


The firm is classified as an essential retailer so it is allowed to trade even during the current lockdown.


At the end of 2020, Pets at Home said it strengthened further its cash position after receiving GBP80mln in initial cash proceeds relating to the completion of the disposal of its specialist group.


“We think that this is further evidence that not only are there more pets in existence, but also that PAH is winning market share due to strong use of customer relationship management,” analysts at Peel Hunt said, upgrading their profit expectations to GBP77mln from GBP65mln.


“Clearly the fourth quarter will be good again for Pets at Home and the upgrade is not unexpected but certainly worth having.”


Shares jumped 7% to 448.28p early on Friday.


–Adds shares, analyst comment–

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