5 March 2024
If you are covering Greggs’ latest results, please see the following comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“Greggs reported strong profit numbers this morning, with profit before tax up 13% for the year, just slightly ahead of consensus. This follows its Q4 update provided in January where Q4 like for like sales also came in ahead of consensus at 9.4%. This growth has been supported by market share gains from key strategic drivers including store openings, improved app participation, more stores opening into the evening, and delivery which is benefitting from the group’s partnerships with Uber Eats and Just Eat. With the balance sheet having been rapidly rebuilt, Greggs also announced a 40p special dividend today.
“Greggs has had a strong start to 2024, with like for like sales up over 8% for the first nine weeks of the year. Cost inflation has come down and is expected to be between 4-5%, with 80% of energy requirement fixed for the year, and management has four months of forward cover on food and packaged goods.
“The group also plans to increase manufacturing capacity at two of its sites in the Midlands, aiming to be operational by 2026/2027. As a result, capital expenditure is expected to be higher in 2024, and this will likely continue until 2026.”
