Greggs enjoys strong H1 results after products and stores investments
Favourable market conditions, new poducts and stores investments helped Greggs to deliver strong first-half results.
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The bakery chain saw its revenues increase 6% to £398.4m while total pre-tax profits tripled to £25.6m during the six months ended 4 July 2015.
The results were driven by a boost in breakfast sales and from the extension of its "Balanced Choice" range of sandwiches and flatbreads with fewer than 400 calories.
As a result, the group declared an interim dividend of 7.4p per share, an increase from 6p last year.
Looking ahead, its second half is expected to come up against stronger sales comparatives versus last year, but new product initiatives and favourable market conditions including ingredient cost deflation are anticipated to deliver full-year results ahead of its previous forecasts.
Chief executive Roger Whiteside said the strong results were due to products improvements and positive reaction to its shop investment programme.
"With the shop refurbishment programme continuing to progress well and new additions to the product range including pizza slices, we are confident of delivering a year of good growth slightly ahead of our previous expectations," he added.
Shore Capital said: "Newcastle-upon-Tyne should be toasting or is that sausage roiling Greggs after another impressive update that represents a beat of our expectations at half-time in the current financial year and leads us to outline our expectation of further upgrades to our forecasts for group profitability."
The broker added it believes Greggs has the fuel of net new stores coming through and a wide range of potential additional growth opportunities to explore.
As a result, it reiterated its 'buy' recommendation and price target of 1185p, at same time as it upgraded its full-year pre-tax profits forecasts to £70.5m from £68.4m.
The company's shares rose 3.12% to 1221p on Wednesday at 0933 BST.