Demand for its breakfast deals and new range of lower calorie sandwiches have helped high street chain Greggs (GRG) post another strong set of results.
Sales in the six months to 4 July climbed 6.4% to £398m, with like for likes growing further – up 5.9% compared with a rise of 3.2% in the first half a year ago.
Pre-tax profits at the baker and food-to-go specialist rose by almost £9m in the period, from £16.9m in 2014 to £25.6m.
The group now expects its full-year growth to be ahead of its previous forecasts.
Greggs also returned to net shop growth, opening 44 new sites and closing just 30, giving the company 1,664 outlets at the period end. It also refitted another 118 shops and converted 12 into its café format.
CEO Roger Whiteside, the architect of Greggs turnaround, said the strong first half with good growth in sales reflected improvements in the products and was a reaction to the shop investment programme.
“Our offer of great tasting food-on-the-go is being well received by the consumer in market conditions that have remained favourable. In particular we have seen significant growth in breakfast sales as well as from the extension of our ‘Balanced Choice’ range of sandwiches and flatbreads.
“With the shop refurbishment programme continuing to progress well and new additions to the product range including pizza slices, we are confident of delivering a year of good growth slightly ahead of our previous expectations.”
Shares in Greggs soared once again by 5.2% on opening and are now trading at 1,246p, adding another £60m to its market cap (up to £1.26bn) and putting the stock up a mammoth 70% since the start of 2015.
Tate & Lyle (TATE) also released a trading statement covering the three months to the end of June. The uneventful first quarter update said the trading performance was in line with expectations and guidance for the full year remained unchanged. It added that speciality food ingredients made an “encouraging start” to the year and performed ahead of the comparative period, with Splenda sucralose performing solidly. Bulk ingredients, excluding commodities (ethanol and co-products), performed “steadily” and slightly ahead of the comparative period, supported by solid sweetener demand. However, this was “more than offset” by the impact of commodities, including the continuation of low US ethanol margins. “Overall, before the impact of exchange rate movements and the final timing of the completion of the Eaststarch transaction, expectations for the group’s full-year performance remain unchanged from our guidance in May.
Shares in Tate jumped 3.4% to 528.5p on news that the group was steadying the ship.
Lucky Strike owner British American Tobacco (BATS) has reported a “good performance in a tough environment” in its first half. Revenues in the six months to 30 June were up 2.4% to £6.96bn at constant rates of exchange, driven by good pricing, with adjusted group profit from operations ahead of the prior year by 1.3% at £2.7bn. However, the group was hit by adverse exchange rate movements, putting sales back 5.9% compared to a year ago at £6.4bn. BAT added that adjusted group profit would have also been “significantly higher” after adjusting for the effect of transactional foreign exchange. At current rates of exchange, adjusted profit from operations fell by 6%. Chairman Richard Burrows said: “As we anticipated, the first half of the year has been impacted by adverse exchange rate movements and a strong first-half volume comparator. The underlying performance of the business remains strong and we are confident that we are on course to deliver an improved second half, leading to another year of good earnings growth at constant rates of exchange.”
Shares in the group opened 2.8% higher at 3,652.5p.
Yesterday in the City
Tesco (TSCO) and Morrisons (MRW) both featured in the top five fallers on the FTSE 100 today following the latest market share data from Kantar Worldpanel. Morrisons was the best performer among the big four retailers, but sales still fell back 0.1%, with Tesco down 0.6% for the 12 weeks to 19 July. Their shares finished the day down 1.2% to 179.3p and 0.9% to 212.5p respectively.
Sainsbury’s (SBRY) share price also closed 0.3% down to 259.2p despite reclaiming its spot as Britain’s second biggest grocer from Asda.
Sandwich maker Greencore (GNC) was one of the blue-chip index’s big winners on Tuesday, with its stock rising 0.9% to 315.6p after a strong set of quarter three figures showed its UK food-to-go business continued to grow.
Majestic Wine (MJW) also made gains of 2.8% to 434p after it announced it was launching Naked Wines click & collect service across the UK after a successful trial. The stock is up more than 13% since the £70m acquisition of Naked back in April.
Elsewhere it was also a good day for McColl’s (MCLS), up 1.3% to 160p after its first-half results, Fever-Tree (FEVR), up 2.5% to 378.8p, which continued to see its value balloon following more growth at home and abroad, and Greggs (GRG), up 1.4% to 1,184p, ahead of today’s interim results.
Diageo (DGE), which has had a tough time on the stock market since news emerged of an investigation by the SEC into its distribution practices in the US, closed the day down 0.1% to 1,817p. The drinks group had been up for the majority of the day after it announced it had sold its stake in a South African and Namibian JV with Heinken and Ohlthaver & List.
The FTSE 100 itself ended a five-day run of falling values to close 0.8% higher (or 50.2 points) to 6,555.3 points.