Greggs serves up growth as it continues to expand

The FTSE 250 bakery chain said that in the 52 weeks to 30 December, company-managed shop like-for-like sales were ahead 3.7% - slower than the 4.2% growth seen in in 2016 - while its operating profit excluding property profits and exceptional items was ahead 4.6% at £81.7m.

Pre-tax profit excluding exceptional items rose to £81.8m from £80.3m, with Greggs’ pre-tax profit falling to £71.9m from £75.1m once those exceptional items were included.

The board reported “strong” cash generation, supporting its investment programme for further growth.

It confirmed the total ordinary dividend per share had risen 4.2% to 32.3p.

On the strategic front, the company said it had made further improvements to its product range, with a specific focus on hot drinks and hot food.

Greggs’ healthier options menu was growing strongly, with the 'Balanced Choice' range accounting for more than £100m of sales.

A total of 131 new shops were opened and 41 were closed, making for 90 net openings, with 1,854 shops trading as at 30 December.

The board said it also made continued investment to consolidate manufacturing operations and expand its logistics capacity.

A new shop replenishment system was successfully rolled out, and a supply chain solution was piloted during the year.

Looking at current trading, Greggs said it was encouraged by the start to the year, with company-managed shop like-for-like sales up 3.2% in the eight weeks to 24 February.

“In 2017 we delivered another strong performance in challenging economic circumstances as rising inflation impacted both our own costs and customers' disposable income,” said chief executive Roger Whiteside.

“At the same time we continued to make good progress with our business transformation programme.”

Whiteside said that, whilst the UK consumer outlook remained challenging, the company was encouraged by the start to the year.

“2018 will be the peak year for investment in our supply chain as we create the platforms for further growth.

“We also plan to open a record number of new shops as we implement our plan to grow Greggs as a leading food-on-the-go brand.”