What to watch: Pets at Home upgrades profit, European stocks continue sell-off, British Airways owner IAG loses €7bn
Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Pets at Home upgrades profit
Pets at Home (PETS.L) has upped its full-year profit expectations for the fourth time since September as more Brits turned to pet ownership during the coronavirus pandemic.
The company now expects profits for 2020 to be around £85m ($118m), up from the £77m management predicted in early January. That includes the repayment of £28.9m in business rates relief.
The improved results reflect “strong and broad-based growth across all channels and categories”, it said.
Pets at Home stores have remained open throughout the pandemic and various other lockdown restrictions, due to it being classed as an “essential” retailer.
The retailer added that its Puppy and Kitten Club members grew by almost 50%, while new clients across its veterinary practices averaged 10,000 per week over the second half of 2020. Subscriptions rose to over 1 million.
"The rapid improvement is evidence of just how strong recent trading has been, and the effect rolling lockdowns are having - both on pet ownership and our willingness to splash out on our furry friends," Nicholas Hyett, equity analyst at Hargreaves Lansdown, said.
"There is always a risk of course that newly acquired pets fall out of favour once lockdown comes to an end, but for now pet retail is in the jaws of a boom.”
Shares climbed 6% on the back of the news.
WATCH: British Airways parent firm demands digital health passes to help reopen skies as it dives to £6.5bn loss
European stocks continue sell-off
European stock markets opened in the red on Friday, continuing the global sell-off, with the FTSE 100 (^FTSE) falling 0.81% after opening before pared back some losses by mid-morning.
The CAC (^FCHI) tumbled 0.36% and the DAX (^GDAXI) was 0.18% lower after sharp declines on Wall Street on Thursday after a sharp spike in government bond yields in the last 24 hours, with investors adopting a risk-off approach.
Markets were hedging the risk of an earlier rate hike from the Federal Reserve, despite officials vowing earlier in the week that any move was long in the future.
Jim Reid at Deutsche Bank said: “Yesterday proved to be nothing short of a rout in global markets, with the selloff in sovereign bonds accelerating as investors looked forward to the prospect of a strengthening economy over the coming months.
“Matters weren’t helped either by stronger-than-expected economic data, which only added to the fears that the Fed could withdraw stimulus sooner than anticipated, and helped Treasury yields see their biggest daily rise since March."
READ MORE: Targeted tax rises won't derail COVID recovery, UK chancellor told
The pound was also under pressure, falling back below $1.40, as traders turned to safer assets such as the dollar amid the sell-off across global markets.
Sterling slipped to $1.3946 against the dollar (GBPUSD=X), down from the three-year highs of $1.42 seen earlier in the week, while it dipped half a eurocent against the euro (GBPEUR=X) to €1.1474. The currency hit a high of €1.17 during the week.
British Airways owner IAG loses €7bn
IAG (IAG.L), the owner of airlines like British Airways, Aer Lingus, and Iberia, lost €7.8bn (£6.8bn, $9.5bn) last year as the COVID-19 pandemic ravaged the airline industry.
IAG said on Friday it made a pre-tax loss of €7.8bn on income of €7.9bn in 2020. The company made an operating loss before exceptional costs of €4.4bn, which was in-line with forecasts.
Revenue for the year was down 70% as passenger numbers slumped. IAG said it flew just a third of its 2019 capacity last year.
READ MORE: UK travel stocks buoyed by Brits booking summer holidays
"Our results reflect the serious impact that COVID-19 has had on our business," chief executive Luis Gallego said. "We have taken effective action to preserve cash, boost liquidity and reduce our cost base.
"Despite this crisis, our liquidity remains strong. At 31 December, the Group's liquidity was €10.3bn including a successful €2.7bn capital increase and £2bn loan commitment from UKEF. This is higher than at the start of the pandemic."
WATCH: European stocks pull back after sharp global losses
