Greggs has reported a £13.7m loss for 2020 after sales slumped due the pandemic – but said trading so far this year was better than expected.
The bakery chain said it was its first annual loss since it listed on the stock market in 1984 – confirming an outcome it had flagged earlier this year.
Sales fell by 31% to £811.3m as Greggs swung into the red compared to a pre-tax profit of £108.3m a year earlier.
But the company, well known for its pasties and vegan bakes, said there had been a progressive recovery in sales throughout the second half of the year.
In fact, it made a £51.5m profit in the latter six months of 2020, following a £65.2m loss in the first half.
Greggs said that trading so far in 2021, while still sharply lower than a year ago, was better than expected given the extent of lockdowns.
Chief executive Roger Whiteside said: “Greggs is well placed to participate in the recovery from the pandemic and has demonstrated its resilience and capability to operate under such challenging conditions.”
Shares were up 5% in morning trading.
Greggs, which operates from more than 2,000 outlets, said deliveries – now available from more than 600 shops – were contributing an increasing proportion of sales.
Customers can also make click-and-collect orders at all of the stores.
The company added that said sales of its products for home baking, via supermarkets, leapt to record levels.
Greggs said it had taken £87m in government furlough support for temporarily laid-off workers last year and benefitted from business rates relief totalling £18.8m.
In November, the company revealed that it was cutting more than 800 jobs permanently as a result of the pandemic.
Greggs said it closed 56 stores during the year but opened 84 and it plans to add a net 100 sites this year. In the longer term it is targeting an expansion in store numbers to 3,000.
It said the crisis had accelerated trends towards home shopping and online shopping and that in the longer term it expected to see “a further shift away from office-dependent catchments and weaker shopping locations”.
Shops which are accessible by car were the best performers during the crisis and will form most of the new pipeline of stores.
Mr Whiteside said: “In a year like no other I believe that the COVID crisis has in many ways demonstrated the strength of Greggs.
“It has shown the resilience of our business model, but most of all the strength of our people who have worked hard throughout to maintain an essential service providing takeaway food to customers unable to work from home, many of whom were themselves key workers.”
Greggs stores were closed for three months at the start of the pandemic, before reopening in the summer, but it said customer footfall had still been “significantly reduced” due to COVID restrictions.
Like-for-like sales at company-managed stores were down by 36.2% for the year and for the ten weeks to 13 March this year they were still down heavily, but by a narrower 28.8%.
Richard Hunter, head of markets at interactive investor, said: “Current trading remains under pressure, but is also on an improving trajectory.
“With the easing of restrictions in sight, the company may well benefit from the consumer being let off the leash in the coming months.”