Greggs claims resilience amid weak consumer confidence
Greggs said its trading was resilient as the purveyor of sausage rolls and other "food on the go" reported profit down 7% in a first half clouded by bad weather and weak consumer spending.
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Underlying operating profit for the six months to the end of June fell to £25.7m from £27.6m a year earlier as total sales rose 5.2% to £476m. Like-for-like sales at company-managed stores rose 1.5%.
Including property profits and exceptional charges, pre-tax profit rose to £24.1m from £19.4m. Greggs increased its interim dividend 3.9% to 10.7p a share.
The FTSE 250 company’s shares, down 26% in 2018, rose 7.2% to £10.31 at 10:11 BST.
Greggs said sales were driven by value meal deals including a £2 breakfast offer and a pizza slice and a drink for £2 after 4pm. Chief executive Roger Whiteside said the first half was marked by extreme weather, including frozen conditions in March, and consumers holding back on spending.
"Greggs has delivered a resilient performance despite challenging market conditions,” Whiteside said. “While we remain cautious in respect of the outlook for sales in the balance of the year given the consumer backdrop, we are confident in the medium and long-term growth potential for the business.”
Whiteside repeated guidance that annual profit would be little changed from 2017. The company’s shares tumbled in May when it said 2018 profit would be flat due to weak footfall on high streets and the effects of the winter weather.