UK baker Greggs forecasts more growth as profit jumps 25 pct

LONDON, March 1 (Reuters) - British baker Greggs (Stuttgart: 41G1.SG - news) on Tuesday met forecasts with a 25 percent rise in full-year profit, hiked its dividend by 30 percent and predicted another year of growth.

The firm also said it would invest 100 million pounds ($139.3 million) in its manufacturing and distribution operations over the next five years.

Roger Whiteside, chief executive of Newcastle, northern England, based Greggs since 2013, is repositioning the firm from a traditional bakery business to focus on Britain's more than 6 billion pound food-on-the-go market, sending its shares up 20 percent over the last year.

It (Other OTC: ITGL - news) now sells sandwiches, sausage rolls and pastries from about 1,700 retail outlets, and sees scope for over 2,000.

It made a profit before tax and one-off items of 73 million pounds in the year to Jan. 2, in line with analysts' average forecast and up from 58.3 million pounds in 2014.

Total (Swiss: FP.SW - news) sales increased 5.2 percent to 835.7 million pounds, with sales at shops open over a year up 4.7 percent.

Greggs highlighted particularly strong sales growth in sandwiches and drinks, including new healthier ranges such as salads and 'no added sugar' drinks. Hot sandwiches, soups and coffee also sold well.

Like-for-like sales growth did, however, slow to 2.3 percent in the fourth quarter, reflecting strong comparative numbers and weaker shopper numbers in some locations.

"This year has started well and the consumer outlook remains positive with disposable incomes expected to grow further in 2016," said Whiteside.

"We are confident of delivering a further year of underlying growth."

Greggs is paying a total dividend of 28.6 pence, up from 22 pence last time. ($1 = 0.7177 pounds) (Reporting by James Davey; editing by Kate Holton)