Bakery retailer Greggs Plc (GRG.L) reported Tuesday lower profit in its first half, despite higher revenues. Looking ahead, the company said the conditions for consumers are likely to remain challenging in the second half. The UK-based company also lifted its dividend.
The company's first-half pre-tax profit was 16.52 million pounds. This is in comparison to last year's reported pre-tax profit of 24.72 million pounds and adjusted pre-tax profit of 17.30 million pounds. Earnings per share were 12.3 pence, lower than last year's 18.1 pence.
The company noted that its tight control of costs and the added contribution from wholesale partially mitigated the profit impact.
Total Group sales in the 26 weeks ended June 30 increased 4.5 percent to 349.67 million pounds from last year's 334.70 million pounds. The company attributed the growth to good performance from its new shop opening program and strong growth in wholesale volumes.
This was despite that the market remained challenging and was particularly impacted by the record levels of rainfall in the second quarter with UK High Street footfall down over 7 percent.
Greggs said it was not immune to this and like-for-like sales fell 3.5 percent in the second quarter and 2.3 percent in the first half overall.
"We continue to make strong progress towards our strategic goals and remain confident in our ability to deliver long term profitable growth for the benefit of shareholders, employees and the wider community," said Chief Executive Kennedy McMeikan.
Further, the Board has declared an interim dividend of 6.0 pence per share, an increase of 3.4 percent from last year.
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