Half Year 2024 Greggs PLC Earnings Call Transcript
Key Points
- Total sales increased by almost 14%, with like-for-like sales up 7.4%.
- Underlying pretax profits rose by over 16% to GBP74.1 million.
- Greggs PLC (GGGSY) opened 99 new shops, resulting in a net increase of 51 shops, bringing the total to 2,524.
- Menu innovation and multichannel strategy are key drivers of growth, with new products like over-ice drinks and pizza boxes.
- Supply chain investments are on track, supporting future growth plans with new distribution centers in Birmingham and Amesbury.
- Income tax charge increased due to the annualization of the tax rate hike from April 2023.
- Wage inflation is high at 9.5%, driven by the increase in the national living wage and enhanced pension benefits.
- An invoicing issue with a supplier has temporarily overstated operating cash inflow and cash balance by GBP30 million.
- Potential inflation in food and packaging costs could return in Q4, despite marginal deflation in the first half.
- Significant capital expenditure is planned, with GBP280 million expected this year, including a GBP30 million land purchase in Kettering.
Okay. So we will make a start. First, just to say good morning. I'd like to think that Richard and I have brought the sunshine to London. So you can tell us if we have or not. And agenda today will be in the usual format. I will outline the results we've announced today and I will then hand over to Richard to take us through the financial performance in more detail. And after that, I will then take you through our strategic progress and finish with the outlook for the year.
So it's great to be able to stand here and report that we continue to make good progress. So as you can see on the slide, total sales are up almost 14% and on a like-for-like basis, that is 7.4%, while underlying pretax profits are increasing by just over 16% to GBP74.1 million. And very pleasingly, we've announced an interim dividend of 19p, which is just shy of 19%.
In terms of our strategic progress, we are continuing to grow and improve our shop estate. And so far this year, we have opened 99 new shops. That includes 30 relocations, and we
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