Final Results

Greggs PLC
9 March 2001



                                                                  9 March 2001




                                   GREGGS plc
                               PRELIMINARY RESULTS
                       FOR THE YEAR ENDED 30 DECEMBER 2000

Greggs is the UK's leading retailer specialising in sandwiches, savouries and
other bakery products, with a particular focus on takeaway food and catering.
It has over 1,100 retail outlets throughout the UK, trading primarily under
the Greggs and Bakers Oven brands.  These results represent the group's ninth
consecutive year of profit, earnings and dividend growth.



*           Record pre-tax profit of £26.4 million - up 22.5 per cent



*           Sales up 9.8 per cent to £339.0 million - core volume growth of
            4.2 per cent



*           Adjusted earnings per share up 20.1 per cent to 162.3 pence -
            basic EPS up 37.0 per cent



*           Dividends increased 22.2 per cent to 55.0 pence per share



*           Benefits of past investment coming through as planned



*           Continued strong growth in takeaway sandwiches and savouries



*           Excellent progress by London divisions - first Greggs shop in City
            opened



*           Positive consumer response to new Greggs shop design



*           New £2 million group technical centre at Newcastle upon Tyne
            commissioned



*           Increased investment for future growth in 2001



*           Expansion to more than 1,700 shops planned over the next ten years



'Trading in 2001 started relatively slowly, primarily because of the pattern
of New Year shop opening, but has gained momentum in the subsequent weeks. 
Overall, I expect another year of good progress.'
                                                      - Ian Gregg, Chairman



ENQUIRIES:

Greggs plc           Mike Darrington, Managing Director
                     Malcolm Simpson, Financial Director
                     Tel:  [phone] on Friday, 9 March only, 
                     0191 281 7721 thereafter

Hudson Sandler       Keith Hann
                     Tel:   [phone]



                             CHAIRMAN'S STATEMENT



I am pleased to report a year of excellent progress, as we began to realise
the benefits of major past investments in our brands, shops, bakeries,
products and people.  A substantial profit improvement was driven by continued
strong core volume growth, particularly in takeaway food, aided by favourable
trading conditions throughout the year.



Results


Sales grew by 9.8 per cent to £339.0 million, including like-for-like growth
of 6.8 per cent.  The weather was better than average for our business across
the year as a whole.  The second half also benefited from a helpful pattern of
shop opening in the final two weeks, compared with longer closure periods in
1999 when Christmas and New Year fell at weekends and there was an additional
Millennium bank holiday.  Operating profit increased by 20.1 per cent to £26.0
million, including a property profit of £52,000, and pre-tax profit rose by
22.5 per cent to £26.4 million.



Following the final agreement of several years' tax computations with the
Inland Revenue, the group tax charge reflects the release of over-provisions
relating to these earlier years.  This has resulted in an effective tax rate
which is substantially below normal at 16.0 per cent. This reduction in the
effective tax rate has contributed to the increase in basic earnings per share
which grew by 37.0 per cent to 185.1 pence.  In order to provide a more
accurate guide to underlying performance we have also calculated an adjusted
earnings per share, excluding this prior year tax credit, and this has
increased by 20.1 per cent to 162.3 pence.



Dividend



The Board recommends an increased final dividend of 39.0 pence per share
(1999: 31.5 pence). Together with the interim dividend of 16.0 pence per share
paid in October, this makes a total dividend for the year of 55.0 pence (1999:
45.0 pence), an increase of 22.2 per cent.  This reflects our long-standing
commitment to a progressive dividend policy that provides shareholders with an
increasing income, broadly in line with the underlying growth of earnings per
share over the medium term.



Subject to the approval of the Annual General Meeting, the final dividend will
be paid on 25 May 2001 to shareholders on the register at 20 April 2001.



Business highlights



The undoubted highlight of 2000 was the continued strength of core volume
growth, which averaged 4.2 per cent over the year as a whole.  This was again
driven primarily by the success of our takeaway food ranges of sandwiches and
savouries.  It is particularly pleasing to see the Greggs brand achieving
greater consumer recognition in the South, with both our London-based
divisions now making valuable contributions to group profits.  The Managing
Director comments on trading and business development in more detail in his
report on pages 5 - 9.



The Board



Over the past two years, the Board has been reviewing what changes are
required to its composition to ensure that it is appropriate to the future
needs of the business and that it satisfies the increasing requirements of
corporate governance and independence.



As a result of this review, Susan Johnson was appointed a non-executive
director in May 2000.  This is an opportunity to congratulate Susan on her OBE
in June 2000 for services to New Deal in the North East.



