Strong results for Greggs as it brushes off the crumbs of Brexit to carry on cooking
Profits were flat at pasty-flogger Greggs, in the first half of the year as the baker said it hoped to avoid being hit by weaker consumer spending following the EU referendum.
The figures
Profits before tax at the FTSE 250 high street fast-food outlet were down just shy of one per cent to £25.3m on the back of strong sales growth.
Total revenues increased by six per cent to £422m, up 3.8 per cent on a like-for-like basis, and the firm said it expects the number of shops it operates to increase by 70 this year. The baker heralded new offers, including a relaunch of its mobile app and a new "Balanced Choice" offer of healthier snacks and more upmarket hot drinks.
Why it's interesting
The march of Greggs as a British high-street success story shows few signs of stopping, as the total number of stores could reach close to 1,800 by the end of the year.
The firm championed a strong understanding of its customers shift towards healthier and higher-quality food and drink options – announced earlier this year – as the reason behind a six per cent jump in sales. Although profits were unmoved, the baker's expansion across the high streets and shopping centres of the UK is clearly its priority.
Greggs was not immune from the problems which have hit other big high street names in terms of pension liabilities. The shortfall on the company's defined benefit scheme more than tripled from £5.2m to £17.7m in the first six months of the year.
The blue-bannered baker was also keen to stress it was "alert" to any potential fallout from the UK's decision to leave the European Union, but said it does not expect its performance to suffer.
What Greggs said
Roger Whiteside, chief executive of Greggs said:
We have made an encouraging start to the second half of the year and are alert to any change in consumer demand that may result from the current economic uncertainty. Overall, we expect to deliver full-year growth in line with our previous expectations as well as further progress against our strategic plan.
In short
Business as usual at this high-street favourite, though a swelling pension deficit may require some attention before long.