Greggs, the high street baker and sandwich shop chain, has this morning unveiled half-year like-for-like sales (LFLs) growth of 1.5%.
It warned that high street trading remained difficult and had recently been impacted by wet weather leading to a slowing of LFLs in the second quarter, down from 2% at 19 weeks.
For the 26 weeks to 27 June 2009 sales were up from £299m in 2008 to £312m.
Operating profit increased by 8.9% to £16.3m, up from £15.4m the year before.
Ken McMeikan, chief executive, said: “Greggs has achieved its leading market position by consistently offering both great quality and great value to more than one million customers each day. In the current climate the quality, value and freshness of our products continue to stand out as our key points of difference as the country's foremost provider of bakery food-on-the-go.”
The company said it had taken steps to simplify and centralise its business and a new bakery was now online in Manchester to improve efficiency and capacity in the North West.
It opened 14 new shops during the year – including its first petrol station site – and it closed 31 outlets, including 10 shops in Belgium.
Greggs now has 1,382 shops and it said it remained on target to add 10 shops overall in the second half. It has also rebranded 40% of its Bakers Oven sites into the Greggs format.
The operator has also experimented with a new concept shop, the first of which has been trading well in the South East and it hopes to open two more in the year. These shops highlight the group’s “bakery heritage” and have been designed to encourage browsing and increase purchases.
The group’s cheese and onion pasty, a best seller, has also been improved with a new three cheese recipe and led to 25 million sales of its new pastry range, which also includes a chicken fajita pasty.
Greggs said it had also removed all hydrogenated fats and oils from its own-baked products – and was on-track to remove all artificial colourings by the end of the year.
The company's net cash was £14.9m and it increased its interim dividend by 6.1% to 5.2p – its 24th year of consecutive dividend growth.
It added that capital expenditure for the first half had been £10.3m, below expectations and that it would not exceed £30m during the year.
