Shares in Greggs were up on the FTSE 250 in morning trading after the bakery chain reported a rise in sales and pre-tax profit in the year ended 1 January 2011.

Group sales increased 2.1 per cent to £662 million, while on a like for like basis sales were up 0.2 per cent. Pre-tax profit in the period rose 7.9 per cent to a record £52.5 million.

Greggs said that it had seen a record number of shop openings and refits in the year, with a net 68 new shops opened, taking the group's total number of retail outlets to 1,480. The company added that it is now serving six million customers every week.

Following the results Greggs said it would be raising its total dividend 9.6 per cent to 18.2 pence per share.

Kennedy McMeikan, Chief Executive of Greggs, said, "In 2010 we grew sales and achieved record profits despite the tough trading conditions across the UK. I am delighted that we've made Greggs accessible to many more customers through our new shop opening programme, bringing them the great value, freshness and quality that our existing customers already enjoy.

"Whilst 2011 will see further pressures on consumer spending and rising global commodity prices our strong value positioning, excellent products, outstanding staff and clear strategy for growth mean that we are well positioned to deal with this challenging environment.

"In addition to opening around 80 net new shops in the year ahead we are planning for marginally positive like-for-like sales growth. Performance in the year to date is in line with our expectations with total sales increasing by 3.8 per cent including like-for-like sales of 0.4 per cent."

Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers, commented, "Despite fears over rising raw material costs such as wheat, a profit margin ahead of analyst expectations has been achieved, led by a series of management initiatives.

"The company's value proposition continues to support an ongoing roll-out of the group's stores, with breakfast promotions proving popular with consumers and costs being removed via increased supply chain efficiencies. In addition, improvements in staff and buying practices have also been made, whilst existing store refits have played their part.

"In all, a reputation for progressive delivery has again been enhanced, with the company recording its 26th consecutive year of dividend growth. As such, and in uncertain times, market consensus opinion continues to denote a buy."

By 09:10 shares in Greggs were up 3.84 per cent on the FTSE 250 to 483.80 pence per share.

FTSE