Greggs Advances as Punch CEO Swaps Pints for Pies: London MoverPeter Woodifield
Greggs Plc, the U.K.’s biggest bakery chain, rose for an eighth straight day after naming Punch Taverns Plc boss Roger Whiteside as chief executive officer, finding a replacement for CEO Ken McMeikan after only six weeks.
Whiteside, who has been a non-executive director of Greggs since March 2008, will quit Punch, which is in talks with investors and bondholders about restructuring 2.4 billion pounds ($3.8 billion) of mortgage-backed bonds, on Feb. 1. He will join Greggs on Feb. 4, the companies said separately today.
Greggs shares gained 1.1 percent to 480 pence, the highest since McMeikan said he was quitting. The eight-day rising streak was the longest since October 2009, while the volume of shares traded was more than double the three-month daily average.
“It is good news they have managed to get him so quickly,” Clive Black, an analyst at Shore Capital Group Ltd., said by phone. “I am pleased an appointment has been made.”
Black, who cut his recommendation to hold from buy on Dec. 10 when McMeikan said he was resigning to take up the same position at closely held Brakes Group, will leave his rating unchanged until it becomes clear whether Whiteside will follow the company’s current strategy, he said.
“On the balance of probability the appointment does represent continuity,” Black said. “We want to make sure how he wants to take it forward” before restoring the rating.
Whiteside, 54, took over as CEO of Punch in September 2011 following its separation from Spirit Pub Co. He previously worked for 20 years at Marks & Spencer Group Plc, heading its food business. He was one of the founders of Ocado Group Plc, where he was joint managing director from 2000 to 2004, before heading Thresher Group Ltd., then the U.K.’s largest liquor-store chain, until 2007. He joined Punch in November 2008.
Punch shares gained 16 percent between Whiteside’s appointment and the announcement of his resignation. The stock fell 3.3 percent to 10.875 pence.
Greggs’ current streak may reflect a catch-up with a rally among similar-sized consumer companies such as Dairy Crest Group Plc, Black said. Greggs was the fifth-worst performer among the 87 companies in the FTSE All-Share Index last month.
The company was at the heart of last year’s “pastygate” row over plans to make Cornish pasties and other hot baked foods subject to value-added tax. It had its biggest one-day gain in 15 years on May 29 when the government scrapped the proposal.