Final Results
Greggs PLC
11 March 2008
11 March 2008
GREGGS plc
PRELIMINARY RESULTS
FOR THE 52 WEEKS ENDED 29 DECEMBER 2007
KEY FINANCIALS
+---------+----------------------------------+---------------------------------+
| | Before property gains and | After property gains and |
| | restructuring costs | restructuring costs |
+---------+------------+---------------------+------------+--------------------+
| | 2007| Change YOY| 2007| Change YOY|
+---------+------------+---------------------+------------+--------------------+
|Sales | £586m| +6.4%| £586m| +6.4%|
+---------+------------+---------------------+------------+--------------------+
|Operating| £47.7m| +13.0%| £49.9m| +28.8%|
|profit | | | | |
+---------+------------+---------------------+------------+--------------------+
|Pre-tax | £49.0m| +11.9%| £51.1m| +27.1%|
|profit | | | | |
+---------+------------+---------------------+------------+--------------------+
|Diluted | 319.9p| +22.3%| 340.4p| +41.9%|
|earnings | | | | |
|per share| | | | |
+---------+------------+---------------------+------------+--------------------+
|Dividends| 140.0p| +20.7%| 140.0p| +20.7%|
|per share| | | | |
+---------+------------+---------------------+------------+--------------------+
• Record operating profit and earnings per share
• Twenty-third consecutive year of dividend growth
• Further £25.7m returned to shareholders through ongoing share buyback
programme
• Like-for-like sales up 5.3%, including core volume growth of 0.9%
• Good progress in building new organisational structure for more unified
Greggs brand
• Initial benefits from extended shop trading hours and strategic
marketing programme
• 32 net new shops opened, exceeding initial target
• Like-for-like sales in ten weeks to 8 March 2008 up 6.2%
"Like every other business in our sector, we are continuing to face substantial
pressure from rises in the cost of energy and in our key ingredients, including
flour, vegetable oils, and protein. We will work hard to mitigate the impact of
cost increases through greater efficiency and, in recovering higher costs in the
market place, shall take account of consumer confidence and the competitive
environment. We remain determined to continue offering outstanding value to our
customers.
"Having laid firm foundations in 2007 for the growth of Greggs as a national
brand, we will implement our plans to improve our products, shops and service
during the current year. Progressive harmonisation of our offer, and the
roll-out of best practice across the business, will help us both to drive sales
growth and reduce costs in the medium and longer term.
"Overall, I expect that 2008 will be another year of steady progress for the
Group, and will confirm that we have established a strong platform for future
growth."
- Derek Netherton, Chairman
ENQUIRIES:
Greggs plc Hudson Sandler
Sir Michael Darrington, Managing Director Wendy Baker / Jessica Rouleau
Richard Hutton, Financial Director Tel: 020 7796 4133
Raymond Reynolds, Retail Director
Tel: 020 7796 4133 on Tuesday, 11 March only
0191 281 7721 thereafter
High resolution images are available for the media to view and download from
www.vismedia.co.uk
CHAIRMAN'S STATEMENT
This was a year of significant change for Greggs, as we re-shaped our way of
working in line with the conclusions of the strategic review we completed in
late 2006. Encouragingly, we have already achieved a much improved performance,
setting new records for both operating profit and earnings per share. Even more
importantly, we have made good progress in building the organisational structure
we require to drive the future growth of the Greggs business as a more
customer-focused operation with a unified national brand.
Results
Total Group sales for the 52 weeks ended 29 December 2007 increased by 6.4 per
cent to £586 million (2006: £551 million). Like-for-like sales rose by 5.3 per
cent, including core volume growth of 0.9 per cent.
Operating profit, excluding property gains in 2007 and the costs of
restructuring the Bakers Oven business in the North and Scotland in 2006,
increased by 13.0 per cent to £47.7 million (2006: £42.2 million), a new record
for the Group. Excluding these items the operating margin improved to 8.1 per
cent (2006: 7.7 per cent).
Net finance income was reduced by 17 per cent to £1.2 million (2006: £1.5
million) as we reduced our average cash balances through our continuing
programme to return surplus cash to our shareholders through increased dividends
and ongoing share buybacks.
