Greggs enjoys shares surge after autumn sales boost

SHARES in Greggs soared after the bakery chain, which has 15 stores in Northern Ireland, upped its full-year profit outlook thanks to a rise in sales following strong autumn trading.

The group, which has more than 1,900 shops across the UK, saw like-for-like sales growth strengthen to 4.5% in the eight weeks to November 24. It is due to open its 16th Northern Ireland store in Omagh’s Showgrounds Retail Park.

Shares in the firm, led by chief executive Roger Whiteside (right), surged 12%, having jumped as much as 17% at one stage, after it said it now expects full-year underlying pre-tax profits of at least £86m.

This compares with £81.8m in 2017.

Greggs said: “This stronger trading in October and November is particularly encouraging as it builds on good comparative sales in the same period last year.

“Operational costs have been well controlled and, while there is still much to play for over the final few weeks of the year, the board now anticipate that full-year underlying profit before tax (excluding exceptional charges) will be at least £86m.” The rise in sales growth marks a pick up from 3.2% growth seen in the third quarter to September 29 and a steady improvement since the first half, when sales edged 1.5% higher.

The recent better trading means yearto-date like-for-like sales are now 2.5% higher and total sales are 6.6% ahead.

In contrast to many of its high street rivals, Greggs has been opening shops nationwide over the past year, although it has trimmed its expansion plans.

It opened 93 new stores in the first nine months of this year, including 35 franchised outlets largely at transport locations, while closing 35 shops.

The group plans to open 100 new stores over the year, having recently pegged back its expectations from a previous target for 130 new shops. Jonathan Pritchard, an analyst at Peel Hunt, said: “Greggs has enjoyed a stellar start to its fourth quarter, even if footfall passing its stores has been under a cloud.

“The company’s Christmas range has landed well but management is keen to emphasise the results of its work on reducing queues; conversion of potential customers has risen and is at the heart of the strong like-forlike sales.”