5th Mar 2024 11:00
(Alliance News) - Analysts were quick to praise Greggs PLC after it delivered a special dividend alongside a year of financial growth.
Shares in Greggs rose 4.3% to 2,834.00 pence each on Tuesday morning in London.
The Newcastle, England-based bakery chain said pretax profit climbed 27% to GBP188.3 million in 2023 from GBP148.3 million in 2022. Diluted earnings per share increased 18% to 139.2p from 117.5p.
Sales advanced 20% to GBP1.81 billion from GBP1.51 billion, with like-for-like sales in company-managed shops up around 14% year-on-year.
John Moore, senior investment manager at wealth manager RBC Brewin Dolphin, said the results "once again paint a picture of reliability".
"The company has seen good growth with an uptick in sales and profit, thanks to store management and innovation in terms of its opening hours, expanding product ranges, and delivery partnerships."
Greggs said its robust cash position of GBP195.3 million supported both investment in growth and additional shareholder returns by way of a special dividend of 40.0p per share.
The special dividend came on top of an increased ordinary dividend of 62.0p per share for 2023, up from 59.0p in 2022.
Greggs said its market share was at an all-time high with its total share of food-to-go visits at 8.2%, rising from 7.7% in 2022.
Chief Executive Roisin Currie said: "We are very much on track to deliver our bold five-year growth plan to double sales by 2026 and to have significantly more than 3,000 shops in the UK over the longer term."
Russ Mould at AJ Bell described Greggs as "a well-oiled machine that’s created a recipe for success".
Matt Britzman, equity analyst, Hargreaves Lansdown was also impressed.
This is a business "intent on growing", aiming to surpass 3,000 UK shops while enhancing its multi-channel approach for better service, he noted.
Digital channels are booming, with delivery sales up around 24% last year following partnerships with Just Eat and Uber Eats, he stated.
"Greggs is far more than just a treat, and its value offering puts it in a sweet spot with consumers still battling higher living costs. Maintaining that price point is key, and with cost inflation easing Greggs is making sure customers feel the benefit too. That's likely to be a small drag on sales growth this year compared to last, but there are plenty of other growth avenues to target," Britzman added.
"Today's special dividend is further evidence that the board’s keen to pay investors while it expands", he commented.
By Jeremy Cutler, Alliance News reporter
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