Pre-tax profit, excluding property gains in 2007 and the costs of restructuring
the Bakers Oven business in the North and Scotland in 2006, increased by 11.9
per cent to £49.0 million (2006: £43.7 million). There was a one-off property
profit in 2007 of £2.2 million, arising from the disposal of bakery sites in
Newcastle upon Tyne, Glasgow and Manchester; while in 2006 we bore non-recurring
restructuring costs, related to the closure of Bakers Oven in the North and
Scotland, of £3.5 million. Including these items, pre-tax profit was £51.1
million (2006: £40.2 million), an increase of 27.1 per cent.
The Group tax charge for the year benefited from one-off credits relating to the
revaluation of deferred taxation at the new Corporation Tax rate of 28 per cent
and the abolition of balancing charges in respect of previously recognised
Industrial Buildings Allowances on the property disposals in the year. We
anticipate that next year will see a further tax credit which is likely to
result in a below-average rate of taxation. Beyond this we expect the Group's
average rate of taxation to steadily rise over the following 3 years as
Industrial Building Allowances are phased out and settle in the region of 31 per
cent.
Before the property gains and restructuring costs, diluted earnings per share
grew by 22.3 per cent to 319.9 pence (2006: 261.6 pence). This represents a new
record for the Group, the previous best being a figure of 278.9 pence in 2005.
This reflects improved profitability, the benefits of our share buyback
programme and the impact of changes to corporate taxation. Including the
non-recurring items in each year, there was a 41.9 per cent increase in diluted
earnings per share to 340.4 pence (2006: 239.9 pence).
Dividend and share buyback programme
In line with our previously stated intention to strengthen cash returns to
shareholders the Board recommends a final dividend of 94 pence per share (2006:
78 pence), an increase of 20.5 per cent. Together with the interim dividend of
46 pence (2006: 38 pence), paid in October 2007, this makes a total for the year
of 140 pence (2006: 116 pence), an increase of 20.7 per cent. This new record
dividend for the Group makes 2007 our twenty-third consecutive year of dividend
growth since Greggs came to the stock market in 1984.
Subject to the approval of the Annual General Meeting, the final dividend will
be paid on 23 May 2008 to shareholders on the register at 25 April 2008.
In addition to delivering value to shareholders through increased dividends, the
Company has continued to return surplus cash by making market purchases of its
own shares for cancellation. During the year we spent a total of £25.7 million
on the purchase of 526,472 shares at an average price of £48.41 per share. Since
the beginning of the current financial year, we have purchased for cancellation
a further 118,500 shares at an average price of £43.77 and an aggregate cost of
£5.2 million. It is the Board's intention to renew its authority to buy back
shares at the Annual General Meeting, and to continue to buy back shares when it
considers it to be in the interests of shareholders to do so.
Business highlights
We made good sales progress throughout the year, with like-for-like sales growth
of 4.6 per cent during the first half (24 weeks) improving to 5.8 per cent in
the second half. We have already seen some initial benefits from our longer term
drive to make the business more responsive to the needs of our customers,
including an increase in the number of our shops trading on Sundays and the
extension of our weekday opening hours in appropriate locations. We were also
pleased with the initial results of our three-year, strategic, integrated
marketing campaign, designed to build awareness of the Greggs brand.
The shop opening programme accelerated during the second half, enabling us to
exceed our initial target by adding a net 32 new shops during the year. At the
centre, we have now put in place the Retail, Marketing and Supply Chain teams we
need to drive Greggs forward as a unified, national brand, in line with the
conclusions of our strategic business review. This change programme is intended
to deliver a progressive acceleration of both top and bottom line growth, with
profitability also expected to benefit from the implementation of best practice
across the business. Mike Darrington discusses these developments in more detail
in his report.
The Board
Mike Darrington is now 66 and has been managing director of Greggs for 24 very
successful years. We have in place a process to determine his successor and we
will make a further announcement in due course.
Stephen Curran, our Senior Independent Director, will retire at the AGM in May.
He joined the Board of Greggs in 1981 when it was still a private company with a
turnover of £29 million and 236 shops. Throughout this period of major changes
and considerable growth Stephen has been a source of invaluable help and advice,
supportive but challenging, drawing on his experience with a wide range of
businesses. Stephen has shown huge commitment to the Company over 27 years and
I, and Ian Gregg before me, have greatly appreciated all that he has done. Bob
Bennett will take on Stephen's role as Senior Independent Director after the
AGM.
Sir Ian Gibson, a Non-Executive Director since 2006, resigned from the Board
with effect from 29 February 2008 to focus on his increasing commitments at Wm
Morrison Supermarkets PLC. I would like to record our appreciation of his wise
advice and assistance through a period in which we completed a comprehensive
business review and embarked on a process of significant change.
