Sales are rising at Greggs (GRG) the baker, driven by its pursuit of the 'food-to-go' market. Breakfast and coffee sales were stand-out performers during the first half, while the group's sandwich range has prospered after last summer's relaunch. The baker reported strong growth in its 'balanced choice' products, aimed at health-conscious consumers and slimmers, which now include a range of no-added-sugar drinks. Product extensions, as well as Greggs' £2 meal value deals, helped drive up like-for like sales by 5.9 per cent.
Greggs is also ploughing ahead with its refurbishment programme, switching 118 new stores to its 'bakery food-on-the-go format'. The baker also moved back into net store growth, opening 44 and closing 30. Accordingly the group's capital expenditure increased by a third to £31.3m, with this year's total spend expected to come in at around £65m. While Greggs' consolidation of its in-store bakeries depressed profits in 2014, it resulted in a £2.4m cost-reduction this year and boosted the group’s operating margin. Other structural cost reduction plans are expected to generate £5m-£6m in savings over the full year.
Broker N+1 Singer expects adjusted EPS of 53.4p for the full year, up from 43.4p in 2014.
GREGGS (GRG) | ||||
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ORD PRICE: | 1,221p | MARKET VALUE: | £1.2bn | |
TOUCH: | 1,221-1,223p | 12-MONTH HIGH: | 1,254p | LOW: 489p |
DIVIDEND YIELD: | 1.9% | PE RATIO: | 24 | |
NET ASSET VALUE: | 236p | NET CASH: | £41.4m |
Half-year to 4 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2014 (restated) | 374 | 8.6 | 6.2 | 6.0 |
2015 | 398 | 25.6 | 20.0 | 7.4* |
% change | +6 | +197 | +223 | +23 |
Ex-div: 3 Sep Payment: 2 Oct *Excludes special dividend of 20p a share paid in July 2015. |