Food-on-the-go chain Greggs (GRG) fell 1.3% to £33.27 despite upgrading its outlook on full-year performance and announcing plans to pay a special dividend to shareholders following stronger sales.
The company’s shares are still trading near record highs after an exceptionally strong recovery from their pandemic lows when they briefly fell below £12, while a change at the top and a warning on the impact of Omicron may also have tempered investor enthusiasm for the stock.
Today the company announced the appointment of Roisin Currie, currently Greggs retail and property director, as chief executive starting in May 2022.
Current CEO Roger Whiteside had given notice of his intention to retire from the company, but will remain available to support the transition process until his notice expires on 5 January 2023.
In the interim period, pending her appointment as chief executive, Currie will be appointed as CEO designate and as an executive director with effect from 1 February 2022.
AHEAD OF EXPECTATIONS
‘We anticipate reporting a full year outcome slightly ahead of our previous expectations when we report our preliminary results for 2021 on 8 March 2022,’ the company said.
Sales for the financial year to 1 January 2022 were £1.23 billion, a two-year increase of 5.3% compared with the equivalent period in 2019.
Across 2021 two-year like-for-like sales in company-managed shops were 3.3% lower than seen in 2019.
In the fourth quarter of 2021 two-year like-for-like sales in company-managed shops grew by 0.8% as a 'strong' performance in October was followed by more challenging conditions as consumers responded to precautionary messages relating to the new coronavirus variant, the company said.
Shore Capital analyst Clive Black commented that while Greggs ‘set out demanding and exciting medium-term targets to FY26 (in October 2021), it will not be the incumbent chief executive who has to deliver them, something that we find a bit strange and a particular and slightly unfair hostage to fortune for the new CEO’.
‘Put another way, would Ms Currie or indeed a new outside appointment, have agreed in isolation and want to be held to those strong medium-term targets?
‘Indeed, we ask if the market has factored in any execution risk at all to that demanding plan, noting as we do the need for high single digit compound like-for-like sales growth taking into account currently subdued conditions (it is perhaps ironic that only weeks after announcing the new strategic plan that sales momentum dipped, and so our point about execution risk).’