I am pleased to report that Roger Whiteside (49) will join the Board as an
additional Non-Executive Director with effect from 17 March 2008. Roger was
Chief Executive of the Thresher Group off-licence chain from 2004-2007, prior to
which he was a co-founder of Ocado, the innovative online grocer operating in
partnership with Waitrose, and served as its Joint Managing Director from
2000-2004. He began his career at Marks & Spencer, where he spent 20 years,
ultimately becoming head of its Food Business. I am sure that we will derive
significant benefits from his very extensive experience of the food and retail
industries.
People
All our people have continued to work effectively through a period of major
change within the business, and I would like to express the thanks of the Board
to every member of the team for their very positive approach, and for their
individual contributions to our progress during 2007.
Prospects
Like every other business in our sector, we are continuing to face substantial
pressure from rises in the cost of energy and in our key ingredients, including
flour, vegetable oils and protein. We will work hard to mitigate the impact of
cost increases through greater efficiency and, in recovering higher costs in the
market place, shall take account of consumer confidence and the competitive
environment. We remain determined to continue offering outstanding value to our
customers. Against this background I am pleased to report a positive start to
the current year, with like-for-like sales in the ten weeks to 8 March 2008
increasing by 6.2 per cent.
Having laid firm foundations in 2007 for the growth of Greggs as a national
brand, we will implement our plans to improve our products, shops and service
during the current year. Progressive harmonisation of our offer, and the
roll-out of best practice across the business, will help us both to drive sales
growth and reduce costs in the medium and longer term.
Overall, I expect that 2008 will be a year of steady progress for the Group, and
will confirm that we have established a strong platform for future growth.
Derek Netherton
Chairman
11 March 2008
MANAGING DIRECTOR'S REPORT
It is pleasing to report much improved results after the disappointing
performance of 2006. This was not a 'quick fix', but the first phase of our
three year plan designed to transform Greggs from a devolved and divisionalised
business into a much more unified, centrally driven national operation, with a
greatly enhanced capability to understand and meet the needs of its customers.
We are encouraged by our progress to date, but there is much more potential for
the future as we work to enhance our products and shops, spread best practice
through the business and build awareness of our brand and all that it has to
offer.
Trading performance
Although we continue to operate in an extremely competitive market place,
trading conditions during the year proved more benign than in 2006. As a daily
purchase business, we are sensitive to the effects of climatic extremes, and
like-for-like sales growth slowed as a result of the exceptionally wet period in
June, but benefited from very favourable conditions in August and September.
Accordingly, over the year as a whole, we regard the weather impact on our
business as broadly neutral.
Like-for-like sales increased by 4.6 per cent in the first half (24 weeks) and
the rate of growth improved to 5.8 per cent in the second half, despite the
rather more demanding 2006 comparatives encountered in the final weeks of the
year. As the Chairman has noted, this made an increase in Group like-for-like
sales for the year of 5.3 per cent, including core volume growth of 0.9 per
cent. Customer growth, as measured by the number of transactions, was a little
over one per cent.
We benefited from some of our initial actions to make the business more
responsive to customer needs, including the opening of more of our shops on
Sundays, and the extension of weekday opening hours in locations where we
identified sufficient demand.
Wage costs increased as the result of our general pay settlement of just under
four per cent, and the recruitment of additional senior personnel at the centre
to drive the development of the Greggs brand. Energy costs, after a £4.5 million
increase in 2006, rose by a further £0.5 million. We experienced significant
cost pressure on a number of key ingredients, including flour, dairy products
and vegetable oils, particularly in the second half. We continue to enter into
forward contracts for certain key inputs with the aim of achieving
predictability in our cost base in the short term.
Greggs brand UK
Like-for-like sales under the Greggs brand increased by 5.5 per cent, including
core volume growth of 0.9 per cent.
Management. Following the appointment of Raymond Reynolds as Retail Director in
December 2006, we have given priority during the year to building strong central
teams to lead the growth and development of the Greggs brand in the areas of
Retail, Marketing and the Supply Chain. These teams have been assembled both by
external recruitment and the transfer of suitably qualified divisional
management. The appropriate capability is now in place and gaining steadily in
experience. Having created this new structure during 2007, we expect to deliver
progressively increasing benefits from the implementation of a more unified
approach in the current year and beyond.
