Newcastle-based Greggs said its 2023 pre-tax profit rose 27% to £188.3 million as total sales grew 19.6% to £1.809 billion.

Underlying profit before tax excluding exceptional income was up 13.1% to £167.7 million.

Greggs shares 10% of its profits with staff who have at least six months of service. 

For shareholders, a final dividend of 46 per share will take total ordinary dividend per share to 62p, up 5.1% from 2022.

Greggs will also pay shareholders a special dividend of 40p per share.

Greggs said: “The proposed final dividend and special dividend in respect of 2023 amount to 46.0 pence (£46.6 million) and 40.0 pence (£40.6 million) respectively.”

Greggs shares rose as much as 5%.

In her outlook, Greggs CEO Roisin Currie said: “Greggs has started 2024 well, with like-for-like sales in company-managed shops growing by 8.2% in the first nine weeks. 

“As we have previously reported, inflationary pressures are reducing and we have improved visibility of costs in the coming year.

“There is no change to management’s expectations for 2024, and we are confident that Greggs can deliver another year of good progress as we continue our plans for sustainable growth.”

Currie added: “Reflecting on another year of rapid growth, I am so proud of how our teams have risen to the challenge of serving more customers through more channels.

“Whether in our shops, our manufacturing sites, our distribution network, or in Greggs House, our teams stepped up to make sure that we kept pace with the increased customer demand as we delivered on our strategic growth plan.

 “We are very much on track to deliver our bold five-year growth plan to double sales by 2026 and to have significantly more than 3,000 shops in the UK over the longer term.”

REACTION:

Matt Britzman, equity analyst, Hargreaves Lansdown: “Greggs continues to show why it’s the UK’s leading food-to-go brand (YouGov’s Brand Index).

“This is a business intent on growing, aiming to surpass 3,000 UK shops while enhancing its multi-channel approach for better service.

“Digital channels are booming, with delivery sales up 23.6% last year following partnerships with Just Eat and Uber Eats.

“Greggs is extending hours to capture more of the evening market and bolstering its brand to both deepen loyalty and attract new customers.

“Greggs is far more than just a treat, and its value offering puts it in a sweet spot with consumers still battling higher living costs.

“Maintaining that price point is key, and with cost inflation easing Greggs is making sure customers feel the benefit too.

“That’s likely to be a small drag on sales growth this year compared to last, but there are plenty of other growth avenues to target.

“Investors don’t have to sit and wait while the growth strategy plays out. Greggs already boast a modest 2.6% forward yield and today’s special dividend is further evidence that the board’s keen to pay investors while it expands.”