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Greggs (GRG) has shrugged off worries over high street spending to record a small improvement in full-year pre-tax profits excluding exceptional items, due store expansion and improvements made to product ranges.

Its pre tax profit, excluding exceptional items, of £81.8m for the year ending 30 December 2017 eclipsed the £80.3m that was accumulated in 2016, and is in line with what was envisaged by food and retail analysts.

Operating profits also increased throughout last year, up 4.6% to £81.7m, as total sales jumped 7.4% to £960m. Like for like sales at company managed shops were up 3.7% in the period.

Headline pre-tax profits dropped to £71.9m in 2017 from just above £75m in 2016 due to an exceptional pre-tax charge of £9.9m in the period.

Greggs pinpointed many areas of strategic success as the reasons for posting the positive results, including a focus on hot food and hot drinks.

There was also major growth on the bakers’ “Balanced Choice” range, which accounted for £100m worth of sales.

Roger Whiteside, chief executive for the Newcastle-based company, said: “In 2017 we delivered another strong performance, in challenging economic circumstances as rising inflation impacted both our own costs and customers’ disposable income. At the same time we continued to make good progress with our business transformation programme.”

He added that the chain intended to continue opening more shops despite the challenging consumer environment, opening a net 90 new stores in the period.

The latest results revealed that there is a strong cash generation programme available to support the further growth that is desired.

There are also plans to consolidate manufacturing operations and continue to expand their logistics capacity, and a new shop replenishment system has been rolled out, in addition to pilot schemes for new supply chain solutions.

The baking chain have also been buoyed by an encouraging start to this year, with company managed shops seeing a like for like sales up by 3.2% in the first eight weeks of trading for this year.

Greggs shares are up 0.9% to 1,324p so far this morning.

Morning update

Sausage skin maker Devro (DVO) has released its figures for the first six months of last year, reporting profits that are line with the same period in 2016.

Sales volumes increased by 7%, most notably through markets in China, Sough East Asia and Russia.

There was reported strong operating cash flow which totalled £7.6m, and they have a positive outlook due to global market growth of between 2% and 4%, predicting good opportunities for the company to increase revenue through its manufacturing plants.

CEO Peter Page commented: ”“Our priorities at the start of 2017 included sales growth to regain market share and cost reduction in operations… Growth in demand will continue as the global population increases, consumer spending progresses and tastes become more varied. The business is well positioned for the future.”

So far in the markets this morning, it has been a day of small gains for most consumer goods firms, with the FTSE up 0.1% to 7,295.3pts.

PZ Cussons (PZC) amongst the best performers up by 1.4% to 292.2p, followed by Imperial Brands (IMB) which is up by 0.7% to 2653.5p.

Associated British Foods (ABF) has dropped 0.3%, down to 2717p.

Yesterday in the City

The FTSE 100 was boosted by a global share price rally yesterday, ending the day up 0.6% at 7,289.6pts.

Associated British Foods (ABF) was one of the day’s biggest risers, climbing 3% to 2,723p after its clothing retail chain Primark has put in a strong Christmas and early 2018 performance of 1% like-for-like growth despite an overall 1% drop in the chain’s first half like-for-like sales.

Other large consumer goods companies were also in the black – with Unilever (ULVR), up 2.2% to 3,843.5p, Compass Group (CPG), up 1.8% to 1,552.5p, Reckitt Benckiser (RB), up 1.2% to 5993p and Imperial Brands (IMB), up 1.1% to 2,642p.

Also on the up was Devro (DVO) ahead of its annual results this morning, climbing 2.6% to 201p. Hotel Chocolat (HOTC) and FeverTree (FEVR) raose 2.4% to 315p and 2.3% to 2,589p respectively.

The day’s few fallers included Majestic WINE (WINE), down 1.5% to 437p, B&M European Value Retail (BME), down 0.9% to 421.5p and Dairy Crest (DCG), down 1.1% to 560p.