Greggs swung back to a profit last year (Ben Birchall/PA)
(Picture: PA Archive)GREGGS is back in the black, and back paying bonuses to staff but admits it has no idea what will happen to the price of its food in stores.
For 2021 the baker made record profits of £146 million, compared to a £14 million loss when most of the shops were shut.
Sales soared back past the billion mark to £1.23 billion.
That allows to a £16.6 million cash payout to 24,000 staff – worth £800 for someone with six-years service who works a 20-hour week.
The company plans to double sales over time with longer opening times and more stores.
A trial to have stores in Primark is still at the experimental stage.
CEO Roger Whiteside said: “We feel like we come out of Covid better and stronger. We feel like we are in a good place. The cloud hanging over the market is the outlook for inflation. There is a lot of uncertainty in the outlook.”
Because of that profits are unlikely to grow this year. The shares lost 10%, 215p, to 2068p on that guidance.
Greggs doesn’t source goods directly from Russia, but will be impacted by global commodity markets. It is hedged for fuel costs for the next five months, but not after that.
“We put prices up at the beginning of the year. What we do next, I can’t tell you,” said Whiteside.
John Moore at Brewin Dolphin, said: “Greggs has benefitted from the return of increased footfall as the UK returned to a more ‘normal’ way of life. The company’s results are strong at a headline level and the business is highly cash generative with a rock-solid balance sheet, allowing it to pay out a special dividend to shareholders. The question, as alluded to in today’s statement, is how the business reacts to cost inflation being ahead of its expectations.”
