Lauro Asset Management’s David Mercurio has criticised what he called “timid” leadership after Greggs’s shares fell 44% this year, valuing the company at £1.6bn, with almost 10% of the stock now on loan to short sellers, according to a report by The Sunday Times. Lauro, previously backed by GIC, is one of Greggs’s largest shareholders, and City sources say its concerns mirror those of other long-term investors.
Mercurio argued that Greggs’s expected 8.4% cost rise next year is too high, calling for at least £20m in efficiency cuts. He also challenged CEO Roisin Currie’s view that the UK has not reached “peak Greggs”, saying the company should introduce a buyback given its low leverage, strong cash generation and multi-decade low valuation.
Without action, he warned, Greggs risks losing its independence, adding that private equity could “look through the current malaise”.
Greggs, which employs more than 33,000 people, has grown its estate to almost 2,700 stores and surpassed £2bn in sales this year, doubling turnover since 2019. But slowing like-for-like growth and inflation in raw materials and wages have weighed on performance.
