Greggs enjoyed a 13.5 per cent sales rise to £1.2billion last year boosted by its vegan sausage rolls – but today warned February sales have been much lower because of the poor weather.
The business said that it had a very strong start to 2020 in January, ‘but significant slowdown in February due to storms’.
Profit before tax in 2019, the year it launched the vegan sausage roll, rose by 31 per cent to £108.3million, the Newcastle-based company said, putting it in a ‘strong financial position’ for 2020.
The food-to-go group said it plans to open around 100 new shops this year, including 40 with franchise partners.
The business said that it had a very strong start to 2020 in January, ‘but significant slowdown in February due to storms’. Pictured is a file photo of one of its shops
Greggs also announced it would share a further £12.8million of profits with eligible employees.
All staff benefit from the 10 per cent profit share agreement. The amount they receive will depend on how long they have worked for the company and how many hours they work.
The high-street group opened 138 new shops, while closing 41, leaving 2,050 branches of Greggs open across the country at the end of the year.
Looking ahead, the group, which currently has 2,050 shops up and down the country, wants to expand its portfolio to 2,500 shops.
Chief executive Roger Whiteside said: ‘2019 was an exceptional year of progress for Greggs, during which we experienced a sustained increase in customer visits as increased awareness and appreciation of our brand gathered momentum.
‘There is some uncertainty in the outlook, particularly given the potential impact of coronavirus.
‘This aside we expect to make year-on-year progress and will do so from a strong financial position, supporting our investment for further growth whilst also delivering good returns for all stakeholders.’
Greggs had a ‘phenomenal’ 9.2 percent sales rise last year, boosted by its new vegan range. The vegan sausage roll has helped push up sales and extend the chain’s appeal (file photo)
Greggs enjoyed a bumper 2019, and in January announced it would give each of its staff around £300 in bonuses
Performance: Shares in Greggs have risen in the last few years
Greggs enjoyed a bumper 2019, and in January announced it would give each of its staff around £300 in bonuses after ‘phenomenal’ sales boosted by its new vegan range.
The company announced a £7million windfall payment to its employees, saying its underlying pre-tax profit, even with the payout to staff, would be ahead of expectations when it announces the 2019 results in March.
The company, which hires around 25,000 employees, said is would pay the full bonus to 19,000 staff who joined before April last year, and could expect around £300 each on top of their regular pay at the end of January.
Other employees were set to receive approximately £75 per quarter they have been working at the business.
The group’s shareholders have also enjoyed a bumper year, seeing their total ordinary dividend rise over 25 per cent to 44.9p a share.
While the company’s share price fell over 2 per cent in early morning trading, its performance over the last few years has been fairly strong. Back in 2017, the share price stood at around 1,043p, while today it is closer to the 2,111p mark.
The company is working on developing ‘Next Generation Greggs’, comprising a rewards scheme for loyal customers and ‘access to Greggs across multiple channels at all times of day.’
Despite noting a degree of caution about the impact of storms in February and the potential fallout from the coronavirus, city experts remain generally upbeat about Greggs’ prospects.
John Moore, a senior investment manager at Brewin Dolphin, said: ‘Greggs has posted another strong set of results, with shareholders seeing a tasty 25.8% increase to the dividend and the company signalling the potential for additional returns to come.
‘The baker has shown that the hype around the vegan steak bake last year was no one-off hit, with a strong performance throughout 2019 and a commitment to continuing its investment and innovation programme.
He added: ‘The story of Greggs is one of the most remarkable business transformations of the past few years and, from here, the company is in a great place to self-finance the delivery of its ambitions.’