REG - Greggs PLC - Q4 Trading Update

GreggsAnnouncement

10/01/2024 07:00

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RNS Number : 1668Z  Greggs PLC  10 January 2024

 

 

10 January 2024

 

GREGGS PLC

("Greggs" or the "Company")

 

Q4 TRADING UPDATE

 

Further strong trading through fourth quarter

 

 

Q4 highlights

 

·    Financial year 2023* ("FY23") total sales up 19.6% to £1,809 million
(2022: £1,513 million)

·    Company-managed shop like-for-like** sales up 13.7% for FY23

·    Company-managed shop like-for-like** sales up 9.4% for the fourth
quarter, with continued growth in transaction numbers and reduced contribution
from price inflation

·    Strong LFL performance reflects popularity of the Greggs brand as we
further develop our range and make Greggs more accessible through digital
channels and extended trading hours

·    Delivery service rolled out to 710 shops with Uber Eats, alongside
the existing service offered with Just Eat

·    A record 220 new shops opened in the year, with 33 closures and 42
relocations resulting in a net 145 new shop openings, and 2,473 shops trading
as at 30 December 2023

·    Good progress in development of supply chain capacity, supporting
growth plans

·    Year-end net cash of £195 million (2022: £192 million)

·    Inflationary pressures reducing

·    Anticipate full year outcome in line with our previous expectations

* 52 weeks ended 30 December 2023 (2022: 52 weeks ended 31 December 2022)

** Like-for-like (LFL) company-managed shop sales performance against
comparable period in 2022

 

Roisin Currie, Chief Executive commented:

"2023 was a year of further progress by Greggs.  I am proud of our teams, who
did a fantastic job serving more customers as we continue to grow our shop
estate and offer greater availability through digital channels and extended
trading hours.

"We enter 2024 with plans to continue to invest in our shops and expand supply
chain capacity to deliver the growth strategy, supported by our strong balance
sheet.  Our value-for-money offer, and the quality of our freshly prepared
food and drink continue to evolve and position us well for further progress in
the year ahead."

Trading performance

 

Total sales for FY23 were £1,809 million, an increase of 19.6% compared with
2022. Like-for-like sales in company-managed shops were 13.7% higher than
those seen in 2022.  Fourth quarter like-for-like sales in company-managed
shops grew by 9.4%, with continued growth in transaction numbers and a reduced
contribution from price inflation as we progressed through the year.  The
strong finish to the year reflected the favourable Christmas trading pattern
and less disruption than we saw in the same period of 2022.

 

Our strong LFL sales performance demonstrates the popularity of the Greggs
brand as we further develop our range and make Greggs more accessible through
digital channels and extended trading hours.  By the end of 2023 Greggs was
available for delivery on the Uber Eats platform in 710 of our shops, in
addition to the service provided through our existing partner Just Eat.

 

Seasonal lines, including our iconic Festive Bake, Chocolate Orange Muffin and
Christmas Lunch Baguette were in high demand in the fourth quarter, featuring
alongside our shop-baked Sweet Mince Pies and festive hot drinks. Pizza
continues to perform strongly during the day and into the evening, with pizza
boxes and pizza bundle deals continuing to contribute to our growth.

 

Shop estate and supply chain development

 

In 2023 we opened a record 220 new shops and closed 75 shops (33 closures and
42 relocations), giving a total of 2,473 shops trading at 30 December 2023
(comprising 1,970 company-managed shops and 503 franchised units).  Our shop
openings are giving customers more convenient access to Greggs, whilst our
relocation activity increases our capacity in existing successful
catchments.

 

The planned investment in our supply chain is progressing well, which supports
our ambitious growth plans.  A fourth production line is currently being
commissioned at Balliol Park in Newcastle upon Tyne and will provide
significant additional manufacturing capacity for our iconic savoury rolls and
bakes.  Work is progressing well to expand the logistics capacity of our
Birmingham and Amesbury distribution centres, both of which are due to come on
stream later in 2024.

 

Financial position and outlook

 

Greggs ended 2023 with a cash position of £195 million (2022: £192 million),
which will support our plans to invest further in growing both our shop estate
and supply chain capacity in the years ahead.  The pipeline of new shop
opportunities remains strong, and we expect to open between 140 and 160 net
new shops in 2024.

 

Given the strong trading in the final quarter the Board anticipates reporting
a full year outcome for FY23 in line with its previous expectations.

As expected, inflationary pressures are reducing and with good forward cover
on food, packaging and energy we anticipate a more stable cost base in the
coming year.  Wage inflation remains, although higher rates of pay across the
economy will also provide support to consumer incomes.  Overall, we are
confident that Greggs can deliver another year of good progress in 2024 as we
continue our plans for sustainable growth.

 

 ENQUIRIES:
 Greggs plc                                Hudson Sandler
 Roisin Currie, Chief Executive            Wendy Baker / Hattie Dreyfus /

 Richard Hutton, Chief Financial Officer   Nick Moore / Emily Brooker

 David Watson, Head of IR
 Tel:  0191 281 7721                       Tel:  020 7796 4133 greggs@hudsonsandler.com
                                           (mailto:greggs@hudsonsandler.com)

 

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