Pasty maker Greggs announced a strong finish to the year and said its final results will be slightly ahead of previous expectations in a trading update today.
Total sales were up seven per cent for the year ended 31 December, while company-managed shop like-for-like sales were up 4.2 per cent.
Greggs' share price was up 3.8 per cent to 1,039p in early trading hours.
Fourth-quarter company-managed shop sales grew 6.4 per cent like for like after a healthy Christmas period.
Throughout the year, 145 new shops were opened and 79 were closed for a total of 1,764 shops trading as of 31 December. 208 shops were converted in 2016 to Greggs' "bakery food-on-the-go" format", and refurbishments are expected to continue at a similar rate in the year ahead.
Why its interesting
This represents Greggs' 13th consecutive quarter of like-for-like sales growth. Despite the industry-wide cost pressures the bakery will face in the year ahead, Greggs remains confident it will make strong progress in the medium term.
The business is working to transform its brand to fit modern healthier and higher quality food trends, and it's working.
Profits were flat in the first half of the year, but a strong Christmas period helped the baker make up lost ground.
What Greggs said
Chief executive Roger Whiteside said:
In the year ahead, whilst we will undoubtedly see a number of well-documented industry headwinds, we are confident we will continue to make progress with the implementation of our strategic plan, including significant investment in our capability to supply a growing shop estate.
The pasty shop ended 2016 on a strong note and is well placed to face next year's headwinds.