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magazineBig transactions at Pets at Home following first half results
Pets at Home (PETS) 415p
Gain to date: 79.6%
Original entry point: Buy at 231p, 5 September 2019
Despite a mini wobble around the company’s first half results (24 Nov), our positive call on specialist retailer Pets at Home (PETS) continues to bear fruit.
The company has subsequently announced the £15 million acquisition of animal health telephone service The Vet Connection (30 Nov) and the £100 million disposal of its Specialist referral hospitals to veterinary group Linnaeus (1 Dec).
This latest deal suggests the company is narrowing its focus to the online and retail stores and so-called ‘first opinion’ vet practices.
Following the transactions Shore Capital analyst Greg Lawless commented that there were ‘lots of moving parts to model’ but added: ‘We like the Pets strategy which mixes the products and services and the self-help levers available to the company, through increased personalisation from data from the VIP loyalty club.’
Alongside numbers covering the six-month period to 8 October, Pets said a stronger second quarter performance had continued into the third quarter but also cautioned on Covid-19 risks.
Pre-tax profit increased to £38.9 million, up from £34 million year-on-year, as revenue grew 5.1% to £574.4 million.
SHARES SAYS: We still back the strategy. Keep buying.
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