Greggs (GRG.L) on Wednesday said that full-year profits would come in slightly ahead of expectations and that it would pay employees a £7m ($9m) bonus after a “strong finish” to what it called an “exceptional” year for the company.
Total sales climbed by 13.5% in 2019, meaning that growth almost doubled last year, Greggs said in a trading update.
Greggs said the bumper growth was driven by strong demand across its traditional product range and the “huge popularity” of its vegan sausage roll.
The £7m payment to the company’s more than 20,000 employees will be made at the end of January “in recognition of their crucial contribution to business success”, Greggs said.
Thousands of employees are in line for a £300 one-off payment, and the company also paid a special dividend of £35m to shareholders in October 2019.
Full-year underlying before-tax profits, even after the employee bonus, will come in “slightly higher” than the company’s previous guidance, the company said. It will release its full-year accounts for 2019 on 3 March.
“We delivered a strong finish to what has been an exceptional year for Greggs,” said CEO Roger Whiteside.
“The major investments we have made in recent years to make Greggs an attractive choice in the food-on-the-go market are delivering. Consumers are responding very positively and we have seen increasing visits from both new and existing customers.”
Some 138 new Greggs stores were opened in 2019, while 41 were closed, meaning that it now has more than 2,050 in the UK.
Greggs pointed to an increase in costs related to the national living wage and the continued climb in pork prices as two headwinds that it would have to contend with in 2020.
But it said that it saw “clear opportunities for further growth”, and said it expected to extend trading hours at more stores and to make its delivery service more widely available.
“As we enter the new year, we have added to our vegan-friendly menu with the launch of our 'Vegan Steak Bake' and our first vegan doughnut. In the year ahead we will continue to evolve our range to suit a broad variety of dietary choices,” the company said.