Greggs serves up interim sales increase as healthy food options pay off

Bakery chain Greggs posted an increase in sales in the first six months of its financial year, as the company's decision to provide a range of healthy food options for its customers continued to prove successful.

In the 26 weeks to 2 July, the FTSE 250-listed company saw sales rise 6% year-on-year to £422m (€497.7m, $557m), as like-for-like sales grew 3.8% compared to the corresponding period in the previous year.

Operating profit excluding property gains and exceptional charge were up 6.7% to £27.2m, while pre-tax profit including property profits and exceptional charges stood at £25.4m, slightly below the £25.6m recorded in the first half of last year.

Greggs attributed the positive performance to the ongoing popularity of its 'Balanced Choice' range, which offers customers healthy food options compared with the range of pies and pasties traditionally associated with the brand.

"We delivered good like-for-like growth by reinforcing the freshness and value of our offer in line with changing trends in the food-on-the-go market," said group chief executive Roger Whiteside. "We added to our 'Balanced Choice' range with sales growing strongly as more and more of our customers recognise the quality, range and value we offer in these healthier food choices."

The group, which lifted its interim dividend from 7.4p per share to 9.5p, opened 68 new shops and closed 36 stores in the period and it expects around 70 net new shops in the year. Greggs made £2.2m from property disposal in the first half, compared with £200,000 in the corresponding period last year.

Whiteside added the food on-the-go retailer had made a good start to the second half of the year and remained 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," he said.