Market Cap£2569.9m

Last Close 2530p

With 2,101 shops, and eight manufacturing and distribution centres, Greggs is the leading UK ‘food-on-the-go’ retailer. It uses vertical integration to offer differentiated products at competitive prices.

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Investment summary

Greggs’ trading update indicated a strong rebound in trading since the re-opening of non-essential retail in April 2021, with positive like-for-like (LFL) sales growth versus FY19, earlier than we had expected. This is significant as it has been achieved despite not operating at full potential (ie reduced SKUs, shorter opening hours and other social distancing measures) and competition has been more limited, though both will normalise in coming months. With strong cost controls, including temporary benefits, the board believes that FY21 profits could be around 2019 levels in the absence of further restrictions. We upgraded our FY21 PBT forecasts by 64%, due to a less pessimistic LFL sales assumption.

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 28.2 10.4
2020A 811.3 115.4 (12.9) (12.1) N/A 41.5
2021E 1166.0 227.4 106.5 85.2 29.7 9.2
2022E 1266.7 241.8 119.2 97.8 25.9 10.2
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 21/06/2021
Content on Greggs
Greggs – Recovering better than expected
Consumer | Update | 11 May 2021
Greggs – Looking forward
Consumer | Update | 17 March 2021
Greggs plc – New national lockdown tempers outlook
Consumer | Update | 7 January 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 148.4
Forecast gearing ratio (%) N/A
Price performance
Actual 2.1 22.8 41.5
Relative* 1.4 16.7 22.5
52-week high/low 2618.0p/1119.0p
*% relative to local index
Key management
Roger Whiteside CEO
Richard Hutton FD