LONDON (ShareCast) - (Sharecast News) - British bakery chain Greggs said it expected to pay a special dividend later this year after profits mushroomed last year and 2019 got off to a flying start.
The FTSE 250 group's tills rolled to a total of £1.02bn in the year ended 29 December, up 7.2% year-on-year, while like-for-like sales grew 2.9% to £876.3m.

Pre-tax profits improved 14.8% to £82.6m, driven by further developments in growth categories such as healthier options, hot drinks, breakfast and hot food and a growing brand reputation amid the huge publicity for its new vegan sausage roll.

With reported basic earnings per share before exceptional items up 11% to 71.1p, Greggs declared a total ordinary dividend per share of 35.7p, up 10.5% year-on-year and said it expects to declare a special dividend with its interim results.

Chief executive Roger Whiteside said: "2018 was a year that tested the resilience of Greggs' business model and demonstrated the benefits of our strategic investment programme.

"The first half was significantly impacted by extreme weather but once this returned to normal our underlying strengths helped us recover the lost ground and deliver results for the year that exceeded our expectations."

Looking forward, Greggs said it had seen a "very strong" start to 2019, with company-managed shop sales up 9.6% on a LFL basis in the seven weeks to 16 February.

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."

Elsewhere, Greggs revealed that non-executive director Allison Kirkby would step down from the group following its AGM on 21 May in order to take over as chief executive officer of Danish telecommunications company TDC and as a non-executive director of BT.

As of 0910 GMT, Greggs shares had dipped 0.058% to 1,809.95p.

Broker Canaccord said the results were "a fraction below our forecasts but growing momentum since summer last year has continued strongly into the new year" with "remarkable" current trading.

Canaccord analysts anticipate a 20p-40p special dividend to be declared alongside interims, 12 months earlier than expected "and we expect a regular stream from now on".

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