6th Jan 2021 09:08
(Alliance News) - Greggs PLC on Wednesday announced an expected swing to an annual loss as it felt the "enormous" impact of Covid-19.
Nonetheless, Greggs was the best performer in the FTSE 250 in morning trading on the London Stock Exchange, with shares up 6.9% at 1,902.46 pence and hitting a high of 1,933.00p.
The baker cautioned that profits will not return to pre-health crisis levels until "2022 at the earliest".
Greggs said total sales in the 53 weeks ended January 2 slumped 31% to GBP811 million from GBP1.17 billion the year before. On average, fourth-quarter company-managed shop like-for-like sales were at 81% of the prior year's levels.
Greggs expects a full-year pretax loss of up to GBP15 million, swinging from a GBP108.3 million profit the year before. It expects to post annual total sales of GBP811 million, down from GP1.17 billion, including fourth quarter sales of GP294 million, down year-on-year from GBP344 million.
Its year-end net cash position is expected to be GBP37 million, and it has a GBP100 million three-year revolving credit facility in place.
"Whilst the impact of Covid-19 has been enormous, we have established working practices that allow us to provide takeaway food services under the different levels of restrictions we have experience, said Chief Executive Roger Whiteside.
The baker was hit hard by the virus crisis which has emptied high streets and offices across the UK. The company did, however, note that it has ramped up its home delivery offering.
"With customers spending more time at home we have successfully developed our partnership with Just Eat to offer delivery services and have also seen strong sales through our longstanding partnership with Iceland, offering our products for home baking," Whiteside said.
Greggs said 600 of its shops now provide delivery services, and it expects this to rise to 800 in 2021.
"Looking ahead, the significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance. However, we do not expect that profits will return to pre-Covid levels until 2022 at the earliest," Greggs said.
More positively, Greggs said it opened 28 net new shops during 2020, increasing its estate to 2,078 shops. It plans to open 100 net new stores in 2021, "subject to prevailing market conditions".
Greggs expects to post its annual results on March 16.
By Anna Farley; [email protected]
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