Interim Results

Greggs PLC
06 August 2004


6 August 2004


                                   GREGGS plc
                                INTERIM RESULTS
                      FOR THE 24 WEEKS ENDED 12 JUNE 2004

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 1,200 retail outlets throughout the UK, trading under the Greggs and
Bakers Oven brands.

•   Record interim pre-tax profit of £13.6 million - up 10.6 per cent

•   Building on twelve consecutive years of profit, earnings and dividend growth

•   Diluted earnings per share up 10.1 per cent to 76.1 pence

•   Interim dividend increased to 30.0 pence per share

•   Like-for-like sales up 4.1 per cent

•   On track to add net 30 shops during year: net 11 added in first half

•   Positive consumer response to Greggs brand relaunch

•   Significant improvement in performance at Bakers Oven

•   Net cash balances of £46.7 million at end of first half


"Like-for-like sales in the first seven weeks of the second half (to 31 July)
have increased by 7.4 per cent.  This excellent growth rate reflects comparison
with the period affected by last year's hot summer; we expect progress to
moderate as the second half progresses.  I believe that both our brands are well
positioned to deliver further growth, and we therefore expect to report
satisfactory progress over the year as a whole."

                                     - Sir Michael Darrington, Managing Director


ENQUIRIES:
Greggs plc                                         gcg hudson sandler
Sir Michael Darrington, Managing Director          Jessica Rouleau / James Hill
Malcolm Simpson, Financial Director                Tel:  [phone]
Tel:   [phone] on Friday, 6 August only      keithhann.communications
       0191 281 7721 thereafter                    Keith Hann
                                                   Tel:  [phone]



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                     MANAGING DIRECTOR'S INTERIM STATEMENT

I am pleased to report satisfactory interim results, with an improving trend in
like-for-like sales driving a pre-tax profit increase of 10.6 per cent.  We
benefited from the successful media relaunch of the Greggs brand and a
significant improvement in performance at Bakers Oven, as well as more
favourable weather than in the comparable period last year.


Results

Sales in the first half (24 weeks) increased by 7.5 per cent to £216.2 million
(2003: £201.1 million).  This included a like-for-like sales increase of 4.1 per
cent, comprising a 2.7 per cent improvement in weeks 1 - 12 rising to 5.4 per
cent in weeks 13 - 24.  After a period of poor weather in the early part of the
year, we enjoyed favourable trading conditions in May and June compared with the
onset of unusually high temperatures in 2003.  Our core volumes increased by 2.0
per cent, while selling price inflation of 2.1 per cent reflected our continuing
programme of product upgrades as well as the recovery of cost increases.

Operating profit increased by 10.8 per cent to £13.1 million (2003: £11.8
million).  After interest receivable of £0.5 million, broadly in line with the
comparable period last year, pre-tax profit increased by 10.6 per cent to £13.6
million (2003:  £12.3 million) and diluted earnings per share rose by 10.1 per
cent to 76.1 pence (2003: 69.1 pence).


Dividend

The Board has declared an interim dividend of 30.0 pence per share (2003: 25.5
pence).  This is an increase of 17.6 per cent and is intended to improve the
balance between our interim and final dividend payments.  We remain committed to
providing shareholders with progressive increases in their dividend income
broadly in line with the growth of earnings per share over the medium term.  The
interim dividend will be paid on 1 October 2004 to shareholders on the register
at the close of business on 3 September 2004.


Trading highlights

Although poor weather restrained our progress in the early part of the year, we
derived significant benefits from the cooler conditions in May and June,
compared with the exceptionally hot early summer of 2003.  Ingredient prices
were generally stable, and our long term contracts gave us partial protection
from substantial increases in energy costs.  Staff costs continue to rise, in
order to attract and retain excellent people.

Greggs brand UK.  The nine Greggs divisions achieved overall like-for-like sales
growth of 3.8 per cent during the period, including a core volume increase of
1.4 per cent.  In April we launched an updated brand identity that sought to
re-emphasise our bakery heritage.  This was reflected in point of sale material
and in-shop promotions, and backed by a major media campaign that included TV
advertising in most of our regions, under the slogan 'It's the way we bake it
that makes it'.  The consumer response was encouraging, reflected in an
improving like-for-like sales trend in the latter part of the first half.

We have also progressed our development of the new Greggs shop format, with the
aim of reinforcing our credentials as a baker and softening some aspects of its
takeaway orientation.  Although some work remains to be done to refine the
concept, evaluation of the performance of our latest batch of refits has
encouraged us to accelerate the pace of refurbishment in the second half.

