TIDMGRG
RNS Number : 6715K
Greggs PLC
06 January 2021
6 January 2021
GREGGS plc
FOURTH QUARTER TRADING UPDATE
Greggs is a leading UK food-on-the-go retailer,
with more than 2,000 retail outlets throughout the country
-- Financial year 2020* total sales of GBP811m (2019: GBP1,168m)
-- Fourth quarter company-managed shop like-for-like sales
averaged 81.1% of the equivalent 2019 level
-- Fourth quarter delivery sales were 5.5% of company-managed shop sales
-- 28 net new shops opened in the financial year 2020
-- 2,078 shops in the estate as at 2 January 2021
-- Year-end net cash position GBP37m
-- GBP100m, three-year Revolving Credit Facility put in place, CCFF loan repaid
-- Full year loss before tax expected to be up to GBP15m
* 53 weeks ended 2 January 2021 (2019: 52 weeks ended 28
December 2019)
Chief Executive Roger Whiteside comments:
"In a year like no other I am enormously proud of the way in
which our team has risen to the challenges we have faced, whilst
looking after the interests of all stakeholders and providing
support for communities.
"Whilst the impact of COVID-19 has been enormous, we have
established working practices that allow us to provide takeaway
food services under the different levels of restrictions we have
experienced. The breadth of Greggs' customer base provides ongoing
demand for our services which, combined with our diverse
geographical spread, has demonstrated the resilience of our
business.
"With customers spending more time at home we have successfully
developed our partnership with Just Eat to offer delivery services
and have also seen strong sales through our longstanding
partnership with Iceland, offering our products for home baking. We
have resumed opening new shops where we see good opportunities,
with those sites accessed by car performing particularly well.
"In light of the recent Government announcements significant
uncertainties remain in the near-term. We have taken action to
position Greggs to withstand further short-term shocks and are
optimistic about our prospects for growth once social restrictions
are lifted. I want to thank everyone who has supported Greggs
through 2020. "
Trading update
In the fourth quarter of 2020 we saw variable trading conditions
across the UK as restrictions were enacted to manage the incidence
of COVID-19. Over the quarter as a whole, total sales were GBP293
million (2019: GBP344 million) and company-managed shop
like-for-like sales averaged 81.1% of the 2019 level .
In the five weeks to 31 October, we saw a further improvement in
the level of like-for-like sales in company-managed shops,
averaging 80.1% of that seen in 2019. In the four weeks to 28
November, with more restricted trading conditions, the level of
like-for-like sales in company-managed shops averaged 76.7% of that
seen in 2019. Trading in December was initially more robust,
supported by the reopening of non-essential retail shops, although
this fell back with the introduction of tighter restrictions later
in the month. In the five weeks to 2 January like-for-like sales in
company-managed shops averaged 85.7% of the 2019 level.
As previously communicated, in order to reflect below-normal
activity levels we completed an employee consultation programme in
the quarter. The consultation process minimised the number of job
losses but, unfortunately, still resulted in 820 redundancies.
Our digital offer continues to develop and the rollout of our
national delivery offer, in partnership with Just Eat, is
supporting the recovery in sales levels. In the fourth quarter of
the year delivery represented 5.5% of company-managed shop sales.
600 of our shops now provide delivery services to catchments served
by Just Eat and we expect this to increase to around 800 shops in
2021.
During the year we opened 84 new shops (including 35 franchised
units) and closed 56, growing the estate to 2,078 shops as at 2
January 2021, 328 of which are franchised shops operated by our
partners.
Financial outturn
We ended the 2020 financial year with a net cash position of
GBP37m, having repaid monies due to the Bank of England under our
CCFF facility. In place of this funding we have now put in place a
three-year, GBP100m Revolving Credit Facility with a syndicate of
lending banks.
Throughout this crisis Government support has been essential in
order to minimise the number of job losses caused by lower levels
of demand and to contain losses in the business, which we now
believe are likely to be up to GBP15m before taxation for the year
as a whole.
Outlook
Looking ahead, the significant uncertainty over the duration of
social restrictions, along with the impact of higher unemployment
levels, makes it difficult to predict performance. However, we do
not expect that profits will return to pre-COVID levels until 2022
at the earliest.
As we enter 2021 Greggs is maintaining a strong financial
position for the benefit of all its stakeholders, whilst developing
new ways for customers to shop with us through digital channels and
estate growth. We have a strong pipeline of new shop opportunities
and expect to open around 100 net new stores in the year ahead,
subject to prevailing market conditions.
We expect to report our preliminary results for 2020 on 16 March
2021.
ENQUIRIES:
Greggs plc Hudson Sandler
Roger Whiteside, Chief Executive Wendy Baker / Nick Moore
Richard Hutton, Finance Director Tel: 020 7796 4133
Tel: 0191 281 7721
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