UK's Greggs profit rises on new stores and better ranges

[LONDON] British baker Greggs met forecasts with a 2 per cent rise in 2017 profit, helped by new store openings and extensions to its product ranges, it said on Tuesday.

The firm, which is transforming itself from a traditional bakery business into a broader takeaway food retailer, said the UK consumer outlook remained challenging but it was encouraged by the start it had made to the new year.

Greggs made a pretax profit before one off items of 81.8 million pounds (S$150.6 million) for the year to Dec. 30 2017 - in line with analysts' expectations and up from 80.3 million pounds in 2016.

Total sales rose 7.4 per cent to 960 million pounds.

Like-for-like sales in company managed shops were up 3.7 percent and are up 3.2 percent in the eight weeks to Feb. 24.

Greggs, which is based in Newcastle in northern England, said it had benefited from improvements to its product range, with a focus on hot drinks, hot food and healthier options. It also opened a net 90 new shops, ending the year with 1,854 outlets, and plans a record number of new shops in 2018.

The firm also raised its dividend 4.2 per cent to 32.3 pence.

"Greggs continues to demonstrate its resilience in the face of economic uncertainty," said Chairman Ian Durant.

"This environment seems unlikely to change in the short term as the UK negotiates its exit from the European Union, with the associated risks to consumer confidence and further cost inflation." Shares in Greggs, up 30 per cent over the last year, closed Monday at 1,312 pence, valuing the business at 1.33 billion pounds.

REUTERS