Companies: GRG   

Mega baker Greggs, which trades under the Greggs and Bakers Oven brands, has cooked up its twelfth consecutive year of profits. Turnover for the year to December rose 8% to £457m while pre-tax profits increased 10.4% to £40.5m. Like-for-like sales were up 3.3%. During the period, 68 new shops were opened bringing its total to 1,231. The company was negatively impacted by last year's summer heatwave as well as rising ingredient prices (namely in flour, meat and dairy) but measures were taken to reduce costs elsewhere in the group, which contributed to the 10.8% improvement in operating profits to £39.2m, and like-for-like performance recovered in the final quarter. The company also opened its first two sites in Europe - in Antwerp and Leuven in Belgium - during the period as an experiment to see if its concept can be rolled out throughout the continent. Two more shops are expected to open in Belgium this year. Although chairman Derek Netherton warns that the growth of the sandwich market may be slowing and that the company faces strong competition from new and established operators, like-for-like sales in the first nine weeks of the year were up 3.1%. A dividend of 80p per share has been recommended. The market expects sales in 2004 to reach £485m with pre-tax profits rising slightly to £42m. Hold.