Sales at Greggs have topped £1 billion for the first time – and the firm predicted even better times after the launch of its vegan sausage roll helped drive a surge in customer numbers.
The bakery chain posted a 15% rise in pre-tax profits to £82.6 million in 2018, with sales rising 7.2% to just over £1 billion. Company-managed shop like-for-like sales were up 2.9% in the period.
Greggs said that while the first half of 2018 was impacted by extreme weather, it was able to bounce back and perform ahead of expectations.
For 2019, Greggs hailed the “enthusiastic reception” and “extraordinary” level of media coverage surrounding its vegan sausage roll.
Chief executive Roger Whiteside said: “Whilst there are significant uncertainties in the months ahead, Greggs has started 2019 in great form, helped in part by the publicity surrounding the launch of our vegan-friendly sausage roll.
“We hope to continue benefiting from this strong momentum during the first half of 2019 before facing stronger comparatives later in the year. We have a strong financial position which we plan to use to invest in Greggs’ potential for further growth, whilst also delivering good returns for shareholders.”
January’s news that Greggs was to sell a vegan-friendly sausage roll drew a flurry of responses online, including comments from Good Morning Britain TV host Piers Morgan and comedian Ricky Gervais. Its popularity has already led to Greggs lifting its 2019 profit outlook.
Arlene Ewing, investment manager at Brewin Dolphin Scotland, said: “What a difference a year has made for Greggs. Around this time in 2018, the Beast from the East hit the UK, which led the company to declare weaker profits and sparked a sell-off from investors.
“Since then, Greggs’ shares have been on a roll – more or less doubling in value from July 2018. In today’s results, sales increased 7.2% and pre-tax profit is up to £82.6 million, with strong cash generation and a special dividend in the offing.
“There’s a lot to like about Greggs – it’s a publicity machine, recession-proof, and has a knack for adapting to consumer habits. There could be more good news to come after a strong start to 2019, buoyed by the Piers Morgan-maligned vegan sausage roll.”
In 2018, Greggs opened 149 new shops, including 62 franchise units, and closed 50, growing the estate to 1,953 shops. There are now have 262 franchised shops, predominantly in travel locations and the company-managed estate into a number of high-profile transport hubs including Glasgow Buchanan bus terminal, Birmingham New Street station, and East Midlands airport. In London, the company opened in Westminster underground, Cannon Street and London Bridge stations.