Greggs H1 profits warm up on new products and shop refits - UPDATE

30th Jul 2014 08:12

New products and shop refits heated up half-year profits at British high street baker Greggs, but it warned of tougher trading later in the year.Greggs said a rise in pre-tax profit in the 26 weeks to June 28th to £16.9m from £11.4m a year ago should be taken in the context of a period of weak trading last year.But it said the figures also benefited from initiatives such as a new and improved coffee blend and extension of "meal deals" to include hot drinks, cakes, pastries and a wider range of sandwiches.Finance Director Richard Hutton said the chain had benefited from generally dry weather in the first half of the year, rather than extremes of rain or heat.Greggs attempts to offset particularly hot or cold weather by increasing cold drink ranges in warm conditions and more pies, pasties and soup when it is cool or wet.Hutton added that consumer confidence appeared to have stabilised in the last year as people gained more disposable income, but they were still cautious."It does seem to be more stable, but I'm not saying we're out of the woods," he told journalists on a telephone conference call. Greggs launched new and improved sandwiches including 'Balanced Choice' products with fewer than 400 calories. It has also been improving and adding new varieties to its range of pizzas and pasties.The group refitted 131 of its shops, opened 26 and closed 36, giving it 1,661 stores by June 28th.Total sales rose 3.1% to £373m, own shop like-for-like sales lifted 3.2%, it made £1.4m on property sales against £200,000 last year and kept its dividend per share at 6p.Greggs said sales growth in July stayed strong in the absence of last year's heatwave, but it expected the performance to fall back in the months ahead against better trading in the rest of the year.Chief Executive Roger Whiteside said: "Overall, we expect to deliver an improved financial result for the year and further progress against our strategic plan." Shares rose 20.5p or 4.1% to 520.5p at 11:33 in London.PW