Greggs shares hit record high: Britains’s biggest high street purveyor of sausage rolls and pasties, Greggs has said it expects profits “materially ahead of expectations” after reporting accelerating sales. The update has led to a round of broker upgrades, sending shares more than 12% higher. The bakery chain, with roots in the north of England, said growth was accelerating, with like-for-like sales up by 5.4% in the 11 weeks to September 13, up from the 3.2% like-for-like sales growth during the first half of the year ended June 28. At the same time as sales are accelerating, profitability is improving. Management said the prices for raw ingredients were falling and “excellent” cost control was taking effect. Management expects profit margins to improve in the second half of the year and added that it expects raw material prices to remain lower near term. The improved profitability is a decent management turnaround from the performance last year when Greggs full year pretax profits slumped by 36% to £33.2 million, from £52.4 million the previous year. As part of the turnaround Greggs is sprucing up its stores and said it had completed 153 refits by September 13, with 200 planned by the end of the year. Underperforming stores are also being removed, with 43 closures so far this year against 32 new shops opened. Greggs shares are now trading on 15.3 times earnings and offer a prospective dividend yield of 3.7%. However, they are trading at record highs following the 10-for-one stock split in 2009. Given the fragile nature of the consumer recovery we are seeing in the U.K., Questor is reluctant to buy at these levels. Greggs at 602p+66p Questor Says ‘Hold’.
11 Jul '14
I don't think he is a fan at all...he probably couldn't get enough pies!
9 Jul '14
billston - it aint that bad!
I guess you're not too happy that they dropped right back down again, Billston. Greggs' Facebook page has numerous complaints about quality of goods and service, and we shouldn't be too proud of Greggs exploiting the tax loophole when it clearly is a main complaint amongst the customers. They should have kept the hot counters (not pretend they never had them in the first place, that VAT loophole was exploited as far back as 2007, the difference being they had hot lamps back then and were in fear of being found out by the taxman, and when the pasty tax was proposed, Greggs were worried because it meant they would be under more scrutiny from the taxman)
8 Jul '14
well its not all bad!
"Can i ask what happened to your heaters on your food"...........they don't charge vat its a loophole, they dont keep the food warm so they dont have to charge vat, hence sometimes you get luke warm pasties, but you can always ask them for a hot one, you might have to wait a few minutes though! They have just launched a new sandwich making procedure, much better, filling wise and packaging wise. Aslong as the shares stay above 4.65 im a happy chappy!
3 Jul '14
RE: wilfe Modsa
Plus taking an axe to over 400 jobs must have bumped up profits artificially for a short time. As far as company arrogance goes, I'd say they are in league with Morrisons and Tescos, so I'm still recommending a sell.
3 Jul '14
Agree Greggs have achieved a lot since the profits warning but are now back to where they were when popular. Question is where now? I took a nice profit a few days ago and pulled my hair when they kept going up but have kept some as soft spot for this company and will continue watching, the lattice tastes is alright but you get free coffee and paper at Waitrose next door in Eldon Square so living it up there lately. Morpeth is dead posh Modsa, the ham must have been mistakenly used at a local village fete unless it was liberated by a passing lad from Ashghanistan a few miles down the road.
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