FTSE 250 movers: Hochschild loses lustre, happy Pets at Home

FTSE 250: 19,808.09, -0.65% at 1450 GMT.

Pets at Home lifted its full-year profit guidance on Tuesday as it hailed record third-quarter consumer revenues.

The pet retailer said in an update that trading momentum remained robust into the fourth quarter, and with eight weeks of the year left to trade, it now expects FY23 group underlying pre-tax profit to be towards the upper end of the consensus range of £126m to £136m. This is ahead of previous guidance of around £131m.

The company said group revenues rose 8.8% in Q3 to £347.5m, while consumer revenue was up 9% on the same period a year earlier, with growth underpinned by a record number of consumers and "pleasing" volume growth. Compared with pre-pandemic levels, consumer revenues were ahead more than 30%.

Vet Group revenue was up 18.1%, with like-for-like revenues ahead 18%. Meanwhile, retail revenue was 8% higher, with LFL revenues up 7.6%, including a record trading day of more than £8m.

Chief executive Lyssa McGowan said: "We delivered a really pleasing Q3 with acceleration in sales momentum across the platform. Importantly, the quality of our growth remains strong as we continue to grow volumes and attract new consumers through offering compelling value and service, in what remains a challenging inflationary environment.

"It was particularly pleasing to see our accessories category return to growth, supported by the strong performance in our Christmas range, demonstrating that consumers still want to treat their beloved pets in these challenging times. Our Vet Group continued to grow its client base, adding 8,000 new clients a week in Q3, with annualised average practice revenues now reaching £1.1m."

At 1400 GMT, the shares were up 7.4% at 355.80p.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "It’s likely the group is seeing customers spend less on higher margin goods like pet accessories, and a shift to less lucrative food and essentials, but overall this isn’t holding the group back. After all, only certain things in life are guaranteed: death, taxes and feeding your dog."

With its shares under pressure for the second day in a row, Darktrace hit back on Tuesday after Quintessential Capital Management reported a net short position in the cyber security firm and questioned the validity of its financial statements.

Shares in the company initially slumped on Monday, after it emerged that Quintessential had reported a net short position of 6.18m shares, or 0.86% of the company's stock as of 27 January.

Explaining the reasons for its short position, Quintessential said in a report: "After a careful analysis, we are deeply sceptical about the validity of Darktrace’s financial statements and fear that sales, margins, and growth rates may be overstated and close to a sharp correction."

"Our opinion is based primarily on numerous transactions we detected during the period leading to DT’s IPO seemingly involving simulated or anticipated sales to phantom end-users through a network of willing resellers.

"Darktrace seems to have repeatedly used marketing activities to channel funds back into its partners as payment for apparently fictitious purchases. These alleged channel stuffing and round-tripping activities seem to have even involved shell companies in offshore jurisdictions manned by individuals with ties to organized crime, money-laundering, and fraud."

In a brief statement, Darktrace said it was never contacted by the authors of the report for information.

"As a UK listed business, our management team and board take our fiduciary responsibilities very seriously and have full confidence in our accounting practices and the integrity of our independently audited financial statements," it said.

"We have rigorous controls in place across our business to ensure we comply fully with IFRS accounting standards. We're proud of the business we have built, which today helps to protect over 8,100 customers around the world from cyber disruption."

The New York-based asset management firm gave its "strongest possible warning to investors", arguing that Darktrace's equity is "overvalued and liable to a major correction, or worse".

At 1230 GMT, the shares were down 8.9% at 200.35p.

Silver and gold miner Hochschild Mining said on Tuesday that production levels rose in the three months ended 31 December but stated full-year output had fallen short of guidance.

Hochschild delivered attributable production of 97,652 gold equivalent ounces or 7.0m silver equivalent ounces, slightly stronger than in the third quarter, while overall 2022 attributable production was 358,826 gold equivalent ounces and 25.8m silver equivalent ounces.

The London-listed group stated its "small shortfall" versus its overall 2022 guidance was due to a reduced contribution from its Pallancata failing to be fully offset by higher output at its Inmaculada mine as a result of "local community disturbances" in Q4 and civil unrest in Peru since December.

Hochschild reiterated that its all-in sustaining cost for 2022 was expected to be in line with guidance of between $1,330 and $1,370 per gold equivalent ounce - or $18.5 and $19.0 per silver equivalent ounce.

Chief executive Ignacio Bustamante said: "Our mines have delivered a robust operational performance in the fourth quarter, in particular at Inmaculada, where the team has also had to contend with a significant level of local and national disruption and the associated logistical challenges.

"We are proud to have ended the year only marginally below guided production but in line with costs despite significant inflationary pressures."

As of 0905 GMT, Hochschild shares were down 5.49% at 74.95p.

FTSE 250 - Risers

Pets at Home Group (PETS) 354.20p 6.88%
QinetiQ Group (QQ.) 364.20p 4.54%
Barr (A.G.) (BAG) 550.00p 4.36%
Oxford Instruments (OXIG) 2,330.00p 2.19%
Bakkavor Group (BAKK) 118.40p 2.07%
Drax Group (DRX) 641.50p 1.99%
Moneysupermarket.com Group (MONY) 237.20p 1.63%
PureTech Health (PRTC) 258.50p 1.57%
Moonpig Group (MOON) 119.50p 1.53%
Clarkson (CKN) 3,065.00p 1.32%

FTSE 250 - Fallers

Hochschild Mining (HOC) 63.75p -19.61%
Helios Towers (HTWS) 104.20p -10.02%
888 Holdings (DI) (888) 68.15p -8.95%
Darktrace (DARK) 210.70p -4.23%
Trainline (TRN) 278.10p -4.07%
Serco Group (SRP) 147.60p -3.53%
Jupiter Fund Management (JUP) 140.40p -3.51%
IP Group (IPO) 60.80p -3.49%
Future (FUTR) 1,496.00p -3.17%
Quilter (QLT) 95.28p -3.05%