GRG.L – Greggs looks good value

Sticky bun and fat-saturated sausage roll retailer has appeared on my radar this week. Brits almost certainly need no introduction to it, but here’s a description anyway:

Greggs plc is a bakery retailer in the United Kingdom. The Company has over 1,480 shops, supplied by 10 regional bakeries and 90 in-store bakers. It sells a range of fresh bakery goods, sandwiches and drinks in its shops. As of January 2, 2010, Greggs plc had 10 regional bakeries with a fleet of 375 vehicles. It also had 90 instore bakeries. As of January 1, 2011, the Company opened 93 new shops, delivering a net increase of 68 after 25 closures, and giving a total of 1,487 shops. Its subsidiaries include Its subsidiaries include Charles Bragg (Bakers) Limited, Greggs (Leasing) Limited, Thurston Parfitt Limited, Greggs Properties Limited, Olivers (U.K.) Limited, Olivers (U.K.) Development Limited, Birketts Holdings Limited and J.R. Birkett and Sons Limited.

Greggs is a simple enough business, and a solid defensive play. They recently announced sales up 5.8%, 1.4% on a lfl basis. Dividends per share are up 6%, marking the 27th consecutive year of dividend growth. I have written before about how it can achieve economies of scale as it expands, and oust incumbents.

GRG is on a PER of 13.2, a valuation that it only trades on less thatn 20% of the time.

Its long-term earnings growth is about 7%, so it’s a solid, if not spectacular, performer. More stats below.

EPIC      "GRG" "EPIC"
NAME   "GREGGS" "Company name"
S0101      13.2 "Curr PER"
S0102      13.2 "PER10 P20"
S0103     14.45 "PER10 P50"
S0104      16.9 "PER10 P80"
S0105        #t "S0101 .LE. S0102"
S0106        #f "S0101 .GE. S0104"
S0107      1.06 "REL CHANGE IN REVENUE"
YLD        3.79 "Yield (%)"
Z          6.48 "Z Score"
MKT       524.5 "MKT CAP (£m)"
ROE0       19.7 "Current ROE"
SP        518.7 "Share Price (p)"
GRATE      6.86 "Graham EPS growth rate%"
XRATE      6.86 "Exp-fit EPS growth rate%"
UPD   "Last Updated: Fri 23 Mar 2012" "Updated on Sharelock"

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About mcturra2000

Computer programmer living in Scotland.
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