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Greggs PLC on Tuesday lifted its annual dividend, declared a special payout and posted a marked earnings improvement, though the baker cautioned that tougher times could be looming.
Greggs shares were 8.9% lower at 2,080.00 pence each in London on Tuesday morning.
In the year ended January 1, Greggs swung to a pretax profit of £145.6 million, from a £13.7 million loss seen in 2020.
Revenue surged 52% to £1.23 billion from £811.3 million in 2020 and was up 5.3% from 2019's revenue of £1.17 billion, before the onset of the pandemic.
Like-for-like sales from company-managed stores were 3.3% below pre-virus levels. The measure does not include franchises.
‘Our results and achievements in 2021 show that we have emerged from the pandemic both stronger and better as a business. I would like to thank, once again, all of our teams across the country who rose so well to meet the challenges of the last two years,’ Chief Executive Roger Whiteside commented.
Greggs declared a total dividend of 57.0p, after withholding its shareholder payout in 2020. In addition, it declared a 40.0p special payout, to be released in April.
In the first nine weeks of 2022, like-for-like sales in company-managed shops were up 3.7% compared to the same period in 2020, and up a sharp 44% against the lockdown-affected period in 2021.
Greggs, however, warned cost pressures will be a ‘particular feature’ this year.
‘These pressures are currently more significant than our initial expectations,’ Greggs cautioned.
‘As ever, we will work to mitigate the impact of this on customers, protecting Greggs' reputation for exceptional value in the freshly-prepared food-to-go market. Given this dynamic, we do not currently expect material profit progression in the year ahead.’
CEO Whiteside added: ‘Despite these near-term pressures, we continue to believe that the opportunities for Greggs have never been more exciting. Our investment over recent years has left the business well-placed to move quickly as the economy recovers and we drive our ambitious plans to become a larger, multi-channel business.’
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