Greggs forecasts first annual loss since 1984 after sales slump
January 6, 2021, 12:05 pm

Greggs forecasts first annual loss since 1984 after sales slump

Greggs’ annual sales slumped by more than £300m year on year in 2020 on the back of Covid-19 restrictions, pushing it to predict a £15m full-year loss.

Joanna PartridgeProfits not expected to return to pre-Covid levels until 2022 at the earliest

The bakery chain Greggs is forecasting that the coronavirus pandemic will result in the company posting its first annual loss since the mid-1980s, while it does not expect pre-Covid profit levels to return until 2022 at the earliest.

Greggs’ annual sales slumped by more than £300m year on year in 2020, pushing it to forecast a £15m full-year loss, as coronavirus restrictions closed its shops and hit revenues.

This would be the first annual loss for the retailer since it listed on the London Stock Exchange in 1984.

The company, which has more than 2,000 outlets in the UK, reported sales of £811m for the 53 weeks to 2 January, a 30% decline on the £1.16bn figure for 2019.

The firm said in a trading update: “We do not expect that profits will return to pre-Covid levels until 2022 at the earliest.”

Greggs said its fourth-quarter sales averaged 81% of the equivalent 2019 level, an improvement on the 71.2% achieved in the previous quarter, while it had to manage variable trading conditions across the UK.

Its chief executive, Roger Whiteside, said the impact of Covid-19 had been “enormous” but the retailer had changed its working practices to allow it to provide takeaway food under different levels of government coronavirus restrictions.

“The breadth of Greggs’ customer base provides ongoing demand for our services which, combined with our diverse geographical spread, has demonstrated the resilience of our business,” Whiteside said.

Despite Greggs’ grim forecast for its full-year results, the firm’s shares jumped almost 9% in early trading on Wednesday, making the retailer the biggest riser on the FTSE 250 index.

Investors were encouraged by the news that Greggs sales recovered faster than expected when its stores were allowed to trade, combined with growing revenues from its home delivery service.

The company’s forecast of a £15m loss for 2020 marks a reversal of fortunes for the bakery chain, with its sales exceeding £1bn in 2018 and 2019.

In recent years, Greggs has been on a roll, thanks to the success of its takeaway food products including the vegan sausage roll.

As coronavirus restrictions have kept consumers at home, Greggs has been working to offer a delivery service through a partnership with the food courier Just Eat. However, delivery sales in the fourth quarter were only equivalent to 5.5% of company-managed shop sales.

Greggs also offers products to bake at home through a partnership with the supermarket chain Iceland.

The company has resumed opening new shops where it sees an opportunity and said stores accessible by car were performing particularly well. During 2020 it opened 84 new shops, including 35 franchised units, and closed 56, bringing the total to 2,078 stores.

The pandemic also resulted in job losses at the bakery chain and Greggs confirmed it had made 820 staff redundant in 2020 as it looked to cut costs.

Greggs warned that continuing Covid restrictions, uncertainty over their duration, as well as the impact of higher unemployment levels made it hard to predict its future performance, although it intends to open 100 new stores during 2021.

Greggs “cooked up a good fourth-quarter trading performance”, said Ross Hindle, an analyst at the research firm Third Bridge, “driven by a local town store footprint, keeping stores open during the second lockdown, drive-through capabilities, plus a big push into delivery and collect”.

source: Joanna Partridge

Levant

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.