Market Cap£3079m

Last Close 3023p

With 2,146 shops and eight manufacturing and distribution centresGreggs is the leading UK ‘food-on-the-go’ retailer. It uses vertical integration to offer differentiated products at competitive prices. The ambition is to grow revenue to £2.4bn by FY26.

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Investment summary

Gregg’s Q321 trading statement (to 2 October) indicated improved revenue momentum despite recent supply chain and staffing disruptions and an increase in FY21 profit expectations, although rising inflationary pressures (ingredients, staff and utilities) are expected from Q421. This suggests a more challenging FY22 from a cost perspective. Management set a new ‘ambitious’ five-year target (to the end of FY26) to double revenue to £2.4bn (CAGR of 14–15%) from an equal combination of accelerated space growth (number and average size of stores) to reach at least 3,000 stores and space productivity from both ongoing (delivery and evening day part) and new (enhanced loyalty and marketing) initiatives. Simply put, the ambition is to extend Greggs’ strength from daytime retail to an all-day multichannel. Our forecasts are under review.

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2019A 1167.9 231.9 114.2 89.7 33.7 12.4
2020A 811.3 115.4 (12.9) (12.1) N/A 49.6
2021E 1228.9 257.2 135.4 107.0 28.3 9.8
2022E 1309.9 268.7 145.1 116.1 26.0 11.0
Industry outlook

Greggs enjoys an expanding market. The Project Café2017UK report (Allegra World Coffee portal) valued the UK coffee shop market in 2016 at £8.9bn, +12% y-o-y, with branded outlets accounting for £3.7bn. Allegra estimates it could reach £16bn by 2025. The squeezed consumer is a potential concern, although Greggs is well placed for the value switch after widespread refurbishments and extended customer options as it moves to widen its market.

Last updated on 21/10/2021
Content on Greggs
Greggs – Medium-term growth ambition quantified
Consumer | Flash note | 6 October 2021
Greggs – Let’s talk about growth…
Consumer | Update | 6 August 2021
Greggs – Rate of recovery continues to surprise
Consumer | Update | 28 June 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 140.7
Forecast gearing ratio (%) N/A
Price performance
Actual 1.0 19.8 124.9
Relative* (2.2) 14.4 81.1
52-week high/low 3192.0p/1285.0p
*% relative to local index
Key management
Roger Whiteside CEO
Richard Hutton FD