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Greggs profits boosted by healthier options and shop upgrades Greggs profits boosted by healthier options and shop upgrades
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High street baker Greggs has posted a 51% rise in profits for the first half of the year thanks to strong demand for its breakfast range and healthier sandwiches and flatbreads. The high street baker Greggs has posted a 51% rise in profits for the first half of the year thanks to strong demand for its breakfast range and healthier sandwiches and flatbreads.
The company raised its full-year guidance for the second time in three months as a result of favourable market conditions and well received improvements to its products and shops.The company raised its full-year guidance for the second time in three months as a result of favourable market conditions and well received improvements to its products and shops.
Greggs, which is based in Newcastle and operates 1,664 retail outlets, reported profit before tax of £25.6m in the six months to 4 July, up from £16.9m in the same period last year. Sales increased 6.4% to £398m.Greggs, which is based in Newcastle and operates 1,664 retail outlets, reported profit before tax of £25.6m in the six months to 4 July, up from £16.9m in the same period last year. Sales increased 6.4% to £398m.
“We are confident of delivering a year of good growth slightly ahead of our previous expectations,” said CEO Roger Whiteside. “We are confident of delivering a year of good growth slightly ahead of our previous expectations,” said Roger Whiteside, chief executive of Greggs.
In April, the company said shareholders would share a £20m special dividend after the baker beat its expectations, again on the back of a growing customer appetite for products with less than 400 calories. In April, the company said shareholders would share a £20m special dividend after the baker beat its expectations, again on the back of a growing customer appetite for products with fewer than 400 calories.
Whiteside said there was a significant growth in breakfast sales as well as from the extension of the range of lower-calorie sandwiches and flatbreads. He said there had been a good reaction from customers to shop refurbishments that saw 118 refits and 12 cafe conversions.Whiteside said there was a significant growth in breakfast sales as well as from the extension of the range of lower-calorie sandwiches and flatbreads. He said there had been a good reaction from customers to shop refurbishments that saw 118 refits and 12 cafe conversions.
Shares in the group, which have more than doubled over the last year, rose almost 3% to £12.17, valuing the business at £1.2bn.Shares in the group, which have more than doubled over the last year, rose almost 3% to £12.17, valuing the business at £1.2bn.
Under Whiteside, the company has pushed coffee sales, introduced free-range omelettes and porridge for breakfast and added extra seating to branches, diversifying from its traditional image as purveyors of sausage rolls, pies and pasties. Under Whiteside, the company has pushed coffee sales, introduced free-range omelettes and porridge for breakfast and added extra seating to branches, diversifying from its traditional image as a purveyor of sausage rolls, pies and pasties.
Greggs was in the doldrums two years ago and was forced to publish two profit warnings in 2013. Whiteside’s overhaul helped push profits up 41% last year. Greggs was in the doldrums two years ago, forced to publish two profit warnings in 2013. But Whiteside’s overhaul helped push profits up 41% last year.
Hollywood actor Jake Gyllenhaal recently revealed himself to be a fan of Greggs: “I eat Greggs, Greggs baguettes – that’s what I eat when I’m in London,” he said in an interview with Magic FM. The Hollywood actor Jake Gyllenhaal recently revealed himself to be a fan. “I eat Greggs, Greggs baguettes – that’s what I eat when I’m in London,” he said in an interview with Magic FM.
Whiteside said it was “never harmful” to have a celebrity endorsement but that there had been no contact with the actor. “There is a long list of celebrities who have been caught [on camera] one way or another coming out of a Greggs. So Jake is the latest convert. More of him please and all of his social media friends,” he said.Whiteside said it was “never harmful” to have a celebrity endorsement but that there had been no contact with the actor. “There is a long list of celebrities who have been caught [on camera] one way or another coming out of a Greggs. So Jake is the latest convert. More of him please and all of his social media friends,” he said.
The healthy eating segment of the business - such as the low calorie sandwiches and porridges at breakfast - is the fastest growing section of the company, said Whiteside, with sales of over £1m a week, albeit from a low base. Overall revenues amount to about £15m per week. Sales of its sausage rolls, an item most closely associated with Greggs, are also increasing, he said. Three quarters of the company’s stores now open by 7am to attract the breakfast market. The healthy eating segment of the business – such as the low-calorie sandwiches and porridge – is the fastest growing section of the company, said Whiteside, with sales of more than £1m a week, albeit from a low base. Overall revenues amount to about £15m per week. Sales of its sausage rolls, an item most closely associated with Greggs, are also increasing, he said.
The company aims to open 20 to 30 new stores this year and between 30 and 50 from next year, said Whiteside. Three quarters of the company’s stores now open by 7am to attract the breakfast market. The company aims to open 20 to 30 new stores this year and between 30 and 50 from next year, said Whiteside.