The unlikely success of a meatless sausage roll has beefed up returns at Greggs (GRG) since the start of the year. The launch was expertly marketed, drawing curiosity from non-vegans and the ire of Piers Morgan. It contributed to a 9.6 per cent rise in like-for-like sales in the first seven weeks of 2019, compared with 2.9 per cent over the course of 2018. This growth will undoubtedly taper as the hype dies down, but the roll is only due to reach the group’s full store network this week, and chief executive Roger Whitehead says the group has been “chasing demand with supply” since the launch in January.
Greggs had to contend with the ‘Beast from the East’, followed by an unusually hot and dry summer, which impacted business in the first half of 2018, but the group made up significant ground, ending the year with adjusted operating profits up 9.1 per cent to £89.1m.
Management is looking for new ways to reach customers. Following the success of a click-and-collect trial for breakfast items, along with home-delivery trials with both Deliveroo and Uber, the group is looking to expand in both areas.
Bloomberg consensus figures forecast adjusted EPS of 77.9p in 2019, up from 70.2p in 2018.
| GREGGS (GRG) | ||||
| ORD PRICE: | 1,808p | MARKET VALUE: | £1.83bn | |
| TOUCH: | 1,804-1,813p | 12-MONTH HIGH: | 1,854p | LOW: 939p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 325p | NET CASH: | £88.2m | |
| Year to 29 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 0.81 | 49.7 | 37.4 | 22.0 |
| 2015 | 0.84 | 73.0 | 57.3 | 28.6 |
| 2016 | 0.89 | 75.1 | 57.8 | 31.0 |
| 2017 | 0.96 | 71.9 | 56.6 | 32.3 |
| 2018 | 1.03 | 82.6 | 65.2 | 35.7 |
| % change | +7 | +15 | +15 | +11 |
| Ex-div: | 25 Apr | |||
| Payment: | 30 May | |||
