Pre-tax profit at Greggs for the full year to the start of January jumped 41 per cent to £58.3m on sales of £804m, a rise of 5.5 per cent, as market conditions improved.
The baker, which has 1,650 stores across the UK, said like-for-like store sales grew 4.5 per cent in comparison to a 0.8 per cent decline in 2013.
Its total dividend payment for the year comes in at 22 pence per share, up 12.8 per cent from the previous year.
In the first half of 2015 the firm "has the capacity to return up to £10m to shareholders" by resuming its share buyback programme.
Why it's interesting
Greggs has been swapping pasties and pies for more upmarket coffee and croissants. This strategy to serve "food on the go" now means it's selling coffee to the tune of £1m a week, giving the likes of Starbucks a run for their money.
The high street bakery has undergone a makeover which has pleased customers, refitting 213 shops last year. Greggs opened 50 new shops and closed 71.
What Greggs said
"2014 was a year of significant change and an exceptional step up in performance for Greggs as we began to implement our new strategic plan centred on the growing food-on-the-go market. We have improved both our food offer and the shop experience for customers. Market conditions have been more favourable and like-for-like sales have grown throughout the year. This has resulted in record underlying profits for the financial year. Overall we are confident of delivering a further year of good growth and progress against our strategic plan in 2015," said chief executive Roger Whiteside.
Greggs is having its cake and eating it. Investors are in for a tasty treat as the company says it's now in a position to return to a progressive dividend policy.