UK's Greggs profit lifted by wider product range, keeps 2024 forecast
First half profit up 16.3%, sales up 13.8%
Maintains expectations for full year profit
Shares up 1.7%; interim dividend raised
Adds CEO quotes paragraphs 5 and 6, share price details in paragraphs 1 and 3
By James Davey
LONDON, July 30 (Reuters) - British fast food retailer Greggs kept its full-year profit outlook on Tuesday as a wider product range, more deliveries and extended store hours lifted first-half profits by 16.3%, and sent shares up 1.7% in morning trading.
Greggs GRG.L, famous for its sausage rolls, steak bakes and vegan alternatives, has proved a resilient performer through a cost-of-living crisis in Britain.
Share price gains on Tuesday bring the stock's advance this year so far to 16.6%, and Greggs boosted its interim dividend by 18.8% to 19 pence.
The Newcastle-based company's underlying profit before tax and exceptional items was 74.1 million pounds ($95.2 million) over the six months to June 29, with total sales up 13.8% and company-managed shop like-for-like sales up 7.4%.
"We are succeeding in a tough market. There is no doubt that the consumer out there is under pressure," CEO Roisin Currie told Reuters.
"Menu evolution remains critical for us in terms of bringing new products" to entice customers, she said, highlighting strong growth from its new over-ice drinks range and pizza deals.
Delivery sales, evening trade and greater use of the Greggs app supported volume growth, or the number of items sold, Currie said.
Evening sales grew ahead of the average like-for-like rate, delivery sales grew to represent 6.7% of company-managed shop sales and the Greggs App was scanned in 18.3% of such transactions.
A net 51 new shops opened in the period, taking the total to 2,524.
In May, Greggs said it was building logistics capacity for a store estate of around 3,500.
Earlier this month, Greggs raised prices for some products, including sausage rolls, by 5 to 10 pence, but has no plans for further rises this year, said Currie.
"Whilst uncertainties remain, the Board's expectations for the full year outcome are unchanged," she said.
($1 = 0.7785 pounds)
Reporting by James Davey; Editing by Kate Holton and Bernadette Baum
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