£2476.3m market cap
2448p last close
With 1,969 shops, eight manufacturing and distribution centres and 23,000 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
Greggs has delivered exceptional 11.1% like-for-like sales growth in the first 19 weeks of FY19, a further improvement on impressive growth of 9.6% in the first seven weeks of the year. We upgrade our FY19 and FY20 underlying PBT forecasts by 9%. The company is highly cash generative and is expected to distribute surplus cash in excess of £40m (FY19e: £102.6m) in the form of a special dividend in addition to the H119 dividend.
Y/E Dec |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2017A | 960.0 | 135.7 | 81.8 | 64.5 | 38.0 | 18.3 |
| 2018A | 1029.3 | 145.7 | 89.8 | 71.1 | 34.4 | 16.2 |
| 2019E | 1159.5 | 223.5 | 107.7 | 84.8 | 28.9 | 15.1 |
| 2020E | 1234.2 | 240.8 | 116.6 | 92.7 | 26.4 | 14.1 |
| Last updated on 18/07/2019 | ||||||
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 18/07/2019
Sector |
|---|
| Consumer |
Share price graph
Balance sheet |
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|---|---|
| Forecast net cash (£m) | 102.6 |
| Forecast gearing ratio (%) | N/A |
Price performance
% |
1m |
3m |
12m |
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Key management |
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|---|---|
| Roger Whiteside | CEO |
| Richard Hutton | FD |
