January 16, 2018 / 8:55 AM / a month ago

UPDATE 1-UK's Greggs sees cost pressures easing in 2018​

* Greggs chalks up 17th quarter of sales growth

* Chain has broadened out from base as bakery

* Expects to open 110-130 new shops this year (Adds detail, shares)

LONDON, Jan 16 (Reuters) - British baker Greggs forecast it would meet profit expectations for 2017 helped by a solid rise in sales over the Christmas quarter and added that industry-wide cost pressures should ease in 2018.

Greggs, which has transformed itself from a traditional bakery business into a broader takeaway food chain, said on Tuesday like-for-like shop sales rose 3 percent in its fourth quarter to Dec. 30, That was a 17th straight quarter of underlying sales growth.

The sales had increased 5 percent in the third quarter but comparative numbers were tougher in the fourth.

Company statements and survey data this month have generally shown Britons cut back on almost everything other than food purchases in the run-up to Christmas.

Greggs, which trades from over 1,850 UK outlets, said its staples such as sausage rolls remained popular, while there was also strong demand for seasonal products such as mince pies.

Shares in Greggs were up 3.2 percent at 1,347 pence at 0845 GMT, valuing the business at 1.3 billion pounds ($1.8 billion).

“Looking forward we expect industry-wide cost pressures to continue in the year ahead, albeit at a lower level than we experienced in 2017,” it said.

Greggs’ profit margins in 2017 were dented by a jump in the price of ingredients, particularly dairy and proteins, as well as increased labour costs.

The firm expects to accelerate shop openings to a net figure of 110-130 in 2018 from a net 90 in 2017 and said 2018 would also be a record year for investment in its supply chain.

Prior to Tuesday’s update analysts were on average forecasting a pretax profit before one-off items of 81.9 million pounds for 2017, according to Reuters data, versus 80.3 million pounds in 2016. ($1 = 0.7252 pounds) (Reporting by James Davey; editing by Kate Holton and Keith Weir)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below