UK's Greggs says vegan sausage roll a hit, guides higher on profit

[LONDON] Strong demand for its new vegan sausage roll drove a 14 per cent rise in sales for British high street baker Greggs in the first seven weeks of 2019 and prompted the company to promise underlying pretax profit ahead of previous expectations.

The positive outlook comes less than two months after the company nudged up its 2018 profit forecast to at least 88 million pounds (S$154 million) after demand for its festive bakes, mince pies, hot drinks and breakfast items led to a "very strong" finish to the year.

It is expected to announce results for the full-year ended Dec. 29 on March 7.

The company, which opened 149 new shops last year to take its total to 1,953, said it had "made an exceptionally strong start to 2019" and that comparative sales growth for the first-half would be higher compared to last year when sales were suppressed due to extreme weather across the UK.

Like-for-like sales in company-managed shops rose 9.6 per cent in the seven weeks to Feb.16 and total sales grew by 14.1 per cent. However, the company said the rate of growth in sales had eased slightly in February.

Pretax profit for 2019 is expected to average 88.6 million pounds, according to IBES data from Refinitiv.

The FTSE-250 company's shares were expected to rise as much as 5 per cent, according to premarket indicators.

REUTERS