Greggs sales fall due to bad weather, outlook stays tough

26th Feb 2014 08:12

Bakery chain Greggs took a hit to annual sales from bad weather last year, but said it was encouraged by early results of an overhaul of the business.Greggs, which had 1,671 shops in the UK at the end of last year, said like-for-like sales in the year to December 28th fell 0.8%. Total sales rose 3.8%, but pre-tax profits before one-off items fell 18.9% to £41.3m.The chain faced a hit from unfavourable weather as shoppers stayed off the high street due to snow in the first quarter and a heatwave in the third quarter.But its fortunes improved later in the year, with like-for-like second half growth of 1.2% and of 2.6% in the fourth quarter.Chief Executive Roger Whiteside has launched an overhaul of the business by upgrading products such as pizza and introducing other takeaway-style food.It has also launched a job cull by closing the company's in-store bakeries and moving production to regional baking hubs.Whiteside said he was encouraged by the improvements in the latter part of 2013, but said 2014 was likely to stay tough."Although economic activity across the UK is showing some signs of improvement, management is planning for continued pressure on footfall and consumer spending and an increasingly competitive food-on-the-go market," he said.Greggs kept its final dividend at 13.5p per share, making for an unchanged total dividend for the year of 19.5p. "In the short term, so long as cash flow allows, it is the Board's intention to maintain the dividend at or around this level with the intention of adopting, in the medium term, a progressive dividend policy with the dividend around two times covered by underlying earnings," Greggs said.Shares in Greggs fell 30p to 500p in early trading in London.PW