Customers. We are committed to constant improvement of our understanding of the
million customers who visit Greggs each day, and to providing them with what
they want, when they want it. We also seek to extend our appeal to new groups of
consumers by increasing the variety of locations in which we trade, adapting our
opening hours to meet their lifestyle needs, and developing our product range.
Increased investment in research to aid understanding of our customers and the
fast-moving market place in which we operate is a continuing feature of our new
strategic approach.
Products. We are determined to meet consumer demand for innovative and more
aspirational products, while retaining our traditional strength in iconic bakery
products such as sausage rolls and doughnuts, which deliver great taste and
enjoyment at competitive prices. We have begun the process of harmonising
products and practices across our divisions, aiming to identify the best recipes
and working methods, for example in sandwich production in our shops, and to
ensure that they are adopted nationwide. The implementation of unified training
programmes across the business will bring even more consistency to our product
offer throughout the country.
Shops. We have continued to develop our range of outlets and their opening
times, to ensure that they are appropriately geared to each meal occasion and to
local demand for food on the go. Our new shop openings in 2007 included a number
of units in non-traditional locations away from the high street, such as
industrial estates. Developments of this type will be an increasing feature of
our opening programme in 2008 and beyond. We have increased the number of our
shops trading on Sundays by around 150, and extended weekday opening hours where
local demand exists, for example to meet the early morning needs of office
workers or to cater for customers of retail centres or leisure attractions
seeking early evening food on the go. Early results from our experimental shop
formats have provided us with some valuable learning which is being
progressively applied across the business as a whole. We continue our rolling
programme of capital investment to enhance the appeal of our shops through
refits and refurbishments. During the first half, we also refreshed some 350
shops to soften the somewhat strident colours of our previous
takeaway-orientated design, and to re-emphasise our key point of difference as
bakers. This has helped to create a significantly more attractive shopping
environment at a relatively modest cost per unit.
Marketing. There has been a significant expansion of our central marketing
department during the year, and we are applying greater resources and
professional expertise to this area than ever before. During the year we
undertook a £3 million integrated marketing campaign, which included two major
bursts of national TV and radio advertising as well as the use of posters and
the internet. The advertisements, fronted by TV comedian Paddy McGuinness,
achieved good consumer recognition and we have been pleased by the initial
response, though the real objective is to build awareness of the Greggs brand
nationally over the longer term. We will continue this strategic marketing push
over the next two years, emphasising the freshness, quality and sheer
enjoyability of our products.
Now that we have established the right management infrastructure at the centre,
we are well placed to build up the momentum of our drive to ensure the adoption
of best practice in all areas of the Greggs business. This will help us to
improve efficiency by driving down costs, at the same time as facilitating
development of our reputation as a consistent, high quality, national brand.
Bakers Oven brand
Our Baker's Oven business now operates from 164 shops in the Midlands and the
South following the restructuring changes made in 2006. Like-for-like sales
under the Bakers Oven brand grew by 4.3 per cent, including core volume growth
of 1.2 per cent. Bakers Oven Midlands successfully absorbed an additional 15
shops transferred to it following the restructuring of the brand in the North
and Scotland. The projected ongoing cost savings from this restructuring have
been delivered in full, enhancing Group profits by £1.25 million. The Bakers
Oven operations in the Midlands and South now have a stable and profitable
estate, generating good returns on our investment.
Greggs brand Continental Europe
Our Belgian business now trades from a total of 11 shops in Antwerp, Leuven and
Brussels, following the acquisition of a small chain of five shops in the
Belgian capital early in the second half. All of the acquired shops have been
re-branded as Greggs, and a rolling programme of comprehensive refurbishment is
in hand to bring them all up to the standards of the rest of the chain. The
business as a whole continues to make satisfactory progress, achieving good core
sales growth and providing us with valuable learning about the market place.
Retail profile
We opened 56 new shops during the year and closed 24, giving us a net increase
of 32 units and a total of 1,368 at 29 December 2007. The pace of new openings
accelerated in the final months of the year, enabling us to exceed our initial
estimate of a net addition of 20 - 25 units during 2007. The Greggs brand in the
UK continued to account for some 87 per cent of our total retail portfolio, with
1,193 shops trading at the year end (2006: 1,165), an increase of 28. The Bakers
Oven estate was relatively stable at 164 shops (2006: 165), while our small
acquisition in Belgium expanded the Greggs chain there to 11 shops (2006: six),
an addition of five.
