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Greggs grows without borrowing - strong profits ploughed back into the business
In it's H1 results today, Greggs, the Tyneside bakery concern, said it was on track to add 50 - 60 net new shops this year to an estate which now totals 1437 properties. Some of the new outlets are in the usual local shopping parades as you would expect, but almost half are in industrial estates, business parks and transport hubs.
Greggs has responded to the tighter market with meal-deal promotions and introduced breakfast rolls in February - bacon or sausage in a fresh, Greggs-baked roll - and have now sold 4.5 million, helping to grow sales in the traditionally quieter early morning period. This helped lift sales 2.9% to £321 million (LFL sales 0.7% up).
Greggs have improved margins by 0.5% to 5.7% from last year so that pre-tax profit increased 12.3% to £18.6 million.The new bakery in Newcastle upon Tyne is now in production and will replace the old Gosforth bakery progressively.
Total capital expenditure during the first half was £12.4 million (2009: £10.4 million), reflecting the increased rate of shop openings and refurbishments and these will gather pace in H2. Alongside this Greggs will be conducting the first phase of investment in it's supply chain to support the growth in shop numbers, by a further 600+ units. Greggs total capital expenditure for the year will be £45-50 million (2009: £30.3 million), which will be financed from their strong cash flow.
Greggs has responded to the tighter market with meal-deal promotions and introduced breakfast rolls in February - bacon or sausage in a fresh, Greggs-baked roll - and have now sold 4.5 million, helping to grow sales in the traditionally quieter early morning period. This helped lift sales 2.9% to £321 million (LFL sales 0.7% up).
Greggs have improved margins by 0.5% to 5.7% from last year so that pre-tax profit increased 12.3% to £18.6 million.The new bakery in Newcastle upon Tyne is now in production and will replace the old Gosforth bakery progressively.
Total capital expenditure during the first half was £12.4 million (2009: £10.4 million), reflecting the increased rate of shop openings and refurbishments and these will gather pace in H2. Alongside this Greggs will be conducting the first phase of investment in it's supply chain to support the growth in shop numbers, by a further 600+ units. Greggs total capital expenditure for the year will be £45-50 million (2009: £30.3 million), which will be financed from their strong cash flow.
Tue, 10th Aug 2010