Greggs on a roll as sales top £1 billion in 2018

Sales at Greggs have topped £1 billion for the first time as the bakery chain recovered from a shaky start to deliver strong full-year results.

Greggs hailed the 'enthusiastic reception' to its vegan sausage roll as it lifted profit guidance for 2019. Picture: Greggs/PA Wire

Greggs posted a 15 per cent rise in pre-tax profits to £82.6m for the year to 29 December, with revenues rising 7.2 per cent to just over £1bn.

Company-managed shop like-for-like sales were up 2.9 per cent in the period.

Greggs said that although the first half of 2018 was impacted by extreme weather, it was able to bounce back and perform ahead of expectations, spurred on by the growth of healthier options, hot drinks, breakfast and hot food.

The chain has already lifted its profit guidance for the current year following its launch of its controversial vegan sausage roll which has helped drive a surge in customer numbers

Greggs hailed the “enthusiastic reception” and “extraordinary” level of social and general media coverage surrounding the new product.

Chief executive Roger Whiteside paid homage to the impact of the roll alongside the firm’s full-year results, saying: “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.”

January’s news that Greggs was to sell a vegan-friendly sausage roll drew a flurry of responses online, including comments from Good Morning Britain TV host Piers Morgan and comedian Ricky Gervais.

Greggs sells 1.5 million sausage rolls a week but created the new option due to public demand after an online petition by Peta, calling for a vegan version, was signed by more than 20,000 people last year.

Arlene Ewing, investment manager at Brewin Dolphin Scotland, said: “What a difference a year has made for Greggs. Around this time in 2018 the Beast from the East hit the UK, which led the company to declare weaker profits and sparked a sell-off from investors.

“Since then, Greggs’ shares have been on a roll – more or less doubling in value from July 2018. There’s a lot to like about Greggs – it’s a publicity machine, recession-proof, and has a knack for adapting to consumer habits. There could be more good news to come after a strong start to 2019, buoyed by the Piers Morgan-maligned vegan sausage roll.”