Why Pets at Home's share price is soaring | Fidelity UK – Fidelity International

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Published 18 November 2021
Fidelity International

Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
SINCE the start of the pandemic more than 3.2 million UK households have got a new pet, according to the Pet Food Manufacturers Association. So that explains the 18.5 million photos tagged #furbaby on Instagram and it has to be music to the ears of investors in Pets at Home Group (PETS).
Shares in the retail-to-veterinary services chain, which offers ‘nose to tail’ products and care for pet owners and their rapidly growing brood of fur babies, have risen by around 70% since the start of last year, thanks in large part to the rise in pet ownership during the pandemic. Please remember past performance is not a reliable indicator of future returns.
Back in May Pets at Home revealed that its revenue had topped £1 billion, growing by 8% to £1.1 billion in the year to March 2021 and it saw no sign of that trend stopping, with its target for revenue growth of up to £600 million in the “medium term”.
As we know, a pet is for life, not just for lockdown, so while other pandemic ‘trends’ may gradually revert back to how they were before, this one cannot.  All of which should make for more positive news when Pets at Home posts its half-year results on Tuesday.
Profits for the six months to the end of September are expected to come in at the top end of analysts’ expectations.
The company, which is the UK’s largest pet supplies retailer, with more than 450 stores and 300 pet grooming salons nationwide, anticipates underlying pre-tax profits of between £120 million and £130 million this financial year, which would exceed analysts’ expectations.
There is no doubt that the pandemic has been a winner for Pets at Home. The pet boom, coupled with the group’s ability to stay open as an “essential” retailer, plus its £20 million investment in the digital side of the business has all contributed to those record-breaking sales.
Business is set to continue to grow with the company revealing that “the strong performance witnessed across both parts of the business during the second half of last year has continued throughout the past six months”.
Chief executive Peter Pritchard had announced that he will be stepping down next summer. Pets at Home has yet to appoint his successor but if all continues as expected, he will be leaving the company he has run for 11 years when it is in tip-top condition.
Check out the latest Monty Markets Money video on the UK’s booming pet industry.
More on Pets at Home Group.
Five year performance
(%) As at 17 Nov
Past performance is not a reliable indicator of future returns
Source: FE, total returns in GBP as at 17.11.21
Important information: Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.

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