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Food-to-go player Greggs has seen another strong uplift in like-for-like sales in the early weeks of 2024 as it continues to grow its store estate.
In the first 19 weeks of the year, Greggs’ like-for-like sales in company-managed shops grew by 7.4%.
That organic growth was driven by delivery sales, evening trade and increased participation in the Greggs App, which underpinned transaction volume growth.
Greggs said its new over-ice drinks range, including coffee, flavoured lemonades and coolers, currently available in 300 shops, was performing well and would be rolled out to up to 700 shops in the coming months.
Pizza boxes have been in strong growth following a dedicated campaign and hot food continues to perform well. It also continued to extend its range of healthier choices.
Overall sales in the 19 weeks to 11 May 2024 rose to £693m from £609m as it opened a further 64 shops in the period, including 15 with franchise partners.
Recent shop openings have included sites at Embankment Tube station, four shops with Tesco and three with Sainsbury’s, the latter including two petrol filling station locations.
In the year to date it closed 37 shops (including 23 relocations), giving a total of 2,500 shops trading at 12 May (comprising 1,986 company-managed shops and 514 franchised units).
The pipeline for the remainder of the year is strong, including a number of further opportunities with supermarket groups, and it said it remained confident in achieving 140-160 net openings for the full year.
Investment projects at its Birmingham and Amesbury distribution centres were “progressing well” and would deliver additional logistics capacity by the end of 2024. The fourth production line for savoury rolls and bakes at Balliol Park in Newcastle has now been commissioned, as planned, and will increase production capacity at the site by 35% over time.
It is also progressing with the development of two new sites in the Midlands, which are expected to be operational in late 2026/early 2027.
Greggs said its full-year outlook was unchanged after its “good start to the year”.
There has also been no change to the outlook for cost inflation, which it expects to be in the range of 4%-5% on a like-for-like basis.
Greggs shares have dropped 1.1% to 2,788.5p on this morning’s news.
Morning update
Ingredients and flavours supplier Treatt has posted an acceleration in sales in the second quarter.
The group said revenues in the three months to 31 March grew by 5.1% (7.7% in constant currency) with order patterns normalising and new business wins.
That was a contrast to Q1 2024, which is typically the quietest quarter, which was impacted by destocking as expected, meaning overall revenue for the half year was down 5.1% to £72.1m.
The group posted a 120 basis point improvement in operating profit margin despite the sales drop, driven by cost discipline and self-help measures annualising.
Net debt of £10.3m was down 41.6% year on year.
The group said it has “good momentum” to take into the second half of the year with “a solid order book and healthy sales pipeline giving tangible line of sight on H2 2024 delivery”.
It expects to report full year profits in line with its expectations
Interim CEO Ryan Govender said: “These results show a good growth in profit and operating margins. After the expected impact of destocking softened in Q1 2024, momentum in the second quarter was stronger as volumes grew, and we recorded our highest ever monthly revenue in March. We are pleased with our progress in China, with new opportunities being won with large local brands there.
“We also grew our higher margin premium categories, especially in tea. There are plenty of active new business opportunities, providing confidence for H2 2024. Momentum in the order book going into H2 2024 is good with a healthy sales pipeline which we are encouraged by.”
Pub group Marston’s posted a 5.2% to £428.1m for the 26 weeks to 30 March, with good momentum across food and drink sales and like-for-like sales up 7.3%, outperforming the broader pub market.
It also saw a 22% increase in underlying pub operating profit to £52.7m and underlying pub operating margin rise to 12.3% from 10.6%, with good progress on cost efficiency programme, despite inflationary environment.
CEO Justin Platt said: “The outlook for H2 is encouraging. With a number of ‘must not miss’ major sporting events, our massively upgraded pub gardens and much-loved food menus, we expect our pubs to be very popular this summer.
“Reflecting on my first few months with Marston’s, I am very excited by the potential that lies ahead. The UK pub market offers significant value-driving opportunities for those who can engage and deliver for their guests. With our high-quality estate and guest obsessed team we are well placed to capitalise and to deliver consistent, reliable cashflows that will drive value for our shareholders.”
Revolution Bars Group has not received any offers for a wholesale takeover, despite 42 expressions of interest in the group.
It has received a number of proposals in relation to certain of the company’s assets, including the acquisition of certain of its subsidiaries and assets owned or operated by the company.
However, it said that none of the proposals presented would result in a financial return to shareholders.
It continues to explore an alternative fundraising exercise supported by existing and new shareholders, which is conditional on the successful implementation of a restructuring plan approved by shareholders and the courts.
On the markets this morning, the FTSE 100 is up 0.1% to 8,427pts.
Risers so far this morning include Just Eat Takeaway.com, up 2.1% to 1,184p, Fever-Tree, up 2.2% to 1,185.7p and McBride, up 3.2% to 112p.
Fallers include Marston’s, down 3.9% to 32.4p, Science in Sport, down 2.1% to 16.5p and Haleon, down 0.8% to 325.9p.
Yesterday in the City
The FTSE 100 saw its first minor fall after seven days of rises, dropping 0.2% yesterday back to 8,415pts.
Risers included Science in Sport, up 6.7% to 16.8p, Glanbia, up 4.7% to €17.65, Nichols, up 4.5% to 1,055p, Greencore, up 3.6% to 138p, Just Eat Takeaway.com, up 2.5% to 1,160p and Deliveroo, up 1.5% to 133.3p.
The day’s fallers included AG Barr, down 2.4% to 571p, McBride, down 2.3% to 108.5p, Pets at Home, down 1.9% to 296p, Ocado, down 1.8% to 342p and Bakkavor, down 1.6% to 121p.
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