Hot snacks seller Greggs (LON:GRG) buttered up the market with a big dividend hike after unveiling an impressive rise in underlying profits.
The company hailed its increasing focus on the growing-food-to-go market, as it moves further away from its origins as a baker, for a full-fat set of figures.
Total sales in the 52 weeks ended 2 January 2016 were up 5.2% from the previous year (stripping out the extra week in the previous year) at £835.7mln, while like-for-like sales in the company's managed outlets were up 4.7% year-on-year, having risen 4.5% in 2014.
Pre-tax profit excluding exceptional items rose 25.4% to £73.0mln from £58.3mln the year before, while cash generation was strong, paving the way for a 30% hike in the full-year dividend to 28.6p from 22.0p, plus the promise of repeating the 2015 payment of a special dividend.
The company announced a £100mln investment programme in manufacturing and distribution operations, but three bakeries failed to make the cut and will be closed, resulting in up to 355 redundancies.
The bakeries proposed for closure are Twickenham, Edinburgh and Sleaford.
The new financial year has started well and like-for-like sales in the eight weeks to 27 February 2016 grew by 4.2% year-on-year, with Total sales up 6.8%.
“This year has started well and the consumer outlook remains positive with disposable incomes expected to grow further in 2016. Overall 2016 will be another year of significant change as we advance with our strategic plan and propose major investment in our supply chain. Alongside this we are confident of delivering a further year of underlying growth," said Roger Whiteside, chief executive of Greggs.
Shares in Greggs were up almost 16% in mid-afternoon trading.