Greggs PLC: H1/2009 profit drops 29 percent, but …

Newcastle upon Tyne / UK. (gplc) The British bakery retailer Greggs PLC posted a 29 percent drop in first half pre-tax profit because last year was boosted by property sales and windfall payments from its pension scheme, but sales rose as it introduced new products and it said it would press ahead with its store expansion plans.

The Newcastle upon Tyne based company´s first half sales rose four percent to 312 million GBP from 299 million GBP as new products and offers introduced to entice bargain-hungry buyers offset a knock to sales caused by heavy rainfall. Interim Results for the 26 weeks ended 27 June (summary):

• Sales up 4,4 percent to 312 million GBP (2008*: 299 million GBP); like-for-like sales up 1,5 percent
• Operating profit up 8,9 percent to 16,3 million GBP (2008*: 15,0 million GBP)
• Pre-tax profit up 7,3 percent to 16,5 million GBP (2008*: 15,4 million GBP)
• Diluted earnings per share up 8,6 percent to 0,1129 GBP (2008*: 0,1040 GBP)
• Net cash of 14,9 million GBP at end of first half (2008*: net debt 3,6 million GBP)
• Interim dividend increased 6,1 percent to record 0,052 GBP, building on 24 consecutive years of dividend growth

Note: 2008 figures are for the 26 weeks to 28 June 2008, rather than the 24 weeks to 14 June 2008 originally reported, and exclude a 1,0 million GBP one-off property gain and 7,0 million GBP exceptional pension credit.

Derek Netherton, Chairman: «Greggs serves over six million customers per week and, through our continued focus on quality and value for money, we have achieved a robust performance in a challenging market place. We anticipated the pressures that we would face as a result of tough trading conditions and continuing high input cost inflation, and took action to control our costs accordingly. The business has also begun to benefit from the initiatives we are taking to simplify and centralise our operations, in preparation for accelerated expansion. The high street trading environment remains difficult, not helped by the recent wet weather. However, costs continue to be well-managed and the Group´s financial position remains strong. This gives the Board confidence that Greggs is well placed to cope with the continuing challenges in the market place».