--ADDS SHARE PRICE & BROKER COMMENT---
Is Greggs (LON:GRG) back on a roll? The financials certainly seem to suggest this is the case for the Newcastle-based baker, which has 1,650 sandwich shops around the UK.
The implementation of the company’s turnaround, Greggs calls it a strategic plan, resulted in a 5.5% rise in full-year sales to £804mln.
However, the impact was most keenly felt at the bottom line, where cost reductions and the closure non-performing stores led to a 41% rise in profits (excluding exceptionals) to a record £58.3mln.
Indicative of the mood of the company was the decision to increase dividend by 13% to 22p a share, which means the stock yields around 2.5%.
Greggs was also confident enough in prospects to restart its share buyback programme – albeit at the modest rate of £10mln in the first half of the current year.
The shares, up 85% in the last year, advanced 58p to 928p in afternoon trade, valuing Greggs at £940mln.
“Whilst no longer in value territory, we firmly feel the self-help and improving earnings quality thesis has further to run, supported by an improving disposable income outlook,” said City broker N+1 Singer.