Greggs plc

Greggs reported first-half 2026 total sales growth of 7.2% and company-managed like-for-like growth of 2.1%. Profit before tax was GBP 76 million, up 19.7% versus 2025 and slightly ahead of 2024, while diluted EPS rose to 55p from 45p. Operating cash flow increased 18.3%, cash inflow from operating activities was GBP 111 million versus GBP 94 million last year, and the company ended with GBP 16 million of net cash. The interim dividend was maintained at 19p. Management said the full-year outlook remains unchanged, but H2 profit will reflect about GBP 10 million of Derby operating costs; they therefore expect full-year profit progress to be broadly flat year on year. CapEx guidance was lowered to GBP 180 million from GBP 200 million, and net new shop openings are now expected at 100 to 110 for the year.

Roisin Currie said Greggs is still winning on value, brand strength, and convenience despite a tough consumer backdrop. She emphasized that the company is extending access through grocery, franchise, and new formats while staying disciplined on returns and avoiding cannibalization. Her tone was confident but measured, with repeated references to strong momentum, a robust pipeline, and an unchanged full-year outlook despite second-half cost pressure.

Richard Hutton highlighted that operating profit margin in H1 was back to the level seen two years ago after being about 100 basis points lower last year. He pointed to lower food and packaging inflation, better wage phasing, and a GBP 3.5 million annual benefit from lower business rates, which helped bring expected full-year inflation down to about 2% from 3% at the start of the year. He said H1 structural savings were GBP 7 million against a full-year target of GBP 11 million, CapEx was reduced to GBP 180 million, H1 cash inflow was GBP 111 million, net cash was GBP 16 million, and the RCF was extended to June 2029 with GBP 100 million committed. He also said cash on the balance sheet should be about 3% of turnover, implying roughly GBP 70 million by year-end, with surplus cash likely to be returned via special dividends or potentially buybacks.

Analysts focused on July trading, cash-return capacity, franchise like-for-like softness, inflation into FY27, and the impact of new menu items on CapEx. Management said July trading improved versus H1 and was slightly ahead of forecast, with hotter weather still hurting sales but recovery when temperatures cooled. On capital returns, Richard said the company targets about 3% of turnover in cash and would likely return any excess. On inflation, he said some input costs such as coffee, cocoa, and pork have eased, so no autumn price increase is currently needed, while the bear in FY27 could come from energy-related cost pressure flowing through supply chains. On franchise, Roisin said one partner is undergoing structural change that hurt performance, but excluding that partner franchise like-for-like remains slightly ahead of company-managed.