Greggs (GRG)


Greggs profit slips

Bakery retailer Greggs reported today that total group sales were up 3.4% to £362m in the half-year to end-June but like-for-like sales fell 2.9%.

Like-for-like own shop sales were down 2.9% resulting in pre-tax profit down £4.6m to £11.4m (2012: £16.0m).

Net cash generated from operating activities was £24.7m (2012: £14.2m).

Dividend per share is held at 6p.

19 net new shops were opened; expect net 20-30 during year as a whole.

Strategy update:

· Priority to return core business to like-for-like growth by focusing on products and services for the 'food on the go' customer

· 'Food on the go' market is £6 billion and growing

· Improve the quality of our existing estate:

- Increased rate of shop relocations

- Accelerated refit programme with one 'Bakery food on the go' shop format

- Limited net shop additions for 2-3 years

· Further growth of franchise operations

· Driving efficiency and capacity from existing supply chain network

· Significant investment in processes and systems

· Building the platform for long term sustainable profit growth

Roger Whiteside, CEO, said: "Greggs is a strong brand that has the ability to grow shareholder value over the long term. Our focus for the future will be on winning in the growing food on the go market. As a consequence we will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth for the benefit of shareholders, employees and the wider community."