We completed 29 comprehensive shop refurbishments and 53 minor refits during the
year.
We expect to achieve a net addition of at least 40 shops to our portfolio during
2008, with significant numbers of new openings planned in both Scotland and the
South West to exploit the new bakery capacity we have recently created in these
regions.
Capital investment
Capital expenditure for the year totalled £42.3 million, exceeding our stated
budget of £39 million, mainly as a result of the increased number of shop
openings compared with our original projections. Our largest single investment
was in our new Glasgow bakery, which was completed on time and to budget, and is
meeting all our expectations; we also completed a smaller scale expansion of our
production facility in South Wales. During 2008 we plan to invest a total of £44
million; this will include the development of a new bakery in Manchester, an
increased number of new shop openings and the continuation of our drive to raise
standards in our existing shops through refits and refurbishments.
Cash flow and balance sheet
The Group is consistently and strongly cash generative, providing the basis for
our progressive dividend policy over the last 23 years and underpinning the
Board's more recent strategic decision to reduce dividend cover and conduct a
continuing share buyback programme. During the year we returned a total of £38.9
million to shareholders, comprising £13.2 million in dividend payments and a
further £25.7 million through share buybacks. Despite these substantial
outflows, we ended the year with net cash on the balance sheet of £11.6 million
(2006: £19.6 million).
Community and the environment
Greggs continues to pride itself on being a socially responsible business, and I
am pleased to be able to announce that we have now underlined that commitment by
the appointment of a new Social Responsibility Director: Graham Randell,
formerly managing director of Greggs North East. Reporting directly to me,
Graham brings to his new role seniority and experience which will ensure that he
can exercise real authority, and I look forward to working with him to ensure
that our social and environmental strategies are better co-ordinated and driven
forward, with the backing of the Board and all our colleagues.
We have continued to support the communities in which we operate through both
corporate donations to charity and the voluntary fund-raising efforts of our
employees. In total the Company gave £730,000 to charities during the year
(2006: £540,000), amounting to 1.4 per cent of our pre-tax profit. This was
directed principally through the Greggs Trust and our Greggs Breakfast Clubs,
which operate in 124 primary schools in disadvantaged areas across the country.
In addition to this our staff raised an impressive £175,000 for the BBC Children
in Need Appeal and a further £310,000 for children's cancer charities through
our long-established programme of regional fun runs.
We have continued our business-wide drive to improve energy efficiency and
reduce carbon emissions. This is an area where the financial interests of the
business are perfectly aligned with the protection of the environment. We are
also pursuing a wide range of initiatives designed to reduce our environmental
impact by increasing recycling and reducing the amount of food waste going to
landfill.
People
After coping with a difficult year in 2006, our people were faced with extensive
changes in the way we run the business from early 2007. These naturally made a
particularly strong impact in an organisation such as Greggs, which has enjoyed
a high degree of stability over many years. I know how difficult it can be to
maintain operational effectiveness and sustain morale through a period of major
change, which inevitably creates unfamiliarity and uncertainty. It is therefore
a real tribute to the quality and character of our people that the necessary
changes to the way we work have all been made remarkably smoothly, and adopted
in such a positive manner. I am grateful to every member of the team throughout
the business for the exceptional way they have responded to these challenges.
The future
Our year of change in 2007 was merely the start of a longer term strategic
programme designed to increase our responsiveness to our customers, and to build
an even stronger and more unified national Greggs brand. We have now laid firm
foundations which we believe will significantly enhance the longer term growth
prospects of the Group. We continue to see significant potential for further
retail expansion in the UK, and feel confident that we can increase the rate of
shop openings in the coming years. We will make further progress towards our
goals by ensuring that we remain true to our core values and focusing on the
delivery of great products and excellent service. I am confident that we are on
track to realise our vision of sustained, long term growth as Europe's finest
retail baker.
