Greggs chief executive Roger Whiteside said: “We have had a strong first half with good growth in sales reflecting improvements in our products and the reaction to our shop investment programme.
‘Growth in breakfast sales’
“Our offer of great tasting food-on-the-go is being well received by the consumer in market conditions that have remained favourable. In particular we have seen significant growth in breakfast sales as well as from the extension of our ‘Balanced Choice’ range of sandwiches and flatbreads with fewer than 400 calories,” said Whiteside.
The shop refurbishment programme was said to be progressing well. New additions to the product range, including pizza slices, made Greggs confident of delivering “a year of good growth slightly ahead of our previous expectations”, said Whiteside.
During In the second half of the year the firm will come up against progressively stronger sales comparatives, he warned. “That said we have a strong pipeline of product initiatives, and market conditions are expected to remain favourable with ingredient cost deflation expected to continue for the balance of the year.”
‘Very strong interims’
City analyst N+1 Singer praised the results, describing them as “very strong interims and [the] wind [is] in its sails going into H2 [the second half of the year]”.
The results were much stronger than expected and good momentum had built for the second half of the year.
The results lead Greggs to upgrade its earnings per share forecast by 2.5–4.5%. “We firmly feel that Greggs’s business model is in great shape and on growth considerations/returning excess cash to shareholders see fair value towards 1,400p.”
Read why city analyst Shore Capital believed Newcastle should toast the baker’ s success here.
Greggs’s first half results – at a glance
- Total sales up 6.4% to £398M
- Own shop like-for-like sales up 5.9%
- Prior year restructuring benefits contributed £2.4M year-on-year
- Pre-tax profit £25.6M