Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Pets at Home
Pets at Home [LON:PETS] has published a Q3 trading statement which again sends a strong message out from the business as group revenues rose by 18% for the 12 week period to 31st December. Growth was broad-based with the company firing on all cylinders despite the second national lockdown, whilst the balance sheet has been bolstered by disposals. Full year profits – subject to no negative changes in lockdown opening or allowed veterinary practices – are expected to be at least £77m. As previously announced, the note confirms that the £28.9m worth of business rate relief will be repaid. As Ross Hindle, retail sector analyst at Third Bridge notes, “Pets at Home is continuing to benefit from a rise in pet ownership during the pandemic and a growing trend of pet food premiumisation. Growth in high margin pet food has flowed through into pet accessories, as consumers look to humanize and spoil their new 4-legged friends.”
Sage [LON:SGE], the business software provider, has this morning delivered a trading update for the final three months of 2020. Revenues are slightly ahead, in line with expectations and driven by successful strategic acquisitions. The company continues to successfully derive a larger share of income from recurring revenues, which now account for more than 90% of the total. The note acknowledges that the ongoing health pandemic increases uncertainty in the short term but there’s confidence that the longer term plan will continue unabated.
Brick manufacturer Ibstock [LON:IBST] has issued a trading update for the full year to December 31st. The company has seen trends from late last year continue to improve, with full year revenues now expected to be down by 23%; H2 revenues are off by only around 10%. That strong finish to 2020 means the company is upgrading guidance marginally from its statement of October 2020.
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