Sir Michael Darrington
Managing Director
11 March 2008
Greggs plc
Consolidated income statement
for the 52 weeks ended 29 December 2007
(2006: 52 weeks ended 30 December 2006)
2007 2007 2007 2006 2006 2006
£'000 £'000 £'000 £'000 £'000 £'000
Excluding Profits on Excluding Bakers Oven
profits on disposal of Bakers Oven restructuring
disposal of properties restructuring costs
properties (Note 4) Total costs (Note 5) Total
Revenue 586,303 - 586,303 550,849 - 550,849
Cost of sales (220,849) 2,193 (218,656) (209,455) (68) (209,523)
________ ________ ________ ________ ________ ________
Gross profit 365,454 2,193 367,647 341,394 (68) 341,326
Distribution and selling costs (278,708) - (278,708) (262,917) (2,947) (265,864)
Administrative expenses (39,030) - (39,030) (36,232) (483) (36,715)
________ ________ ________ ________ ________ ________
Operating profit 47,716 2,193 49,909 42,245 (3,498) 38,747
Finance income 1,234 - 1,234 1,579 - 1,579
Finance expenses - - - (87) - (87)
________ ________ ________ ________ ________ ________
Profit before tax 48,950 2,193 51,143 43,737 (3,498) 40,239
Income tax (14,792) - (14,792) (14,227) 1,049 (13,178)
________ ________ ________ ________ ________ ________
Profit for the financial year
attributable to equity holders
of the parent 34,158 2,193 36,351 29,510 (2,449) 27,061
======== ======== ======== ======== ======== ========
Basic earnings per share 342.8p 241.2p
Diluted earnings per share 340.4p 239.9p
Dividends 2007 2006
Interim dividend paid
(pence per share) 46p 38p
Final dividend proposed
(pence per share) 94p 78p
Greggs plc
Consolidated statement of recognised income and expense
for the 52 weeks ended 29 December 2007
(2006: 52 weeks ended 30 December 2006)
2007 2006
£'000 £'000
Actuarial gains on defined benefit pension plans 1,410 2,741
Tax on items taken directly to equity (456) (822)
________ ________
Net income recognised directly in equity 954 1,919
Profit for the financial year 36,351 27,061
________ ________
Total recognised income and expense for the financial year
attributable to equity holders of the parent 37,305 28,980
======= =======
Greggs plc
Consolidated balance sheet
at 29 December 2007
(2006: 30 December 2006)
2007 2006
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 196,783 184,325
Current assets
Inventories 9,908 8,429
Trade and other receivables 19,934 16,026
Cash and cash equivalents 11,581 19,585
Asset held for sale - 275
________ ________
41,423 44,315
________ ________
Total assets 238,206 228,640
________ ________
LIABILITIES
Current liabilities
Trade and other payables (68,183) (61,295)
Current tax liabilities (9,008) (5,467)
________ ________
(77,191) (66,762)
Non-current liabilities
Defined benefit pension liability (680) (1,883)
Other payables (426) (90)
Deferred tax liability (14,315) (15,014)
________ ________
(15,421) (16,987)
________ ________
Total liabilities (92,612) (83,749)
________ ________
Net assets 145,594 144,891
======= =======
EQUITY
Capital and reserves
Issued capital 2,127 2,232
Share premium account 13,533 13,533
Capital redemption reserve 312 207
Retained earnings 129,622 128,919
________ ________
Total equity attributable to equity holders of the parent 145,594 144,891
======= =======
Greggs plc
Consolidated statement of cashflows
for the 52 weeks ended 29 December 2007
(2006: 52 weeks ended 30 December 2006)
2007 2006
£'000 £'000
Operating activities
Cash generated from operations (see below) 74,685 66,185
Income tax paid (12,585) (13,600)
________ ________
Net cash inflow from operating activities 62,100 52,585
________ ________
Investing activities
Acquisition of property, plant and equipment (42,343) (30,023)
Proceeds from sale of property, plant and equipment 7,625 1,599
Interest received 1,234 1,579
________ ________
Net cash outflow from investing activities (33,484) (26,845)
________ ________
Financing activities
Defined benefit pension scheme special contribution - (5,500)
Interest paid - (74)
Proceeds from issue of share capital - 93
Sale of own shares 1,952 1,809
Purchase of own shares - (16,436)
Shares purchased and cancelled (25,688) (39,544)
Dividends paid (13,242) (12,105)
Government grants received 358 -
________ ________
Net cash outflow from financing activities (36,620) (71,757)
________ ________
Net decrease in cash and cash equivalents (8,004) (46,017)
Cash and cash equivalents at the start of the year 19,585 65,602
________ ________
Cash and cash equivalents at the end of the year 11,581 19,585
======= =======
Cash flow statement - cash generated from operations
2007 2006
£'000 £'000
Profit for the financial year 36,351 27,061
Depreciation 24,548 23,884
(Profit) / loss on sale of property, plant and equipment (1,951) 753
Release of government grants (16) (8)
Share based payment expenses 555 687
Finance income (1,234) (1,579)
Finance expenses - 87
Income tax expense 14,792 13,178
Increase in inventories (1,479) (716)
Increase in debtors (3,908) (165)
Increase in creditors 6,820 2,609
Increase in pension liability 207 394
________ ________
Cash from operating activities 74,685 66,185
======== ========
Greggs plc
NOTES:
1. Status of financial information
The financial information set out above does not constitute the company's
statutory accounts for the years ended 29 December 2007 or 30 December 2006. The
financial information for 2006 is derived from the statutory accounts for 2006
which have been delivered to the registrar of companies. The auditors have
reported on the 2006 accounts; their report was (i) unqualified, (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report and (iii) did not contain a
statement under section 237(2) or (3) of the Companies Act 1985. The statutory
accounts for 2007 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and will be
delivered to the registrar of companies in due course.
