Greggs trading update

The leading bakery food-on-the-go retailer in the UK, with almost 1,700 retail shops throughout the country.  I have a holding in my income portfolio (epic code: GRG).

Greggs released a trading update today, describing the continuing momentum within the business.  For the whole of 2014  (which was the 53 week period ended 3 January 2015) total sales grew by 5.5% including the impact of the additional trading week and like-for-like sales for their own shops were up by 4.5%.  This compares to a 3.1% growth at the interim stage and LFL sales growth of 3.2% for their own shops.

 

Sales have steadily improved during the year with their own shop like-for-like sales growth in the fourth quarter averaging 6.0%, so this compares very favourably with the 3.2% at the interim stage mentioned above and 5.4% for the 12 weeks to 13 September (mentioned in their 15 September IMS). 

 

For the five week Christmas trading period ended 3 January 2015, total sales grew by 7.6% and like-for-like sales grew by 8.2%.

 

During the year Greggs opened 50 new shops, including 20 franchised units (68 last year including 15 franchised units) and increased the number of shop closures to 71 (68 LY) resulting in 1,650 shops trading at 3 January 2015 (1671 LY), including 45 franchised shops (25 LY).  Management successfully completed 213 shop refurbishments in the year, compared to 216 last year. 

 

Management have stated that "...Following the very strong finish to the financial year we now anticipate that we will report full year results above previous expectations..."

The momentum in the SP over the past year has been quite exceptional, as the business has continued to develop the food-on-the go model:

Click on chart to enlarge