Greggs, the baker and food retailer, on Monday said full-year profits were acutely affected by store closures but added trading had started to pick up after the worst year in “well over a decade”.
High energy costs and the nation’s changing attitude towards food left Greggs rushing to reorganise. It closed 14 poorly performing shops and transferred some of its Bakers Oven fascia to the main Greggs brand at a cost of £3.5m.
Pre-tax profit in 2006 fell 19.8 per cent to £40.2m, a result of weak underlying sales, the restructuring and additional energy costs of £4.5m. Turnover increased by £3.3m to £550.8m.
Like-for-like sales were flat in the first half of the year but improved by 0.9 per cent in the second half. Sir Michael Darrington, managing director, said the improvement had continued this year, with like-for-like sales in the nine weeks to March 3 up 3.9 per cent.
Earnings per share fell from 281.2p to 241.2p. The board is to propose a final dividend of 78p a share, taking the full-year dividend to 116p, 9.4 per cent higher than in 2005.