Greggs sales up but profit drops on cost inflation
FTSE 250 baker Greggs reported a rise in first-half sales on Tuesday thanks to continued growth in its breakfast, coffee and ‘balanced choice’ ranges, although pre-tax profit declined on the back of cost inflation pressures.
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Greggs
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In the 26 weeks to 1 July, total sales were up 7.3% to £453m, with like-for-like sales in company-managed shops up by 3.4%. However, pre-tax profit including property profits and exceptional charges fell to £19.4m from £25.4m the year before as the business experienced pressure from cost inflation, as expected.
The company, renowned for its sausage rolls, opened one new shop in the period and closed 19. It expects to have added around 100 net new shops for the year as a whole.
Greggs, which lifted its interim dividend by 8.4% to 10.3p per share, said it had benefited from its extended ‘balanced choice’ range and the launch of new salads and drinks. Meanwhile, its hot sandwiches grew increasingly popular and demand for coffee and breakfast remained strong. In addition, it continued to see good growth in traditional products such as fresh-baked savouries.
Chief executive Roger Whiteside said: “The business has traded in line with our plans during the first half of the year. We have made good progress with our strategic plans and remain confident of future prospects although we remain alert to short-term pressures on consumers' disposable income. Over the year as a whole we expect to deliver results in line with our previous expectations as well as further progress against our strategic plan."
At 0910 BST, the shares were down 0.5% to 1,096.50p.