Greggs Profit Down On Restructuring Costs But Breakfasts Boost Revenue

Half-year sales have passed the £450m mark at bakery giant Greggs as the company continued to enjoy success with its breakfasts and healthy eating range. "In the short term. we remain alert to pressures building on consumers' disposable income and the continuing economic uncertainty".

Revenue, however, rose to GBP452.9 million from GBP422.1 million, boosted by a 3.4% rise in company-managed shop like-for-like sales thanks to good sales of coffee and breakfast items, "Balanced Choice" salads and drinks, hot food and "traditional savoury favourites".

Pre-tax profit including property profits and exceptional charges amounted to £19.4m.

The group has opened 61 new shops and closed 19 since the start of the year, with plans for 100 new sites in 2017.

Greggs is looking to open drive-through shops around the country after a trial run proved a hit with with on-the-move Mancunians.

More Greggs drive-through stores could be on the way after the high street baker said it was encouraged by the popularity of the first drive-through it opened in June.

The company has also undertaken the "most significant process change that the business has ever embarked upon" with the deployment of its central forecasting and replenishment system. "Inevitably, there has been some increase in costs in the transition but there is a clear net benefit already and we will build on this as we learn to harness the benefits of this new technology".

The interim dividend was lifted 8.4% to 10.3p.

Speaking with The Guardian, Greggs boss Roger Whiteside has said: "It's all about convenience and the most convenient thing is not having to get out of your auto".

LONDON-Greggs PLC (GRG.LN) Tuesday reported a 24% fall in first half pretax profit, which it blamed on cost inflation pressures, but said it remains confident for the future while remaining alert to short-term pressures on consumers' disposable income.