Greggs (GRG.L) retail director Roisin Currie will take over as chief executive in May, the British food-to-go retailer said on Thursday as it reported a rise in fourth-quarter sales despite the spread of Omicron in the run-up to Christmas.
The company, known for its sausage rolls, savoury bakes and sandwiches, said it expected its 2021 profit to be slightly ahead of its previous expectations and that it would be able to pay a special dividend of 30 to 40 million pounds ($54 million).
Greggs said a strong October performance was followed by more challenging conditions as the Omicron coronavirus variant surged in December but like-for-like sales in the fourth quarter as a whole were still up 0.8% from 2019.
Chief Executive Roger Whiteside, who is retiring this year after nine years at the helm, said Greggs now had the playbook for COVID after dealing with the pandemic for two years.
“Our suburban stores started to do better again as people stayed at home, our city centre, office based and mass transport hub areas fell back,” he said. “But we still managed to stay positive.”
Greggs said conditions at the start of 2022 were likely to remain challenging with increased costs also in the mix.
“We’ve got reasonable visibility of what we’re looking at from four to six months forward because we typically buy on a contract,” Whiteside said, adding that the inflationary outlook for the full year would be clearer by March.
Shares in Greggs, which were about 480 pence when Whiteside started as CEO, were trading 1.6% lower at 3,316 in early deals, which was still an increase of 44% over the past 12 months.
Some analysts welcomed the decision to appoint Currie as Whiteside’s replacement.
“This looks a solid internal appointment, particularly given her key role in developing the delivery business,” analysts at Jefferies wrote in a note.
Greggs said total sales in 2021 were 1.23 billion pounds, up from 811 million pounds in 2020 and 1.17 billion pounds in 2019.
The company has cash of 198 million pounds, which it said would allow it to open about 150 new stores this year, develop digital channels and extend its trading day.
Whiteside said Omicron was putting pressure on workers at its 2,181 stores but was manageable from a financial perspective and Greggs had brought forward a pay rise for them.
“It is the impact on the people I’m mostly concerned with, rather than the impact on the business per se,” he said.
($1 = 0.7400 pounds)