Equities update: Greggs serve up another strong earnings update

Greggs serve up another strong earnings update

Mark Crouch, analyst at investment platform eToro, says: “Greggs has served up another strong earnings update this morning, the UK’s leading food-to-go retailer continues to see growth in profits, and despite their economic challenges, will treat investors to a special dividend, testament to the strength of the company’s cash position.

“The UK’s favourite baker enjoyed notable success in extending store opening hours and expanding their delivery services with Just Eat and Uber Eats to remain on track to double sales by 2026.

“While food inflation has slowed to its lowest point in almost two years, prices continue to creep higher, eating into consumers’ weekly budgets and forcing them to be even more vigilant in seeking out a good deal. Greggs’ infamous sausage roll, a nationwide bestseller, has seen a price increase of over 20% since 2021, and so Greggs’ pledge to not increase prices across their range in 2024, so far remains intact.

“Fortunately for Greggs’ shareholders and customers, value and quality have long been cornerstones of the company’s menu, and the food-to-go retailer remains firmly on track to exceed 3,000 stores as they strive to cement their place as a permanent fixture on the British high street.”

Reach PLC hopes uncertainty is in the rear-view mirror.

Adam Vettese, analyst at investment platform eToro said: “Seeing as most of us get our news from a screen these days, digital transformation has been the key to publishers managing to evolve and adapt. A decline in this digital revenue has seen the Daily Mirror publisher’s profits drop.

“Whilst this doesn’t read well, resolving well publicised litigation against the firm will allow for more effective planning going forward as uncertainty eases. This seems to be what the market has picked up on this morning with shares up 5%. The firm has also managed to maintain its dividend, but there is still some way to go for shares to be anywhere near what they were at their 2021 peak.”

Nio still on slippery road after underwhelming results

Adam Vettese analyst at investment platform eToro, says: “Chinese-based EV manufacturer Nio reported fourth-quarter and full-year results today that showed deepening losses.

“Although vehicle deliveries for the year were 30.7% higher than 2022, the pace of delivery slowed in the final quarter of 2023, falling almost 10% from the third quarter.

“What investors may find more concerning is that the company is bleeding more money while selling more vehicles. Losses swelled by more than 40% in 2023 to a wider-than-expected 20.7 billion yuan ($2.9 billion). While vehicle margins have increased – climbing to 11.9% in Q4 from 6.8% a year ago – they are still short of estimates. Furthermore, the company’s share price struggles this year seem consistent with these figures.

“A further area of concern is the EU’s ongoing probe – launched last year – into Chinese subsidies for EV makers, which leaves a cloud of potential tariffs hanging over the heads of Chinese EV manufacturers.”