Greggs: Bakery chain on a roll as sales up once again
Greggs reported another strong set of results for the first half of the year as customers continued to head to the budget bakery.
Total sales for the 26 weeks to June 29 reached £960m, up by nearly 14 per cent from £844m last year. And underlying profit before tax at the London-listed company rose by 16.3 per cent to £17.1m.
The firm credited the boost in numbers to a partnership with Uber Eats and the roll-out of its evening trade plan.
Post-4pm sales grew “more strongly than the average like-for-like rate”, Greggs said.
“Over the long term we believe that the evolution of our menu and the extent of our suburban shop estate offers a significant opportunity to grow our share of both the walk-in and delivery evening markets,” it said.
The chain invested £102m in capital expansion over the half-year, which includes the redevelopement of its Birmingham distribution centre and the extension of its Amesbury centre.
Earlier this year, it also announced a lease agreement for a new frozen production and logistics facility in Derbyshire, as part of its effort to open 1,000 more stores and double revenue in the coming years.
Chief executive Rosie Currie said: “Greggs has made good progress in the first half of the year, further broadening our range of on-the-go food and drink whilst making it more accessible to more customers. Our success is founded on the exceptional value that Greggs offers to customers looking for food and drink on-the-go and the fast and friendly service delivered by our colleagues.
“Our cost outlook for 2024 remains unchanged and we continue to trade in line with our plan. The Board remains confident in the long-term growth strategy, and we are investing to support that growth.”
Greggs declared an interim dividend of 19p per share, up by 16p from 2023, with shares in the chain having risen by nearly 12 per cent in the year to date.
“Greggs’ appeal still remains as strong as ever… its affordable prices and presence on the high street makes it a convenient option for consumers, as footfall returns to city centre as more workplaces return to their offices post pandemic,” Jocelyn Paulley, Co-Head of the Retail Sector at international law firm, Gowling WLG said.
“Additional strategic partnerships will also likely be in the company’s plan following its tie-up with Primark last year as CEO Roisin Currie looks for further ways to enhance the business’ margins and satisfy the appetite of shareholders,” Paulley added.
Mamta Valechha, consumer discretionary analyst at Quilter Cheviot said: “Greggs has unique growth opportunities and a compelling value proposition, which puts it in a strong position particularly in this tough consumer landscape.”
However, the bakery chain kept its full-year guidance for 2024 unchanged.