£2116.7m market cap
2086p last close
With 2,078 shops, eight manufacturing and distribution centres and 23,000 employees, Greggs is the leading ‘food-on-the-go’ retailer. It uses vertical integration to offer differentiated products at competitive prices.
Investment summary
Greggs’ Q420 sales performance was better than we expected due to a faster recovery in sales despite ongoing COVID-19 restrictions; a strong contribution from delivery; and more net new store openings. The sales performance, improved profitability and a stronger financial position gives management the confidence to return to prior levels of space expansion. We upgraded our FY21 PBT forecast by c 2%. Greggs has many opportunities to accelerate growth in the medium term: more and larger stores; the shift from a single channel to multichannel; further product innovation; and more investment in its supply chain.
Y/E Dec |
Revenue (£m) |
EBITDA (£m) |
PBT (£m) |
EPS (fd) (p) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2018A | 1029.3 | 145.7 | 89.8 | 70.3 | 29.7 | 13.8 |
| 2019A | 1167.9 | 231.9 | 114.2 | 89.7 | 23.3 | 8.5 |
| 2020E | 811.0 | 109.0 | (15.0) | (12.9) | N/A | 37.3 |
| 2021E | 1042.6 | 188.1 | 62.0 | 48.9 | 42.7 | 10.6 |
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 26/02/2021
Sector |
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| Consumer |
Share price graph
Balance sheet |
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|---|---|
| Forecast net cash (£m) | 36.6 |
| 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 |
