News Column

Greggs profits surge

July 31, 2014

Jennifer Rankin,

Greggs has reported a near 50% increase in profits, following the launch of low-calorie sandwiches and a revamp of its hot drinks.

The bakery chain, which has 1660 stores in the UK, said sales rose 3% to 373m in the first half of the year, helping pre-tax profits reach 17m.

Greggs acknowledged its numbers were flattered by weak trading in 2013, a year when it issued two profit warnings and blamed hot weather, cold weather and "promiscuous shoppers" for its problems.

Sales began to pick up at the end of last year, but a decision to scrap dozens of in-store bakeries and a management cull led to the loss of 400 jobs. The company has abandoned plans increase its total number of stories and create coffee shops to concentrate on its traditional range of baked goods. But it plans to spend 50m to upgrade 200 shops this year.

Greggs said its new coffee blend had been well received and attributed higher sales to improved products and service. It also said it was benefiting from more favourable trading conditions: "The weather has been more settled and the general economic indicators have been positive." Low commodity price inflation and the increasing tendency to eat food on the go are adding to the wind in its sails.

The company announced it will pay a dividend of 6p a share.

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Source: Guardian Web

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