Greggs H1 sales hit £546m but Brexit worries weigh

Newcastle-based bakery and “food-on-the-go” retailer Greggs said on Tuesday its first half sales rose 14.7% to £546 million and underlying pre-tax profit rose to £40.6 million from £25.7 million as the same stage last year.

Interim dividend per share will be up 11.2% to 11.9p and a special dividend of 35p per share was declared.

However, Greggs warned that Brexit negotiations will continue to “present significant uncertainties in the months ahead” with the potential impact that a disorderly exit might have on supply chains, tariffs, exchange rates and consumer demand.

Greggs added: “As disclosed at the time of our preliminary results in March, we are building stocks of key ingredients and equipment that could be affected by disruption to the flow of goods into the UK.”

Greggs said it enjoyed “exceptionally strong trading built on the successful end to 2018, and helped by the popularity of the new vegan-friendly sausage roll.”

In its outlook, Greggs said: “Current trading remains strong, although we continue to expect that the rate of like-for-like growth will begin to normalise as we face stronger comparative numbers in the second half of the year …

“The negotiation of the UK’s exit terms from the European Union continues to present significant uncertainties in the months ahead, with the potential impact that a disorderly exit might have on supply chains, tariffs, exchange rates and consumer demand. 

“As disclosed at the time of our preliminary results in March, we are building stocks of key ingredients and equipment that could be affected by disruption to the flow of goods into the UK.

“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. 

“These additional investments will offset the higher returns from our ongoing strong momentum, and therefore we maintain our previous expectations for underlying profits for the year as a whole …”

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