Greggs raises full-year guidance again

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Bakery firm Greggs raised its full-year guidance for the second time in three months after posting a 51 per cent rise in first half profit that reflected favourable market conditions and well received improvements to its products and shops.

Northern-based Greggs, which sells sausage rolls, sandwiches and pastries from 1,664 retail outlets, said on it made a profit before tax of £25.6m in the 26 weeks to July 4, up from £16.9m in the same period last year.

Roger Whiteside, chief executive, said: “With the shop refurbishment programme continuing to progress well and new additions to the product range including pizza slices, we are confident of delivering a year of good growth slightly ahead of our previous expectations.”

Prior to the update analysts were on average forecasting a 2015-16 pretax profit of £67m, up from £58.3m pounds in 2014-15.

Greggs’ total sales increased 6.4 per cent to £398m in its first half, with sales at owned shops open over a year up 5.9 per cent.

Mr Whiteside noted significant growth in breakfast sales as well as from the extension of a range of sandwiches and flatbreads with fewer than 400 calories.

He also highlighted good customer reaction to Greggs’ shop refurbishment programme that saw 118 refits and 12 cafe conversions.

Shares in Greggs have increased 138 per cent over the last year, hitting a record high of 1,216 pence in June.

The stock closed at 1,184 pence on Tuesday, valuing the business at £1.2bn.

In April Greggs announced a £20m special dividend in light of its strong cash position.

It said it would pay an ordinary interim dividend of 7.4 pence, up from 6 pence last time.