6th Jan 2022 14:14
(Alliance News) - Greggs PLC said annual sales topped pre-virus levels, a decent showing despite reduced footfall as the pandemic rages on, though chief executive succession plans were centre-stage on Thursday.
Roger Whiteside will step down in May, after nine years at the helm of the baker and retail chain. During this period, the stock has risen more than six-fold and the company has enjoyed a "phenomenal journey", Hargreaves Lansdown analyst Sophie Lund-Yates commented.
"The market is disappointed by the departure of Roger Whiteside, who oversaw this remarkable performance. As we bid goodbye to the man that oversaw the triumph of the vegan sausage roll, eyes must look to the new times rolling in," Lund-Yates commented.
Greggs shares were down 5.1% at 3,199.00 pence each in London on Thursday afternoon.
Greggs is promoting from within. Newcastle upon Tyne-based company said Retail & Property Director Roisin Currie will take the reins.
Greggs Chair Ian Durant said: "Roisin has played a central role in the success of Greggs as it has developed as a multi-channel food-on-the-go business, and I am delighted that she will lead the next phase of our growth as chief executive."
Currie's appointment comes as Greggs is looking to boost its digital offering.
Lund-Yates commented: "Successor, Roisin Currie, was instrumental in getting Greggs' delivery service to where it is. Growing this area will be an important pillar going forwards, as will efforts to have later opening hours at some sites, plus a net 150 new shops a year. This will support the group’s punchy target to double revenue in the coming years.
"Currie is being handed a business where sales are up 5.3% compared to pre-pandemic times, despite the reduced commuter footfall on the UK’s high streets. That's not something many businesses can say, but with a great deal of excitement baked into the stock’s valuation, the pressure's on."
Greggs on Thursday forecast its annual outturn to be ahead of previous expectations. Sales in the financial year to January 1 amounted to GBP1.23 billion, up 5.3% from two years earlier.
In addition, Greggs set out plans to pay a special dividend. The baker expects to be in a position to make a distribution of GBP30 million to GBP40 million this calendar year.
All in all, it was a strong year for the company, AJ Bell analyst Russ Mould commented.
"Departing CEO Roger Whiteside is signing off from Greggs in style as the company beats expectations for what seems like the umpteenth time under his tenure," Mould explained.
Incoming Currie has "big shoes to fill", Mould said.
"The task is not made any easier by the ambitious targets already set out for the business through to 2026. Often a new CEO likes to reset expectations – Currie will not have that luxury. She must also contend with supply chain issues in the short term and the potentially permanent shift towards hybrid working, with fewer office workers around to grab a pastry or pasty on the way to or from work or on their lunch break," the analyst added.
"However, Greggs' footprint in more suburban and residential areas, as well as town and city centres, does mean it could capture a decent portion of the so-called 'food to go home' spend."
Greggs will report annual results on March 8.
By Eric Cunha; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Greggs