Greggs isn't flavour of the month

Greggs shares were hit today following a poor interim management statement. They have stated that the like for like sales in the first 17 weeks was down 4.4%. They have put this down to the adverse weather conditions on the high street, which most of the retail industry are blaming their fall in sales on. What is interesting however is that they have stated they expect no improvement in the difficult trading conditions, which is odd as I thought we could expect better weather now heading into summer.

They issued their preliminary results on the 20th March and announced a final dividend of 13.5p per share (to go ex dividend on 26th April and paid on the 24th May). This will give a total dividend of 19.5p per share, a measly annual dividend increase of 1%. The dividend cover therefore sits at 2 currently based on these figures, so it does remain well covered.

The Chairman advised in his statement that the board remains committed to pursuing a progressive dividend policy. This will naturally hinge on profitability. I will calculate the average dividend growth over recent years shortly. I have been watching these for some time, now relieved I didn't commit.