The Yorkshire and South West divisions both performed very well.  Our integrated
South East division also made good progress, following last year's setback,
showing positive trends in both sales and profits.

Bakers Oven brand.   The four Bakers Oven divisions produced a healthy
like-for-like sales increase of 5.0 per cent, including core volume growth of
3.9 per cent, and significantly increased their contribution to Group profit.
This progress followed our initiatives to strengthen the Bakers Oven management
team and enhance the brand's sandwich offer.  The other principal takeaway
category of savouries also made good progress, while seated catering sales were
stable within a highly competitive market place.  We were particularly pleased
by our continued good performance in the South, though Scotland is also making
progress following management action to close a number of underperforming
outlets.

Greggs Continental Europe.  We opened a second shop in Antwerp in March, giving
us a total of three in Belgium.  Like-for-like sales are growing at a good pace
and we plan to add a fourth unit during the second half as we continue our
learning and development process in this market.


Product profile

Takeaway food remained the main driver of growth under both our brands, with
savouries again making the strongest progress.  The rate of growth of our
sandwich sales progressively improved during the half year as we benefited from
the Greggs brand relaunch.  Cakes and confectionery products again saw modest
like-for-like growth, while bread and rolls continued their long term decline as
a proportion of our sales.

We are applying our substantial technical and product development resources to
the reduction of salt and fat in our products, in line with Government
guidelines, and are seeking to widen customer choice through the planned
introduction of lower fat options on a number of our key lines.  Work is also
under way to extend our successful 'Lifestyle Choice' range of healthier eating
sandwiches, wraps and related products.


Retail profile

We opened 25 new shops during the first half and closed 14, giving us a net
addition of 11 outlets to a total of 1,242 at 12 June.  These comprised 1,023
units under the Greggs brand in the UK, a net addition of 16 since the year end;
216 Bakers Ovens, a net reduction of six; and three Greggs shops in Belgium, a
net addition of one.  We remain on track to add a net 30 units over the year as
a whole, in line with our previously announced plans.  We completed 11 shop
refurbishments during the period, reflecting our decision to slow the rate of
Greggs refits as we evaluated our refinements of the new shop format.  The pace
of refit activity will increase during the second half.


Investment and finance

Lower capital expenditure during the first half of £11.3 million (2003: £14.7
million) reflected the relatively small number of shop refits and the absence of
major bakery development projects.  We began work on a £1 million extension of
our Edinburgh facility and are completing a project to expand capacity in Leeds.
Total capital expenditure for the year is now expected to be around £2 million
below our original budget of £34 million.

The relatively modest level of investment, combined with the strength of
operating cash flow, resulted in an increase in our net cash balances to a total
of £46.7 million at the end of the half, compared with £36.4 million in December
2003 and £26.8 million at the end of the first half last year.


People and the community

Our continued focus on putting people first is without doubt a key factor in
building our successful business.  The growth of the group has enabled us to
create 400 new jobs over the last year and has also enabled us to pursue a range
of projects to care for the communities in which we operate.  The Greggs
Breakfast Clubs, which provide a healthy and well-balanced start to the day for
children in disadvantaged areas, have continued to expand successfully.  We
encourage all our people to involve themselves in community activities and our
charity committees support a wide range of good causes around the country.


Outlook

Like-for-like sales in the first seven weeks of the second half (to 31 July)
have increased by 7.4 per cent.  This excellent growth rate reflects comparison
with the period affected by last year's hot summer; we expect progress to
moderate as the second half progresses.  I believe that both our brands are well
positioned to deliver further growth, and we therefore expect to report
satisfactory progress over the year as a whole.  Following last year's pattern,
we intend to provide further updates on our performance in late October and
early January.


                                                          Sir Michael Darrington
                                                               Managing Director



                       GROUP PROFIT AND LOSS ACCOUNT

                    FOR THE 24 WEEKS ENDED 12 JUNE 2004



                                                                  24 weeks to         24 weeks to           52 weeks to
                                                                      12 June             14 June           27 December
                                                                         2004                2003                  2003
                                                                        £'000               £'000                 £'000

TURNOVER                                                             216,202             201,117               456,978
                                                                      _______             _______               _______
OPERATING PROFIT                                                      13,090              11,814                39,167

Net interest receivable                                                  494                 465                 1,305
                                                                      _______             _______               _______
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION                                                       13,584              12,279                40,472

Taxation                                                              (4,442)             (4,015)              (13,235)

