28th Jul 2020 08:24
(Alliance News) -Â Baker Greggs PLC on Tuesday said sales slumped in the first half with shops closed for most of the second quarter due to Covid-19.
Total sales in the half were GBP300.6 million, down 45% on GBP546.3 million a year ago. Company-managed shop like-for-like sales slumped 49%.
This saw the sausage roll maker swing to a pretax loss of GBP65.2 million from a GBP36.7 million profit a year prior.
The closure of shops resulted in a number of one-off costs, Greggs said, with the total charge for write-offs and provisions for unusable stock being GBP9.0 million. The weekly cash outflow during the closure period, after support and mitigating actions, was GBP4.4 million per week.
The FTSE 250 company did not declare an interim dividend. A year ago, Greggs returned 35.0p per share to shareholders in a special payout, on top of an interim dividend of 11.9p.
Greggs said it is "clear" sales will be constrained while the need for social distancing exists, with an "observed impact" on both its capacity to serve and on customer demand.
"Company-managed shops have seen sales develop since reopening, and reached 72% of 2019 levels in the most recent week to 25 July 2020. Whilst these are early days, Greggs is already showing that the variety and geographical reach of our shop estate, combined with the broad appeal of the brand, which is not materially dependent on office-based workers, means we are less impacted by social distancing than many," said Greggs.
Recent sales levels have allowed the company to bring around 75% of employees out of furlough, and it is trading broadly at operating cash breakeven.
"It remains very difficult to predict the outlook and likely performance of our business, and we recognise the possibility of further lockdowns either nationally or regionally. However, Greggs is now well prepared to deal with the challenges of social distancing and operate through the conditions we are faced with," said Greggs.
Shares in Greggs were up 2.1% at 1,489.53 pence in early trade in London on Tuesday.
By Lucy Heming;Â [email protected]
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