Greggs plc (LON: GRG) said on Tuesday that it swung to an annual loss in 2020 due to the COVID-19 restrictions. The company, however, expressed confidence that its year-to-date performance in the current fiscal year has been better than expected.
Greggs shares were reported about 2% up in premarket trading on Tuesday and gained another 3.5% on market open. The stock now has a per-share price of £23.16 versus a much lower £17.71 per share at the start of 2021. The price action should come in handy if you are interested in investing in the stock market.
Greggs forecasts £70 million of capital expenditures
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Greggs plans on opening 100 new stores in 2021 (company-managed), compared to 82 that it opened last year. As of 2nd January, it had 2,078 shops in total in the United Kingdom. In separate news from the United Kingdom, John Wood Group also reported having concluded 2020 with a pre-tax loss on Tuesday.
The bakery chain expects £70 million of capital expenditures this year. According to Greggs, it slashed its workforce by 820 jobs – a move that will result in £10 million of non-recurring cost but will reduce its full-year employment costs by £14 million.
In the ten weeks that ended on 13th March, Greggs’ company-managed shops saw a 29% year over year decline in comparable sales. Excluding Scotland, this decline stood at a narrower 22%. In the 53 weeks that concluded on 2nd January, on the other hand, total sales printed at £811 million or 31% lower than the previous year.
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Greggs refrains from recommending a final dividend
Greggs swung to a pre-tax loss of £13.7 million last year versus £108.3 million of profit in 2019. The Newcastle upon Tyne-headquartered company attributed the loss to £9 million of write-offs and stock provisions, £5 million of impairment charges related to store closures, and another £9 million of additional costs associated with the COVID-19 safety requirements.
Greggs, however, has benefitted from £19 million in business rates relief. The British firm’s board refrained from recommending a final dividend on Tuesday. The bakery chain had reported £65.2 million of pre-tax loss in H1.
Greggs performed fairly downbeat in the stock market last year with an annual decline of a little under 25%. At the time of writing, it is valued at £2.36 billion and has a price to earnings ratio of 742.37.