Greggs first-half sales fall 45% to £300m

Shares of Greggs, the Newcastle-based bakery and “food-on-the-go” retail giant, fell about 6% on Tuesday after the firm announced results for the 26 weeks to June 27 badly affected by the coronavirus lockdown.

Greggs said its first-half sales fell 45% to £300.6 million from £546.3 million in the first half of the previous year and it made a pre-tax loss of £65.2 million compared to a £36.7 million profit.

However, Greggs added that sales bounced back to 72% of 2019 levels in the most recent week and that it could break even when sales reach about 80% of last year’s level.

Greggs shares fell 6% to around £13.84. In February, before the coronavirus crisis, Greggs shares were trading around £24.40.

Greggs said it is working to establish bank financing facilities in the second half of the year. No interim dividend was declared.

On its current trading and outlook Greggs said: “We have been encouraged by our ability to operate successfully under social distancing guidelines. 

“In the most recent week, we have seen average sales across the estate of around 72 per cent of the comparator period, with some variation by location type, as expected. 

“The relative resilience we have demonstrated reflects both our broad appeal and our widely-distributed shop estate. 

“Recent sales levels have allowed us to bring approximately 75 per cent of our colleagues out of furlough and we are trading broadly at operating cash breakeven. 

“As sales levels pick up, we will be able to bring more of our colleagues back from furlough; in the interim, we continue to be reliant on the CJRS to protect those roles.  

“Looking forward we expect that the business should break even in profit terms when it achieves sales around 80 per cent of the 2019 level.

“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. 

“Greggs remains a much-loved brand with long-term growth opportunities and the business is better placed to adapt to new conditions than ever before.”

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