1st Jul 2014 08:16
LONDON (Alliance News) - UK bakery chain Greggs PLC saw its shares rise Tuesday after reporting good sales growth in the first half of the year and saying it expects to report a bigger operating profit for the period.
Greggs shares were up 1.9% at 546.00 pence Tuesday morning.
Greggs has been busy revamping and improving its store portfolio, whilst keeping a tight lid on costs as it tries to build a bigger food-on-the-go business to try to capitalise on the shift in consumer demand for these products from take-home bakery products.
With total sales up 3.1% in the 26 weeks to June 28, Greggs said it expects to report an operating profit of between GBP16 million and GBP17 million for the first half of the year, up from the GBP11.5 million profit it reported for the same period last year.
Besides cost control and good sales growth, Greggs said it will also benefit from property disposal profits of around GBP1.4 million.
"Sales comparables strengthen in the second half although the risk of further input cost inflation appears to be reducing. Overall, we expect to deliver an improved financial result for the year and further progress against our strategic plan," Greggs said in its statement.
Own shop like-for-like sales returned to growth in the period, rising 3.2%, representing a turnaround from a 2.9% like-for-like decline a year earlier, which it said had dragged down its operating profit to GBP11.5 million.
"Whilst our year-on-year performance has benefited from comparison with a period of weak trading in 2013, sales growth is also being driven by initiatives that have further improved our products, availability, service and value," the company said.
Greggs said it completed 131 shop refurbishments in the first half of the year, in line with its plans to refit around 200 shops during 2014. It also opened 26 new shops and closed 36 shops, although it said it expects shop numbers for the year as a whole to be broadly flat. It was trading from just over 1,660 shops at the end of the period.
Greggs said it will release its full interim results on July 30.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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