Greggs offers special dividend after 'exceptional' first half

Greggs rewarded investors with a special dividend on Tuesday, after an "exceptional" first half performance saw double-digit increases to interim profit and revenue amid the continued popularity of its vegan sausage roll.

The purveyor of all things pastry declared a special dividend of 35.0 pence per share, on top of an interim dividend of 11.9p, which is 11% higher than last year's interim dividend.

The shareholder reward came after the bakery chain reported a profit before tax of £36.7m for the six months period ended 30 June, an increase of 53% on the same period in 2018, as revenue climbed 15% higher to £546.3m as demand for the vegan sausage roll outstripped the company's expectations after it launched the product earlier this year.

Margins also increased from 5.4% to 7.5% as the company said delivered improved operational cost control.

Greggs, which now has 1,984 shops after 54 new openings in the period, left full-year profit expectations unchanged and said it now intends to boost investment in strategic initiatives that will help to deliver a stronger customer proposition and sustained growth.

However, the FTSE 250-listed company also noted like-for-like growth is likely normalise in the second half of the year as the business starts to face stronger comparatives, while overall cost inflation is now set to be at the higher end of full year expectations due to higher food input costs.

Roger Whiteside, chief executive of Greggs, said: "Greggs has delivered an exceptional first half performance, building on the strong finish to 2018. We have continued to make strategic progress with our programmes of investment in infrastructure to support future growth and in developing the products and channels to market that will help achieve our ambition to be the customers' favourite for food-on-the-go."

Greggs' shares were down 2.60% at 2,322.00p at 0900 BST.