Greggs PLC (LSE:GRG) shares may have only lifted 2% following the group’s full-year results, but areas of the update have left analysts, employees and sausage roll lovers with something to cheer.
For thousands of Greggs workers, they will share a bonus of £17.6 million after the bakery chain brought in record profits of £188 million in 2023.
Some 25,000 employees, out of the total 32,000-strong workforce, will receive the bonuses as part of their payslips for March.
It’s part of a company scheme in which 10% of profits are shared with workers who have been at the company for longer than half a year, with the amount paid varying depending on the length of employment and how many hours they work.
Additionally, lovers of the group’s baked goods can rest easy after it was revealed there won’t be any price hikes this year.
Up to 160 new Greggs sites could also open in 2024, building on the group’s goal of having more than 3,000 UK stores by 2026.
Greggs has also made sure that at least half of its stores will be open late, building on the success of its Leicester Square shop, which last year was given the green light by the council to open until 2am.
Takeaways will also be an option for customers, with partnerships with Just Eat and Uber Eats having been formed late last year.
What the brokers think
Analysts at Jefferies have also been left satisfied after the update highlighted a “slight beat” on 2023 guidance, while 2024 forecasts met market expectations.
The US bank said the group’s profits were “a touch ahead” of both consensus and its own estimates.
Meanwhile, in the 2024 financial year, current trading has started with like-for-like volumes slipping from 9.4% to 8.2% quarter-on-quarter.
Jefferies isn’t concerned nevertheless, pointing out how the dip came after price increases in December and wasn’t helped by a “slower, rain-affected February”.
“As a result, we expect limited change to FY24 consensus, although there is scope for some of the higher outliers to nudge lower,” the broker said.
Jefferies rates Greggs a ‘buy’ and targets a 3,450p share price, representing around a 25% premium to its current market value.