2. Dividends
The following tables analyse dividends when paid and the year to which they
relate:
2007 2006
Per share Per share
pence pence
2005 final dividend - 70.0p
2006 interim dividend - 38.0p
2006 final dividend 78.0p -
2007 interim dividend 46.0p -
________ ________
124.0p 108.0p
======== ========
The proposed final dividend in respect of 2007 amounts to 94.0 pence per share
(£9,886,000). This proposed dividend is subject to approval at the Annual
General Meeting and has not been included as a liability in these accounts.
2007 2006
£'000 £'000
2005 final dividend - 8,013
2006 interim dividend - 4,092
2006 final dividend 4,855 -
2007 interim dividend 8,387 -
________ ________
13,242 12,105
======= =======
3. Reconciliation of movement in capital and reserves
Issued Share Capital Retained 2007 2006
capital premium redemption earnings Total Total
reserve
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2006 2,232 13,533 207 128,919 144,891 181,475
Shares issued in the year - - - - - 93
Shares purchased and
cancelled (105) - 105 (25,688) (25,688) (39,544)
Total recognised income
and expense - - - 37,305 37,305 28,980
Purchase of own shares - - - - - (16,436)
Sale of own shares - - - 1,952 1,952 1,809
Share-based payments - - - 555 555 687
Dividends - - - (13,242) (13,242) (12,105)
Tax items taken directly
to reserves - - - (179) (179) (68)
________ ________ ________ ________ ________ ________
Balance at 29 December 2007 2,127 13,533 312 129,622 145,594 144,891
======== ======== ======== ======== ======== ========
4. Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 29 December 2007 was based on
profit attributable to ordinary shareholders of £36,351,000 (2006: £27,061,000)
and a weighted average number of ordinary shares outstanding during the year
ended 29 December 2007 of 10,604,188 (2006: 11,220,493).
Diluted earnings per share
The calculation of diluted earnings per share at 29 December 2007 was based on
profit attributable to ordinary shareholders of £36,351,000 (2006: £27,061,000)
and a weighted average number of ordinary shares outstanding during the year
ended 29 December 2007 of 10,679,147 (2006: 11,280,902).
Adjusted earnings per share
Basic and diluted earnings per share have been calculated for the year ended 29
December 2007 which exclude the profit on disposal of properties. These have
been calculated by dividing profit attributable to ordinary shareholders
excluding the profit on disposal of properties by the relevant weighted average
number of ordinary shares as set out above.
Basic and diluted earnings per share were calculated for the year ended 30
December 2006 which exclude the effect of the Bakers Oven restructuring costs.
These were calculated by dividing profit attributable to ordinary shareholders
excluding Bakers Oven restructuring costs by the relevant weighted average
number of ordinary shares as set out above.
Profit attributable to ordinary shareholders
2007 2007 2007 2006 2006 2006
Total Total
Excluding Profits on Excluding Bakers Oven
profits on disposal of Bakers Oven restructuring
disposal of properties restructuring costs
properties (Note 5) Total costs (Note 6) Total
£'000 £'000 £'000 £'000 £'000 £'000
Profit for the financial year
attributable to equity holders
of the parent 34,158 2,193 36,351 29,510 (2,449) 27,061
======== ======== ======== ======== ======== ========
Basic earnings per share 322.1p 20.7p 342.8p 263.0p (21.8p) 241.2p
Diluted earnings per share 319.9p 20.5p 340.4p 261.6p (21.7p) 239.9p
This information is provided by RNS
The company news service from the London Stock Exchange
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