Good morning, it’s Paul here with the SCVR for Thursday.

Timing - Today's report is now finished.

Agenda -

Firstly, here are some brief comments on a few company news items from yesterday.

Greggs (LON:GRG) - trading update

Wandisco (LON:WAND) - more jam tomorrow!

Gresham Technologies (LON:GHT) - 2020 trading update

Auto Trader (LON:AUTO) - trading update - possible read across for small cap car dealer shares?

Mitchells & Butlers (LON:MAB) - exploring a fundraising & trading update

Joules (LON:JOUL) (I hold) - Xmas trading update

Mpac (LON:MPAC) (I hold) - 2020 year end trading update

Judges Scientific (LON:JDG) - 2020 year end trading update


Greggs (LON:GRG)

1920p (up 8% yesterday) - mkt cap £1.95bn

Q4 Trading Update

This is an update for FY 12/2020.

Greggs is a leading UK food-on-the-go retailer, with more than 2,000 retail outlets throughout the country
  • FY 12/2020 revenues down 31% to £811m
  • Year-end net cash of £37m
  • £100m 3-year bank facility available, so liquidity sounds OK
  • Repaid Govt CCFF loan - reinforcing that liquidity is OK
  • Modest full year loss of £15m - not bad considering the covid/lockdown chaos in 2020
  • Successfully developed takeaway & delivery alternatives (5.5% of store sales)
  • New sites accessed by cars “performing particularly well”
  • Q4 shop LFL sales were down 19% - to be expected given changing restrictions, and reduced number of people in city/town centres
  • 820 staff redundancies
  • Plan to open 100 new stores in 2021, net of closures
  • Diary date - preliminary results due on 16 March 2021

Outlook - not great -

Looking ahead, the significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance.
However, we do not expect that profits will return to pre-COVID levels until 2022 at the earliest.

Valuation - these figures look a lot better than the consensus broker forecasts shown on the StockReport, which is good.

Greggs made c.100p EPS in 2019, by the sounds of it we’re looking at possibly getting back to that level in 2022, so 2 years’ time. The share price is 19.2 times that target. That doesn’t strike me as very good value - recovery looks fully priced-in, so why would I want to buy now?

It’s a terrific business,…

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