At the AGM in May this year, my brother Colin will retire after 35 years'
service to the Company.  I would like to put on record my appreciation for the
part he has played in helping to develop the business from its humble
beginnings in Gosforth to an important national company - and for his
commitment and unflagging enthusiasm.



No further changes are planned in the immediate future.  I intend to continue
in my current role for the time being, but a search has been started to
identify a suitable successor.



Staff



The success of the group is in itself a tribute to the hard work of our 14,700
staff in meeting our customers' requirements for good food and excellent
service.  On behalf of the Board and our shareholders, I would like to add my
own thanks for their contributions to our continued progress.



Prospects



Trading in 2001 started relatively slowly, primarily because of the pattern of
New Year shop opening, but has gained momentum in the subsequent weeks. The
current year will see a substantial increase in capital expenditure across the
group, as we increase the rate of net shop openings, roll out the new Greggs
shop format and develop additional manufacturing capacity to support our
growth.  This investment will not contribute to profits in the short term, but
is vital to the achievement of our vision of the future for the group.
Overall, I expect another year of good progress.



                                                           Ian Gregg, Chairman



                       MANAGING DIRECTOR'S REPORT



We enjoyed a very successful year in 2000 as our established strategy
delivered its planned benefits.   Our results were also boosted by our
decision to restrain capital expenditure until we could be sure of achieving
the optimum returns.  We are now ready to embark on a further phase of
investment designed to take us towards our goal as Europe's finest
bakery-related retail business.



Strategic development



We have maintained our focus on the continuous improvement of our products,
service, shops, brands and people.



Product and service excellence.  The highlight of the year in our drive for
product excellence was the opening in April of our £2 million group technical
centre at Balliol Park, Newcastle upon Tyne.  This invaluable research and
development facility gives us much greater scope for the creation and testing
of even more enjoyable products, and for establishing best practice standards
across the group.  It will also help us to reduce costs in all our production
processes, maximise product safety, experiment with new technologies and
develop the most convenient shop layouts for customers and staff alike.  This
project is a good example of our long term approach to the development of the
business, incurring revenue costs now that will deliver substantial benefits
in the future.



Our central savouries unit at Balliol Park progressed well, with its products
proving extremely successful in all parts of the business where they have been
introduced.  The quality and consistency of its output has contributed to the
strength of our core volume growth, and I am sure that we will derive
increasing benefits from this highly efficient production unit in the years
ahead.  Since growth in savouries has exceeded our expectations, we will be
investing in additional manufacturing capacity in the near future.



Retail environment.  The eye-catching new Greggs shop format has been very
well received by our customers, who appreciate the improved display and
accessibility of our core takeaway food ranges and the livelier, faster-moving
shopping experience it offers.  We have progressively engineered down the cost
of implementing the new design, and it is now being rolled out across the
business as part of our normal shop refurbishment cycle.  The new Greggs
touch-screen electronic point of sale system is currently being appraised and
will be installed in some 300 shops by the end of 2001.  This investment is
being supported by the implementation of a new business intelligence system,
which will deliver improved information to senior managers.



We have further refined and developed the new Bakers Oven seated catering
format, and have continued our controlled roll-out of the concept in new
locations and in stores scheduled for refurbishment.  There were 29 such
openings during 2000, giving us a total of 87 new format catering outlets at
the year end.



Brand awareness.  The adoption of the Greggs brand in our Yorkshire and
Midlands divisions, which was completed in 1999, has proved increasingly
successful and contributed to a good performance in both businesses this year.
The brand was supported by television advertising in both regions, with
positive results, and further campaigns were also undertaken in the North East
and Scotland.  The flagship Bakers Oven outlet at the Millennium Dome
fulfilled all our marketing objectives, exposing the brand to around 800,000
customers in the course of the year and eliciting very positive feedback.



People.  The business has benefited from the progressive strengthening of both
central and divisional management, which has enhanced our ability to
understand and respond to our customers' needs.  Recruitment continued during
the year, and in January 2001 we appointed a new group development director,
whose responsibilities will include the investigation of new market
opportunities for the group.



Trading performance



We made good sales progress throughout the year, with group turnover
increasing by 9.8 per cent to £339.0 million.  As the Chairman has noted, the
weather over the year as a whole was better than average for our business, and
the overall pattern of retail trading was also positive.  We suffered no
perceptible damage from the autumn fuel crisis, and finally we benefited from
the most favourable possible pattern of Christmas opening, which minimised the
numbers of trading days lost as a result of bank holiday closures.  This
contrasted sharply with the pattern in 1999, and contributed to an improvement
in like-for-like sales from 6.0 per cent in the first half to 7.5 per cent in
the second, making an increase of 6.8 per cent for the year as a whole.



