Greggs shares spike 5% following bullish annual update

Greggs plc (LON:GRG) have seen their shares bounce following a bullish trading update published on Tuesday.

The bakery goods firm saw a double digit sales rise across 2019, saying that the year was a ‘record’ one.

“Greggs’ exceptional performance in 2019 comes after a multi-year programme of change and improvement. More customers are recognising the benefits of this and are shopping with us in increasing numbers. Our colleagues have shown the resilience and versatility necessary to deliver transformational change across the business, and this has now set us up for the next phase of growth. We will embrace the opportunities this presents whilst continuing to run the business in a responsible manner, such that we deliver sustainable long-term growth for the benefit of all stakeholders.”

Across Greggs’ financial year, which ended on December 28 – the firm noted that sales climbed 14% to £1.17 billion from £1.03 billion.

The headline take was that pretax profit surged 31% from £82.6 million in 2018 to £108.3 million in 2019.

Notably, like for like sales in stores also jumped by a record 9.2% across the recently ended financial year.

Greggs also made net openings of 97 stores across the year, with a total store portfolio of 2,050 as of December 28.

In the nine weeks on from the end of the financial year, Greggs added that sales have increased 7.5% year on year, following a strong January performance.

The chairman noted: “Notwithstanding the tough conditions that continue to affect the UK retail sector, and uncertainties that remain in the global economy such as the potential impact of Coronavirus, Greggs has made a strong start to the new year, attracting more customer visits as consumers become increasingly aware of the breadth, quality and value of our offer.”

However, February did see a slow down for the bakery goods firm, due to stormy conditions in the UK.

Greggs increased their annual dividend by 26% to 44.9p for the 2018 figure of 35.7p.

Roger Whiteside OBE, Chief Executive commented: “2019 was an exceptional year of progress for Greggs, during which we experienced a sustained increase in customer visits as increased awareness and appreciation of our brand gathered momentum. Our exceptional performance was founded on the changes that we have made across our multi-year strategic investment programme, which has delivered transformational change across the business and has now set us up for the next phase of growth.

“We made a very strong start to 2020 in January, but in February saw a significant slowdown in sales growth as a result of the storms that have affected the UK. There is some uncertainty in the outlook, particularly given the potential impact of Coronavirus. This aside we expect to make year-on-year progress and will do so from a strong financial position, supporting our investment for further growth whilst also delivering good returns for all stakeholders.”

Greggs see successful year as deal with Just Deal completes

In January, Just Eat (LON:JE) announced that they had agreed a delivery partnership with Greggs.

The FTSE 100 listed firm told shareholders that they intention on having Greggs’ bakery food products on delivery by the end of 2020.

Greggs delivery has been trialled on Just Eat in London, Newcastle and Glasgow and plans to launch the service in Birmingham and Bristol are set to commence this week.

In the update, it was also noted that services in Manchester, Leeds, Sheffield and Nottingham will all be ready in Spring.

“Greggs has proved extremely popular with our customers, especially during breakfast, demonstrating that as a nation we love the convenience of getting our favorite food delivered – be it a Greggs bacon baguette and coffee on a Tuesday or your local Thai at the weekend.” Andrew Kenny, Just Eat’s UK Managing Director commented.

Greggs massive employee bonus

Additionally, Greggs also added that will share a £7 million bonus among its employees after an “exceptional” year for the business.

Following the success of its’ new vegan range – including a vegan steak bake and a vegan sausage roll, the firm rewarded the hard work and dedication of its employees.

Shares in Greggs trade at 2,198p (+5.17%). 3/2/20 10:01BST.

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