High street baker Greggs swung to a full-year profit beyond pre-pandemic levels and declared a special dividend as its stores reopened from lockdowns, but warned of significant cost headwinds in 2022 from inflation and higher commodity prices.
The chain, famous for its sausage rolls, reported a pre-tax profit of £145.6m in the 12 months to January 1, compared with a £13.7m loss last year and £108.3m profit in 2019. Revenue rose to £1.22bn from £813m in the previous year and £1.16bn in 2019.
A final dividend of 42p-a-share was declared for a total of 57p, along with a special 40p-a-share dividend. There was no payout in 2020.
In first nine weeks of 2022, like-for-like sales in company-managed shops rose 3.7% compared to 2020 and 44.2% against lockdown-affected period in 2021.
Greggs said the improved performance and trading outlook for its shops resulted in the net reversal of £2.2m of shop asset impairment charges. A further £1.3m set aside for land and bakery plant & machinery was also released.
The impact of inflation in employment and other input costs is expected to result in a cost inflation headwind of around 6-7% in 2022, it added.
“A proportion of this is forward-covered but the outlook for many commodity costs remains uncertain. This has necessitated some price increases, which were made at the start of this year, and further changes are expected to be necessary,” the company said.
