Greggs’ Porridge Servings Add to Profit Growth at U.K. Baker

Greggs’ Porridge Servings Add to Profit Growth at U.K. Baker

Management is seeking to move beyond the staple bakery products with which the company is most commonly associated. New additions have included pizza slices. Photographer: Newscast/UIG via Getty Images

Having made its name selling sausage rolls and pasties, U.K. bakery chain Greggs Plc is bringing breakfast on-the-go to British shoppers as it seeks to maintain growth.

New menu choices such as porridge and breakfast sandwiches helped the company report increased first-half profit Wednesday, sending the shares to their highest level ever. A range of healthier options including salads and drinks with no added sugar further enhanced the company’s performance.

“It’s a continuation of the improvement in sales that we’ve seen since the launch of the new strategy that focused the business on food on-the-go that we launched two years ago,” Chief Executive Officer Roger Whiteside said by phone. The result for the year is likely to be “slightly ahead” of the company’s previous expectations, he said.

Maintaining the growth rate has become essential for a company whose shares have almost tripled in two years, boosting its market value to about 1.2 billion pounds ($1.9 billion). To do so, management is seeking to move beyond the staple bakery products with which the company is most commonly associated. Other new additions have included pizza slices.

The shares rose as much as 5.9 percent to a record 1,254 pence in London, and were up 3.2 percent as of 9 a.m.

Pretax profit for the first half increased to 25.6 million pounds from 16.9 million pounds a year earlier, excluding one-time items. Sales rose 6.4 percent to 398 million pounds, also helped by store refits. The company said it refurbished 118 of its 1,700 stores across the U.K.

As well as increasing the first-half dividend by 23 percent to 7.4 pence, Greggs said it will pay a special dividend of 20 pence on July 17.

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