Greggs has hailed an ‘exceptional’ start to the financial year as the success of its latest menu additions helped profits to rocket more than 50%.
The food-on-the-go firm, which now has 1,984 shops across the 海角视频, said its vegan sausage rolls had boosted performance and strong growth was also seen in breakfast, coffee and new hot food options including its afternoon pizza deal.
Pre-tax profits for the 26 weeks to June 29 rose more than 52% to £36.7m and turnover was up 14.7% to £546m.
Underlying profits, which strips out property gains and a £4m restructuring charge, were up 58% to £40.6m.
Chief executive Roger Whiteside said the vegan sausage roll may have taken most of the headlines but that customers – often flexitarians – were more than happy to snap up other savoury and sweet treats if the vegan flaky roll had sold out.
As a result, he revealed its number bestseller, the pork sausage roll, was enjoying a record year – a fact which will now see investments brought forward in its North East site to increase capacity for frozen storage of savoury treats.
He said: “We came into 2019 with good sales momentum, which had built progressively through the second half of 2018.
“The launch of the now famous vegan-friendly sausage roll took this to another level, with initial demand significantly outstripping our expectations. The product has remained extremely popular with customers and is now one of our top sellers, demonstrating the demand for greater dietary choice in food-on-the-go.
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“Our award-winning marketing initiatives surrounding product launches and customer engagement are helping to drive increased customer visits, broadening our appeal for food-on-the-go at all times of the day.”
Like-for-like sales in company-managed shops were up 10.5%, moderately slower than the 11.1% unveiled for the first 19 weeks of the year at May’s AGM.
Despite the stellar performance, there was no upgrade to full-year expectations because the company said it will now reinvest in strategic areas.
Mr Whiteside added: “Given the strength of our year to date and the outlook, we have decided to increase investment in strategic initiatives in the second half of the year to help to deliver an even stronger customer proposition and further growth in the years ahead. Our expectations for underlying profits for the year as a whole remain unchanged.”
The investments will focus on improved service in shops and online, as well as better availability of hot food options.
Greggs said a “disorderly exit” from the European Union would have a negative impact on the business, including the supply chain and consumer demand. The company has already said it will stockpile key ingredients and equipment ahead of Brexit in case of disruption.
The company is also facing higher input costs, in part due to African Swine Fever in China, which has pushed pork prices higher.
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Mr Whiteside said breakfast-on-the-go remains the fastest-growing element of the trading day – and sales of its Fairtrade coffee now place it third in the 海角视频 out-of-home coffee market, behind Costa and McDonalds, pushing Starbucks into fourth place.
Its click and collect pilot has also been extended to seven cities and it has extended a trial of delivery options to include Just Eat alongside an existing partnership with Deliveroo.
Shareholders, meanwhile, will also get to celebrate in Greggs’ good fortune as it has served up a £35m windfall in the form of special dividend of 35p per share.