Greggs

Greggs Dividend Analysis and Summary

• Final dividend (FY2025): 50.0p per share (subject to AGM approval).
• Total ordinary dividend (FY2025): 69.0p per share (maintained vs FY2024).
• Ex-dividend date: 30/04/2026 (derived from record date).
• Record date: 01/05/2026.
• Payment date: 29/05/2026.
• Dividend cover (underlying): ~1.8x (Underlying diluted EPS 122.8p vs DPS 69.0p).
• Policy: Maintain ordinary dividend through the current investment phase; target an ordinary dividend covered ~2x by underlying EPS over time; progressive policy aligned to EPS growth.

• Sustainability: Coverage of ~1.8x on underlying EPS and strong cash generation (diluted operating cash inflow per share 267.1p; net cash from ops after leases £273.7m) support the dividend despite FY2025 profit softness.
• Cash and balance sheet: Year-end net cash £45.8m and £75m undrawn RCF provide liquidity. Capex peaked in 2025 (£287.5m), falls to ~£200m in 2026 and £150–170m from 2027, which should lift free cash flow.
• Growth trajectory: DPS held flat at 69.0p, consistent with guidance to maintain the ordinary dividend during the supply-chain investment peak. With profits guided to be “similar” to 2025 in 2026 and fixed-cost drag from Derby commissioning in H2, near-term DPS growth looks limited. Medium term, lower capex and ROCE recovery (target ~20% from 2028) could enable resumed dividend growth and/or additional cash returns.
• Alignment with capital allocation: Management reiterates willingness to return surplus cash via special dividends or buybacks once cash exceeds needs—credible given the capex step-down and robust operating cash generation.