Sales at Greggs exceeded the £1bn mark for the first time in 2018.

This morning the company gave a full update on trading after revealing earlier this year that like-for-like sales (lfls) in the year to 29 December had risen 2.9% in its company managed sites – made up of 1.5% increase in H1 and 4.2% in H2. In the fourth quarter lfls were up 5.2%. In the seven weeks to 16 February, lfls grew 9.6%.

The group also updated on its transformation plans, which is due to complete in 2021, and give Greggs the capacity to grow the estate to around 2,500 shops. Further focus over the current financial year will include expanding the product range to “build a reputation in new areas that create more reasons to visit Greggs, meeting food-on-the-go needs at all times of the day”. The group said that as its brand reputation grew it was driving reappraisal.

The company said its early forays into click and collect and delivery had been encouraging and were likely to grow in importance.

Chief executive Roger Whiteside said: “2018 was a year that tested the resilience of Greggs’ business model and demonstrated the benefits of our strategic investment programme. The first half was significantly impacted by extreme weather but once this returned to normal our underlying strengths helped us recover the lost ground and deliver results for the year that exceeded our expectations.

“Whilst there are significant uncertainties in the months ahead, Greggs has started 2019 in great form, helped in part by the publicity surrounding the launch of our vegan-friendly sausage roll. We hope to continue benefiting from this strong momentum during the first half of 2019 before facing stronger comparatives later in the year. We have a strong financial position which we plan to use to invest in Greggs’ potential for further growth, whilst also delivering good returns for shareholders.”

During the year 149 new shops were opened with 50 closures, making 99 net openings and taking the estate to 1,953 shops trading at 29 December 2018

The update revealed that, on average, a company-managed shop generated sales of £568,000 in 2018, and required £226,000 in capital employed, generating a cash return of 37% on this capital (taking into account store-level cash contribution less an allocation of incremental support costs). Annual income from a franchised shop was, on average, £211,000 in the same period, and required £89,000 in capital employed. After allocated support costs franchised shops generated a cash return of 29% on capital.