GREGGS PLC
(“Greggs” or the “Company”)
INTERIM RESULTS FOR THE 26 WEEKS ED 1 JULY 2023
Strategic growth plans delivering strong performance
First half financial highlights
| H1 2023 | H1 2022 | |
| Total sales | £844.0m | £694.5m |
| Underlying pre-tax profit excluding exceptional items * | £63.7m | £55.8m |
| Pre-tax profit | £80.0m | £55.8m |
| Underlying diluted earnings per share excluding exceptional items* | 46.8p | 44.8p |
| Diluted earnings per share | 59.0p | 44.8p |
| Ordinary interim dividend per share | 16.0p | 15.0p |
* Excludes impact of £16.3 million exceptional net income related to settlement of a Covid business interruption insurance claim
· Total first-half sales up 21.5%, with company-managed shop LFL** sales up 16.0%
· Underlying profit before tax excluding exceptional items up 14.2% to £63.7 million.
· Reported pre-tax profit includes an additional £16.3 million of exceptional net income recognised in respect of the settlement of a Covid business interruption insurance claim
· Strong cash position of £139 million supporting plans for future investment in growth
· Underlying earnings growth of 4.5% reflects increase in Corporation Tax rate
· Interim dividend of 16 pence per share declared, an increase of 6.7%
** Like-for-like (LFL) company-managed shop sales performance against comparable period in 2022
Strategic progress
· Growing and developing the Greggs estate: 94 new shops opened in the first half, 44 closures; 2,378 shops trading as at 1 July 2023. Strong pipeline of good opportunities and continue to anticipate circa 150 net new shop openings in 2023.
· Expanding our evening trade: continued extension of early evening trading progressing in line with plan. Evening remains the fastest growing daypart and, in the first half, represented 8.3% of company-managed shop sales (H1 2022: 6.5%).
· Developing our digital channels: good progress in improving operational service levels for delivery customers. Trial with second delivery aggregator progressing well.
· Broadening customer appeal and driving loyalty: continued growth in brand health and market share. Further increase in Greggs App participation: 10.6% of company-managed shop transactions scanned in first half (H1 2022: 5.2%).
· Supply chain investment: commenced redevelopment of Birmingham distribution centre, extension of Amesbury distribution centre due to start in the second half. Fourth savoury production line at Balliol Park in Newcastle upon Tyne due to be commissioned in the fourth quarter.
Outlook
The strong trading momentum of the first half has continued into the second half of the year, with good sales reflecting the exceptional value that Greggs offers to customers who need food and drink on-the-go. The rate of cost inflation has started to ease and we expect this trend to continue through the second half.
Whilst uncertainties in the economic outlook remain, we continue to trade in line with our plan and are making good progress against our strategic objective to grow the frequency of customer visits through new channels. As such, the Board’s expectations for the full year outcome are unchanged.
“Greggs strong performance continued in the first half of 2023 as we deliver on our strategic growth plan. With consumers remaining under pressure, we continue to offer exceptional value, which is reflected in our performance and growing market share.
“In the period we continued to open further new shops, extended trading hours into the evening and saw increased participation in the Greggs App.
“Our ambitious plans for growth are on track and our amazing teams are committed to realising the opportunity to become a significantly larger, multi-channel business.”
– Roisin Currie, Chief Executive