Core volumes grew by 3.4 per cent in the first half and 4.8 per cent in the
second, giving an increase of 4.2 per cent for the year.  Product upgrades
were again the main reason that total like-for-like sales advanced even more
strongly than core volumes.



The strong sales performance, improved efficiencies and a benign raw material
pricing climate all contributed to the 22.5 per cent increase in group pre-tax
profit to £26.4 million.



Greggs.  Core volumes in the nine Greggs divisions, including Birketts, grew
by 5.3 per cent over the year, and total like-for-like sales increased by 7.9
per cent.  Both our London divisions, based in Enfield and Twickenham, made
excellent progress.  We were particularly pleased to open our first shop in
the City of London during the year; this unit, in Eastcheap, is trading
strongly and we are working hard to find suitable additional sites for the
brand in central London.  Greggs of the Midlands also produced an outstanding
result, following its successful re-branding, while Greggs of Scotland
maintained its long record of excellent performance.



Bakers Oven.  Core volumes in the four Bakers Oven divisions increased by 1.4
per cent, and total like-for-like sales by 3.9 per cent.  The slower progress
of the catering market, compared with the very buoyant takeaway food sector,
partly accounts for the different rates of core volume growth under our two
fascias.  Profits advanced, helped by a significant contribution from our
outlet at the Millennium Dome, although this had been conceived essentially as
a brand promotion exercise.  Towards the end of the year we made a number of
changes to the senior management of Bakers Oven to strengthen the business.



Product profile



The main drivers of our continued core volume growth were again the major
takeaway food categories of sandwiches and savouries, which once more
increased their share of our total sales. Cakes and confectionery products
maintained a fairly stable share of our trade, with the long-term decline in '
at home' consumption balanced by the growth of takeaway snack purchases.  The
proportion of our business attributable to bread and rolls continued to
decline.


Retail profile



We opened 47 new shops during the year and closed 26, giving us a net increase
of 21 to 1,105 outlets at the year end.  These comprised 858 Greggs and 247
Bakers Oven shops, compared with 825 and 259 respectively in 1999.  We
completed 59 comprehensive shop refurbishments and 19 minor refits during the
year.



Capital investment



Capital expenditure was some £2 million below our original budget at £21.4
million, compared with £22.4 million in the previous year.  This principally
reflected a slightly slower rate of new store openings than we had originally
planned.  It has always been our policy to restrain capital expenditure until
we are sure of obtaining the best possible returns, but we now believe that it
is right to increase the pace of investment and expansion.  Plans are
therefore in place for capital expenditure of some £30 million in 2001.  This
will include some 65 new store openings (a net addition of 35 after planned
closures) and 110 refurbishments, as well as investment to raise standards
across the group and to provide additional manufacturing capacity.



Cash flow and balance sheet



The group continued to generate a strong cash flow and we ended the year with
a substantially increased net cash position of £18.9 million, compared with £
8.9 million at the end of 1999.  Our strong balance sheet provides the ideal
platform for our ambitious investment programme, which we intend to fund
entirely from our own resources.



Employees



We are a customer-focused business and the vast majority of our employees are
in direct contact with those customers every day.  Nothing is more important
to our success than ensuring that all our staff achieve high standards,
whether in the preparation and handling of food or in individual customer ;
service.  We also seek to promote a culture in which everyone can enjoy what
they do.  We have again increased our investment in staff training at all
levels across the group, including the establishment of new senior management
development centres.



Standards



We remain strongly supportive of high standards.  In the year 2000, we applied
resource to the detailed implementation of the Turnbull Report's
recommendations.



We intend to change emphasis in the current year and devote increased
resources to the development of a group environmental policy that will bring
together and extend the policies already in place at divisional level.  This
will help us to ensure fulfilment of our long-standing commitment to high
standards of environmental responsibility in all our operations.



Outlook



The takeaway food markets in which we specialise are growing strongly, and
there is considerable scope to increase our brand presence in many parts of
the UK.  We therefore intend to increase the pace of net shop openings in 2001
and subsequent years, with the aim of expanding the business from 1,105 to
over 1,700 units during the next ten years.  Based on our site finding
analyses, we believe that there is potential for at least 2,000 Greggs and
Bakers Oven shops within the UK.  In addition, we intend within the next few
years to explore the potential for our brands in mainland Europe.



