Revenue growth for Greggs as £100m restructuring investment continues

High street bakery chain Greggs PLC has recorded a slight decline in half-year profits despite an uptick in revenues

The Newcastle-headquartered company generated a profit before tax (excluding exceptional items) of £25.9m during the 26 weeks to June 30 2018, down 6.9% from £27.7m the year previous.

But when taking the cost of exceptional items into account – among them, a £100m investment programme to reposition firm’s manufacturing and distribution operations for future growth – Greggs actually made a pre-tax loss of £1.87m during the period.

That figure represents a year-on-year improvement of more than £6.4m; the firm’s pre-tax loss for the same half-year in 2017 was £8.3m

Conversely, Greggs’ revenues for the period rose 5.18%, increasing from £452.9m to £476.3m.

The company is also set to open around 100 net new shops for the year as a whole. As of June 30, it traded from 1,888 stores nationwide.

Greggs chief exec Roger Whiteside said: “Greggs has delivered a resilient performance despite challenging market conditions and we have continued to make good progress with our strategic investment programme to transform the business into the customers’ favourite for food-on-the-go.

“While we remain cautious in respect of the outlook for sales in the balance of the year given the consumer backdrop, we are confident in the medium and long-term growth potential for the business, supported by customers’ response to our initiatives, our strong cash generation and the ongoing strategic investments that we are making.”

He added: “Over the year as a whole we continue to believe that underlying profits (before exceptional costs) are likely to be at a similar level to 2017.”

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