Sparks - Greggs

Greggs’ FY24 results confirm its multi-year growth strategy continues to deliver good results. The increasingly challenging macroeconomic conditions in Q424 were flagged in its January trading statement, which necessitated a downgrade to profit forecasts for the year at the time. Overall revenue growth of c 11% was helped by increases in evening and delivery sales as well as the space expansion, which fed through to c 11% growth in underlying EPS and enabled a similar increase in the total annual dividend. Management is confident of delivering ‘another year of progress’ in FY25, despite the challenging backdrop and inflationary cost pressures. FY25 has started relatively slowly, with like-for-like revenue growth in company-managed stores of 1.7%, albeit this is against the toughest comparative from the prior year of 8.%, which was boosted by inflation. The slow start to FY25, notably a weak January due to the storms and a better February is consistent with comments from some other consumer companies.