                                                                      _______             _______               _______
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION                                                         9,142               8,264                27,237

Dividends                                                             (3,640)             (3,077)               (9,476)

                                                                      _______             _______               _______
RETAINED PROFIT FOR THE PERIOD                                         5,502               5,187                17,761

                                                                      =======             =======               =======
Basic earnings per share                                                77.1p               70.0p                230.5p
Diluted earnings per share                                              76.1p               69.1p                227.6p





GROUP BALANCE SHEET AT 12 JUNE 2004


                                                                           12 June         14 June          27 December
                                                                              2004          2003 *               2003 *
                                                                             £'000           £'000                £'000

FIXED ASSETS
Tangible assets                                                           161,980         154,398              160,704

CURRENT ASSETS
Stocks                                                                      6,641           6,306                7,126
Debtors                                                                    14,166          15,507               13,037
Cash at bank and in hand                                                   46,666          29,467               36,358
                                                                           _______         _______              _______
                                                                           67,473          51,280               56,521


CREDITORS: amounts falling due within one year                            (72,694)        (70,872)             (68,558)

                                                                           _______         _______              _______
NET CURRENT LIABILITIES                                                    (5,221)        (19,592)             (12,037)
                                                                           _______         _______              _______
TOTAL ASSETS LESS CURRENT LIABILITIES                                     156,759         134,806              148,667

CREDITORS: amounts falling due after more
than one year                                                                (110)           (115)                (112)

PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation                                                         (14,737)        (13,904)             (14,405)

                                                                           _______         _______              _______
                                                                           141,912         120,787              134,150
                                                                           =======         =======              =======
CAPITAL AND RESERVES

Called up share capital                                                     2,426           2,413                2,422
Share premium account                                                      11,981          10,758               11,537
Profit and loss account                                                   127,505         107,616              120,191

                                                                          _______         _______              _______
Equity shareholders' funds                                                141,912         120,787              134,150
                                                                          =======         =======              =======

* restated following the introduction of UITF 38



                      SUMMARISED GROUP CASH FLOW STATEMENT

                      FOR THE 24 WEEKS ENDED 12 JUNE 2004


                                                                 24 weeks to          24 weeks to           53 weeks to
                                                                     12 June              14 June           27 December
                                                                        2004               2003 *                2003 *
                                                                       £'000                £'000                 £'000

Operating profit                                                     13,091               11,814                39,167
Depreciation                                                          9,356                8,442                18,985
Loss on disposal of fixed assets                                        183                   63                    69
Release of government grants                                             (4)                  (3)                   (7)

Decrease / (increase) in stocks                                         485                   24                  (796)
Increase in debtors                                                  (1,129)              (3,767)               (1,297)
Increase in creditors                                                 9,797                7,528                  1,601
                                                                      _____                _____                  _____
Net decrease/(increase) in working capital                            9,153                3,785                  (492)
                                                                      _____                _____                  _____
NET CASH INFLOW FROM
CONTINUING OPERATING
ACTIVITIES                                                           31,779               24,101                57,722

Returns on investments and servicing
of finance                                                              494                  465                 1,305

Taxation paid                                                        (6,950)              (5,101)              (10,908)

Capital expenditure and financial
investments                                                         (10,815)             (14,719)              (31,574)

Equity dividends paid                                                (6,459)              (5,772)               (8,807)

Net cash inflow from financing                                        2,259                 (804)                  (15)
                                                                      _____                _____                 _____

Net increase /(decrease) in cash                                     10,308               (1,830)                7,723
                                                                      =====                =====                 =====

NOTES

1.  The unaudited financial information set out above does not constitute
    the Company's statutory accounts for the 24 weeks ended 12 June 2004.

2.  The accounting policies used as a basis for this interim results
    announcement are consistent with the Company's statutory accounts for the 
    52 weeks ended 27 December 2003 except that 2003 figures have been restated
    following the introduction of UITF 38 - "Accounting for ESOP Trusts" with 
    effect from 28 December 2003.

3.  The comparative figures for the 52 weeks ended 27 December 2003 are not the 
    Company's statutory accounts for that financial year.  Those accounts have
    been reported on by the Company's auditors and delivered to the Registrar of
    Companies.  The report of the auditors was unqualified and did not contain a
    statement under Section 237(2) or (4) of the Companies Act 1985.

4.  The interim report is being posted to all shareholders and copies are
    available on application to the Secretary, Greggs plc, Fernwood House, 
    Clayton Road, Jesmond, Newcastle upon Tyne, NE2 1TL.




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