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Pets at Home expects continued high costs during pandemic but sales recover in weeks as non-essential services restart

In the 16 weeks to July 16, 2020, the group's revenue dipped 0.7%, with a 13% decline in the first eight weeks turning into a 12% jump in the subsequent eight weeks

Pets at Home Group PLC - Pets at Home expects continued high costs during pandemic but sales recover in weeks as non-essential services restart

Pets at Home Group PLC (LON:PETS) has said the higher costs brought on by the coronavirus pandemic will not be offset by the current year's business rates relief.

The pet products chain has been operating as an essential retailer, but said it still sees risk in a potential second wave of infection and the economic crisis overall.

READ: Pets at Home a “dead cert income fund holding”, says Peel Hunt

In the four months to July 16, 2020, Pets at Home revenue dipped by 0.7%, with a 13% decline in the first eight weeks recovering to a 12% jump in the subsequent eight weeks.

During the initial period of lockdown, the retailer was allowed to operate only at a reduced capacity, just selling essential products such as food and keeping grooming salons closed.

Cash balances and undrawn banking facilities were £267mln at the end of the quarter to end-June, the first of its financial year.

The FTSE 250-listed firm said it is planning to launch an upgraded click and collect service, while it has increased the use of telemedicine in its veterinary practices to follow safety measures during the pandemic.

It also paid a one-off bonus of £1.9mln to its frontline workers, in addition to the usual annual bonus, and created a £1mln Colleague Hardship Fund for staff, vet partners and their teams if they experience financial difficulties, while £1mln was allocated to charities.

“This is high-quality sales growth: underlying pet numbers are up but it is clear that the new customers won over lockdown are starting to become loyal,” analysts at Peel Hunt commented in a note to clients.

Pets at Home shares rose 6% to 272.57p on Friday at the opening bell.

Quick facts: Pets at Home Group PLC

Price: 305.4 GBX

LSE:PETS
Market: LSE
Market Cap: £1.53 billion
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