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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
PETS AT HOME (PETS) 235.6p
Gain to date: 10.6%
Original entry point: Buy at 213p, 5 September 2019
Our positive call on Pets at Home (PETS) remains 10.6% in the money, even after a warning that first half pre-tax profit will be ‘materially below the prior year’.
Strong results for the year ended 26 March 2020 showed underlying pre-tax profit rising 11% to £99.5m as pet owners stocked up on food and basic medicines during lockdown.
Unfortunately, nearly all of the ‘exceptional demand’ witnessed in the closing weeks of its fourth quarter unwound during the first quarter of its new financial year.
Pets at Home added that the weighting of higher online sales towards food, together with additional coronavirus-related costs, have had an adverse effect on profits, margins and cash flow in the new financial year.
Reassuringly, Pets at Home’s balance sheet health enabled it to maintain the 2020 final dividend at 7.5p, in contrast to most other retailers that have suspended payouts.
Chief executive Peter Pritchard also bought almost £250,000 of shares on results day, demonstrating his confidence that
Pets at Home will emerge as a stronger pet care business in a post-pandemic future.
SHARES SAYS: While the profit warning is disappointing, pet retailing remains a resilient niche. Keep buying.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
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The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.