Shares of Greggs, the Newcastle-based bakery and “food-on-the-go” retailer, rose 6% on Wednesday after it said in a trading update that it expects to deliver underlying profit before tax of at least £88 million, slightly ahead of its previous guidance.
Greggs said that in its 2018 financial year, total sales grew 7.2% and company-managed shop like-for-like sales grew 2.9%.
In the fourth quarter, company-managed shop like-for-like sales grew 5.2%.
“The launch of our new vegan-friendly sausage roll has proved very popular with a broad range of customers, and can now be combined with our vegan-friendly winter vegetable soup in a meal deal for just £2.25,” said Greggs.
“During the year we opened 149 new shops (including 62 franchised units) and closed 50, growing the estate to 1,953 shops trading as at 29 December 2018, 262 of which are franchised shops operated by partners in travel and other convenience locations.
“In the year ahead we expect net shop openings to be in the 90-100 range.”
In its outlook, Greggs said: “Whilst there are many economic and other uncertainties hanging over the consumer environment, we enter the new year with good sales momentum and operational execution, a strong offer and a robust financial position.
“We now expect that we will deliver underlying profit before tax of at least £88 million, slightly ahead of our previous guidance, when we report our preliminary results for 2018 on 7 March 2019.”
Greggs CEO Roger Whiteside said: “We delivered a very strong finish to 2018 despite the well-publicised challenges in the consumer sector.
“This performance was broad-based, reflecting the strength of our range of freshly-prepared food and drinks, and the strategic changes that we have made in recent years to focus more effectively on the food-on-the-go market.
“In the year ahead, we will continue to innovate with products designed to reflect changing consumer tastes, and by opening in new locations that make Greggs even more accessible to customers.
“The investments that we are making in our supply chain will allow us to deliver the outstanding value and quality that Greggs is famous for across a growing shop estate.”