£1801.6m market cap
1756p last close
With over 1,950 retail outlets, eight manufacturing and distribution centres and 22,000 employees, Greggs is the UK’s leading ‘food-on-the-go’ retailer. It uses vertical integration to offer differentiated products at competitive prices.
Investment summary
After only seven weeks, Greggs’ vegan sausage roll has already led us to an upgrade, our third in two months. With its smart approach to social media, the company is succeeding in disrupting out-of-date perceptions, which appears to be bringing new customers into the stores. While multiples are optically high, we believe there may be further upgrade potential.
Y/E Dec |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2016A | 894.2 | 125.9 | 80.3 | 62.0 | 28.7 | 13.4 |
| 2017A | 960.0 | 135.7 | 81.8 | 64.5 | 27.6 | 13.3 |
| 2018E | 1029.3 | 144.6 | 89.2 | 70.2 | 25.4 | 12.6 |
| 2019E | 1120.8 | 165.1 | 102.8 | 80.8 | 22.0 | 10.7 |
| Last updated on 20/02/2019 | ||||||
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. In August 2018 Costa was sold to Coca-Cola for 16.4x EBITDA. 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 20/02/2019
Sector |
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| Consumer |
Share price graph
Balance sheet |
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|---|---|
| Forecast net cash (£m) | 48.8 |
| Forecast gearing ratio (%) | N/A |
Price performance
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1m |
3m |
12m |
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Key management |
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| Roger Whiteside | CEO |
| Richard Hutton | FD |
