LONDON (Reuters) - British bakery operator Greggs GRG.L said it will pay staff a special bonus after what the CEO described as a "phenomenal" year that included the launch of a vegan-friendly sausage roll and higher-than-expected profits.
Greggs, present in more than 2,000 stores in Britain, recently also launched a vegan version of its steak bake as more and more Britons try to cut down on meat and dairy. [nL8N2971KG]
The company said it would spend 7 million pounds ($9.2 million) on a one-off payment for its 25,000 employees, giving around 19,000 of its longest-serving staff about 300 pounds each.
CEO Roger Whiteside called 2019 “phenomenal” and said Greggs, which already shares 10% of annual profits with staff, was making an extra payout for the first time.
“This is all about the front line getting 300 pounds in their pocket as a thank you at the end of January for their help in delivering what has been an exceptional year,” he said.
Underlying store sales grew 9.2% over the 12 months to 28 December, as it attracted new customers for products including a vegan donut and vegan soups.
In a sign of the fanfare attached to vegan launches, earlier in January, dozens of people were pictured queuing at midnight at a Greggs branch in northern England to be the first to try the vegan steak bake.
“They’re flying off the shelves,” Whiteside said of the steak bake, which is made with meat substitute Quorn.
Annual pretax profit would be “slightly higher” than expectations, it said.
Analysts expect Greggs to post a 24% jump in pretax profit to 111.6 million pounds for 2019, Refinitiv data shows.
Whiteside said there would be headwinds in 2020 however as wage costs and the price of pork both rise.
Shares in Greggs, up 70% in the last year, were down 2% in early trade before moving into positive territory, standing up 0.7% at 0957 GMT.
Future growth would come from more shops at airports, drive-throughs and by expanding its home-delivery business, he said.
Whiteside, a former Marks & Spencer and Ocado executive, has overseen a 405% share price rise since he took over in 2013.
Greggs was founded in 1939 when John Gregg, who had started off delivering eggs and yeast by bicycle, set up a shop.
($1 = 0.7610 pounds)
Reporting by Sarah Young, editing by Paul Sandle
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