Greggs [LSE: GRG]

Bakery chain turned food-on-the-go company Greggs published full year numbers this morning and they make for impressive reading. Sales rose 7.4%, whilst the operating profit ticked higher, too. The company continues to invest heavily in the operation but with 2018 set to be the peak year for investment in the company’s supply chain overhaul, presuming they can maintain these margins in what remains a competitive market then the longer term outlook may well remain positive. Management are at least confident that food price inflation may now start to moderate.

Persimmon [LSE: PSE]

Persimmon is the latest housebuilder to declare its results today and again it shows a stellar performance. Earnings per share came in at the upper end of expectations but we have signs of a populist backlash mounting against the sector. Shareholders and politicians had lambasted management over the amount they were set to receive in long term performance incentives. Given the significant amount of money that has flowed from the government to housebuilders through ongoing support deals this is no surprise, but the 25% increase in profits surely means the sector remains on thin ice.

Direct Line Insurance Group [LSE: DLG]

Insurers Direct Line have issued full year numbers today and a 50% increase in operating profits should be worth applauding. Dividends are up 50% too, thanks to premiums rising in the sector of late, which in turn increases profitability. However, insurers tend to see this as a cyclical event – this is a competitive market and fat margins tend to precipitate a price war.


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Market Analyst, Monk Communications
27th February 2018
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