The vegan sausage roll continued to rock for Greggs PLC (LON:GRG), the Newcastle-based bakery giant which delivered what it described as an “exceptional” first-half performance and rewarded investors with 35p special dividend.
Underlying profits grew by 58% for the 26 weeks to June 29 on sales of £546mln, up almost 15%, or 10.5% on a like-for-like basis.
It also managed to grow its operating margins by 2.1 percentage points thanks to tight cost control.
Greggs ended the period with almost £86mln of cash. So, along with the special divi, it is making an ordinary payout of 11.9p, up 11.2% on a year ago.
Achieved against tough retail backdrop
All of this has been achieved against a backdrop of poor High Street trading for mainstream retailers.
Perhaps aware of tough environment, aided and abetted by the commercial brake applied by Brexit, Greggs has chosen to keep its expectations for the full-year unchanged.
“We have continued to make strategic progress with our programmes of investment in infrastructure to support future growth and in developing the products and channels to market that will help achieve our ambition to be the customers' favourite for food-on-the-go,” said chief executive Roger Whiteside.
Shopping centre staple
Success was founded on the runaway success of the vegan sausage roll; however, traditional bakery favourites remained popular along with Greggs’ Fairtrade coffee and its breakfast menu.
A shopping centre staple, Greggs opened 54 new shops and closed 23, putting it on course for a net 100 new shops by the year-end. Its estate is currently just below 2,000.
"Given the strength of our year to date and the outlook, we have decided to increase investment in strategic initiatives in the second half of the year to help to deliver an even stronger customer proposition and further growth in the years ahead,” said CEO Whiteside.