16th Mar 2021 10:40
(Alliance News) - Greggs PLC on Tuesday reported its first loss as a London-listed company but boasted its new year has started better-than-expected.
Chair Ian Durant also noted he has been asked to remain in his role going forward, despite exceeding the time-limits under the UK corporate governance guidelines.
"I would have been expected to step down in 2020 but the board has asked me to remain in place to provide continuity of leadership during a period when we are likely to address chief executive succession as Roger Whiteside approaches retirement age," Durant explained.
He continued: "We are grateful to Roger for his willingness to be flexible regarding his retirement date to ensure the best possible succession and transition process."
Shares in the mid-cap bakery chain were 4.8% higher in London on Tuesday morning at 2,313.22 pence each.
In the 53 weeks to January 2, Greggs sunk to a pretax loss of GBP13.7 million compared to profit of GBP108.3 million in the 52 weeks to December 28.
The baker said the loss was the first one suffered in its history as a London-listed company - which happened in 1993.
Revenue dropped 30% to GBP811.3 million from GBP1.17 billion. Like-for-like sales in company-managed shops was down 36%.
Greggs noted it cancelled its final dividend for 2019 and has not declared a dividend since.
"In order to recommence a dividend distribution, the company will need to return to a level of profitability and cash generation sufficient to support its investment programme whilst maintaining appropriate liquidity," the baker said.
Greggs said it ended the period with 2,078 shops and is planning to open about 100 net new stores in 2021 - after securing 28 net new opens in 2020.
Chief Executive Roger Whiteside said: "In a year like no other I believe that the Covid crisis has in many ways demonstrated the strength of Greggs. It has shown the resilience of our business model, but most of all the strength of our people who have worked hard throughout to maintain an essential service providing takeaway food to customers unable to work from home, many of whom were themselves key workers. I would like to take this opportunity to thank all of our people, who can be proud of the part we played in our nation's time of need."
Greggs said it has started the new year better-than-expected, but noted its stores in Scotland have been temporarily closed to walk-in customers for the majority of the year to date.
Outside of Scotland, company-managed shop like-for-like sales in the rest of the UK estate were down 22% year-on-year. Greggs pointed to, however, its delivery sales which have been "particularly strong" to start the new year at 9.6% of total company-managed shop sales in the first ten weeks of 2021.
"Greggs has made a better-than-expected start to 2021 given the extent of lockdown conditions and is well placed to participate in the recovery from the pandemic. It has a clear strategy to extend its digital capabilities and to grow further in new locations, channels and dayparts. These opportunities will benefit all of its stakeholders in the years to come," Whiteside added.
By Paul McGowan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Greggs