                                            Mike Darrington, Managing Director




Group Profit and Loss Account
for the 52 weeks ended 30 December 2000
                                                               2000       1999
                                                              £'000      £'000

Turnover                                                    339,008    308,678
Cost of sales                                              (131,197)  (123,535)

Gross Profit                                                207,811    185,143
Distribution and selling costs                             (158,327)  (143,211)
Administrative expenses                                     (23,440)   (20,241)

Operating profit                                             26,044     21,691
Net interest receivable / (payable) and other income /
(similar charges)                                              312       (171)

Profit on ordinary activities before taxation                26,356     21,520
Taxation on profit on ordinary activities                    (4,225)    (5,602)


Profit on ordinary activities after taxation                 22,131     15,918
Dividends paid and proposed                                  (6,422)    (5,327)


Retained profit for the financial year                       15,709     10,591


Adjusted earnings per share                                  162.3p     135.1p
Basic earnings per share                                     185.1p     135.1p
Diluted earnings per share                                   183.7p     134.2p




The Group's operating profit for both the current and preceding financial
period derives from continuing operations.  There are no recognised gains or
losses during the current and previous period other than the profit for the
period.



Reconciliation of movement in consolidated shareholders' funds


                                                              2000        1999
                                                             £'000       £'000

Profit on ordinary activities after taxation                22,131      15,918
Dividends                                                   (6,422)     (5,327)

Retained profit for the financial year                      15,709      10,591
New share capital
                - nominal value                                  9          13
                - share premium                                407         707

Net addition to shareholders' funds                         16,125      11,311
Opening shareholders' funds                                 80,896      69,585

Closing shareholders' funds                                 97,021      80,896




Group Balance Sheet
at 30 December 2000


                                          30 December                1 January
                                                  2000                    2000
                                                 £'000                   £'000
Fixed assets

Tangible assets                                113,285                 108,786
Investments                                      3,563                   1,430
                                               116,848                 110,216

Current assets

Stocks                             5,636                    5,983
Debtors                           11,893                    9,751
Cash at bank and in hand          20,015                    8,892
                                  37,544                   24,626

Creditors: amounts
 falling due within one year     (55,227)                 (49,755)

Net current liabilities                        (17,683)                (25,129)

Total assets less current
 liabilities                                    99,165                  85,087

Creditors: amounts falling
 due after more than one year                     (133)                 (2,180)

Provision for liabilities and
 charges

Deferred taxation                               (2,011)                 (2,011)
                                                97,021                  80,896

Capital and reserves


Called up share capital                          2,397                   2,388
Share premium account                            9,558                   9,151
Profit and loss account                         85,066                  69,357


Equity shareholders' funds                      97,021                  80,896





Group Cash Flow Statement
for the 52 weeks ended 30 December 2000


                                                     2000              1999
                                           £'000    £'000    £'000    £'000

Net cash inflow from continuing
 operating activities                              43,431            34,526

Returns on investments and servicing of finance
Interest received                            622               267
Interest paid                               (301)             (425)
Interest element of finance lease
 payments                                     (9)              (13)

Net cash inflow / (outflow) from
 returns on investments and
  servicing of finance                                 312             (171)
Taxation paid                                      (5,604)           (6,668)

Capital expenditure and financial investments
Purchase of tangible fixed assets        (21,397)          (22,403)
Disposal of tangible fixed assets          2,514               974
(Purchase) / sale of investments          (2,133)               56

Net cash outflow for capital
 expenditure and financial investments            (21,016)          (21,373)

Equity dividends paid                              (5,593)           (4,949)

Financing
Issue of ordinary share capital              416               720
Redemption of loan notes                     (32)              (36)
Capital element of finance lease             (40)             (102)
payments
Loan repayments                           (1,913)           (1,789)
Government grants received                    22                 -

Net cash outflow from financing                    (1,547)           (1,207)


Net increase in cash in the period                  9,983               158





Reconciliation of operating profit to net cash inflow from operating
activities


                                                         2000             1999
                                               £'000    £'000   £'000    £'000

Operating profit                                       26,044           21,691
Depreciation charges                                   14,162           13,035
Loss / (profit) on disposal of fixed assets               222              (83)
Release of government grants                              (46)             (25)

Decrease / (increase) in stocks                  347             (103)
(Increase) / decrease in debtors              (2,142)             176
Increase / (decrease) in creditors             4,844             (165)

Net increase / (decrease) in working capital            3,049              (92)

Net cash inflow from continuing operating
 activities                                            43,431           34,526



NOTE:


The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 December 2000 or 1 January 2000.
Statutory accounts for 1999 have been delivered to the Registrar of Companies,
whereas those for 2000 will be delivered following the Company's Annual
General Meeting.  The auditors have reported on those accounts; their reports
were unqualified and did not contain a statement under Section 237(2) or (4)
of the Companies Act 1985.