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Greggs says profit is unlikely to return to pre-virus levels before 2022

Image for Greggs job cut

Greggs plc (LON: GRG) said on Wednesday that the decline in its sales attributed to the ongoing Coronavirus pandemic lost pace in recent months. The company, however, warned that its profit was unlikely to return to the pre-COVID-19 levels before 2022.

Greggs was reported more than 1% up in premarket trading on Wednesday and jumped another 5% on market open. Including the price action, the stock is now exchanging hands at £19.22 per share. In comparison, it had tumbled to as low as £11.20 per share in the last week of September. Learn more about how do people make money on the stock market.

CEO Roger Whiteside’s comments on Wednesday

Chief Executive Roger Whiteside said on Wednesday:

“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 experienced.”

The British baker said that its comparable-sales from company-managed shops in Q4 that concluded on 2nd January printed at 81.1% of the sales in the same quarter last year. In the prior quarter, its like-for-like sales stood at 71.2% of the year-ago levels.

The fast-food retailer resorted to cutting 820 jobs in the last few months of 2020 to cushion the economic blow from the COVID-19 crisis. It now forecasts an up to £15 million of annual pre-tax loss versus £114.2 million of profit last year. Greggs expects £811 million of full-year sales as compared to a significantly higher £1.17 billion of sales in the previous year.

In separate news from the United Kingdom, stationery chain Paperchase filed to appoint administrators on Wednesday, putting 1,500 jobs at risk.

Greggs to open 100 net new shops in 2021

Greggs also said on Wednesday that its partnership with Just Eat for home delivery accounted for 5.5% of the total sales from company-managed shops in the fourth quarter. 600 of its shops, as per the British baker, now support delivery services. In 2021, Greggs expressed confidence, this number will jump to 800.

The bakery chain plans on opening 100 net new shops this year after opening 28 in 2020. Greggs performed fairly downbeat in the stock market last year with an annual decline of roughly 25%. At the time of writing, it is valued at £1.95 billion and has a price to earnings ratio of 612.02.

The post Greggs says profit is unlikely to return to pre-virus levels before 2022 appeared first on Invezz.

Source: INVEZZ

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