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UPDATE 1-Greggs profits rise as Britons seek value
March 14, 2012 / 7:43 AM / 6 years ago

UPDATE 1-Greggs profits rise as Britons seek value

* 2011 pretax profit 53.1 mln stg, up 1.1 pct

* Dividend 19.3 pence, up 6 pct

* 1st 10 weeks of new year like-for-like sales down 1.8 pct

* Expects progress in 2012

LONDON, March 14 (Reuters) - Greggs, Britain’s largest food-on-the-go retailer, posted a small rise in year profit as its value offer struck a chord with consumers and said although the new year had got off to a slow start it expects a boost to trade from summer events.

“While we expect 2012 to be another year of significant challenge for UK consumers we believe that we are well placed to deliver further progress,” the firm said on Wednesday.

Greggs said it planned to make the most of summer events including celebrations to mark Queen Elizabeth II’s Diamond Jubilee, the London Olympics and the Euro 2012 football championships.

Newcastle, north east England-based Greggs, which sells bread, sandwiches, savouries, cakes and pastries to over 6 million customers a week, said its pretax profit rose 1.1 percent to 53.1 million pounds ($83.6 million) in 2011, in line with market expectations.

Total sales rose 5.8 percent to 701 million pounds, reflecting 84 net new store openings and product innovation.

Sales at stores open over a year increased 1.4 percent but were down 1.8 percent in the first 10 weeks of its new financial year, particularly reflecting two weeks of severe weather in January.

The firm plans a net 90 new shop openings in 2012, creating up to 800 new jobs.

Many British retailers are struggling as consumers grapple with inflation, muted wage growth, government austerity measures, worries about job security, a stagnant housing market and the impact of the euro zone debt crisis.

Greggs, with its relatively low average transaction value of just over 2 pounds, has fared better than most.

With about 1,550 stores currently, Greggs has more outlets in the UK than McDonald’s and is targeting over 2,000.

Greggs is paying a dividend of 19.3 pence, up 6 percent -- a 27th consecutive year of dividend growth.

Shares in the firm, which have increased by 11 percent over the last three months, closed Tuesday at 555 pence, valuing the business at 561 million pounds.

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