Last close As at 05/08/2026
GBP19.33
▲ −13.00 (−0.67%)
Market capitalisation
GBP1,977m
Research: Consumer
Greggs’ AGM trading update for the first 19 weeks of the year indicates both an improvement in revenue growth in recent weeks and an acceleration in growth, given comparatives from FY25 became tougher as the period progressed. The still-challenging market is highlighted by volumes continuing to decline on a two-year basis, but the trend has clearly become less negative in recent weeks. Menu innovation, an ever-present focus for Greggs, continues to provide self-help and there is good momentum in B2B revenues. It will be interesting to see how the trial of the first Greggs outlet in an overseas airport – South Tenerife, which is highly frequented by UK holidaymakers – progresses.
| Year end | Revenue (£m) | PBT (£m) | EPS (£) | DPS (£) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|
| 12/24 | 2,014.4 | 189.8 | 1.37 | 0.69 | 12.0 | 4.2 |
| 12/25 | 2,151.2 | 171.9 | 1.23 | 0.69 | 13.4 | 4.2 |
| 12/26e | 2,305.8 | 172.9 | 1.24 | 0.69 | 13.2 | 4.2 |
| 12/27e | 2,468.2 | 179.5 | 1.29 | 0.69 | 12.7 | 4.2 |
For the first 19 weeks of FY26 Greggs has reported total sales growth of 7.5% and like-for-like growth in company-managed stores of 2.5%, both of which compare favourably with the respective 6.3% and 1.6% growth rates for the first nine weeks of the year. The company saw a similar improvement in trading at the start of FY25 with 1.7% total sales growth in the first nine weeks and 2.9% growth for the first 20 weeks, highlighting the slightly tougher comparative towards the end of the period. With price increases of just under 4% relatively consistent through the start of FY26, it is clear volumes are still declining, but at a lower rate than previously.
Space growth in FY26 will be H2-weighted again, with 20 net new stores opened so far this year, from the guided 120 net openings for the year. With no change to the outlook for like-for-like cost inflation of around 3%, management’s expectations for FY26 profit remain unchanged. The majority (85% for FY26 and 50% for FY27) of energy and fuel costs are covered by forward purchase agreements, and there is around five months of cover for food and packaging. This implies some price input risk for food and packaging in Q426, which represented 33% of the cost base in FY25, but management remains confident of recovering input inflation through a combination of price increases and operating efficiencies. There is a clear message that profit growth will be H1-weighted in FY26, given the easier comparative from weak revenue growth in H125; the operating cost efficiencies that began to be realised in H225; and the fact that H226 will bear the incremental operating costs as the new frozen food manufacturing and logistics facility comes on stream in H226.
FY26’s prospective P/E multiple remains at the low-end of its historical range, an average of c 18x since FY13. Equally, the prospective dividend yield compares favourably versus a historical average of 2.8%. With peak capex behind it, Greggs is well-placed to consider additional returns to shareholders.
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Research: Healthcare
QBiotics is a clinical-stage biotechnology company developing novel small molecules derived from natural sources, with the potential to access multiple blockbuster markets. Lead asset, tigilanol tiglate (TT), is an intratumoural therapy involved in three Phase II trials, in soft tissue sarcoma (STS), for which the FDA has granted Orphan Drug Designation (ODD); head and neck cancer (HNC); and breast cancer, the latter of which is 90% backed by a strategic partner. Early clinical data have been promising, in our view, with high response rates and durable tumour control, providing a robust foundation for further development. Beyond oncology, QBiotics has programmes in wound healing and antibiotics, giving additional optionality from its underlying discovery platform, capable of generating multiple drug candidates. QBiotics is planning a capital raise (seeking up to c A$40m), with the proceeds to be used to augment the oncology programme for a commercial partnership with a big pharmaceutical company, and to extend the company’s operating runway ahead of a potential Australian Securities Exchange (ASX) IPO in 2027.