Greggs Regulatory News (GRG)

18 Dec 2006 07:01

Greggs PLC18 December 2006 18 December 2006 GREGGS plc BOARD APPOINTMENT AND TRADING UPDATE Greggs is the UK's leading retailer specialising in sandwiches, savouries andother bakery products, with a particular focus on takeaway food and catering. Ithas over 1,300 retail outlets throughout the UK, trading under the Greggs andBakers Oven brands. Over the last five years, we have been putting increasing emphasis on developingGreggs as a national brand. Following a strategic review of the business, theBoard of Greggs has decided to speed up this development by changing itsdevolved divisional management structure. As a consequence, the Board iscreating the new position of Retail Director to drive the development of astronger, more unified and customer-focused Greggs brand throughout the UK.Raymond Reynolds, 47, has been appointed to this role and will join the Board asan Executive Director with effect from 18 December 2006. The Board believes thatthis will enable the brand to be even more responsive to customers' needs inwhat has become an increasingly fast-moving and competitive market place. A key objective will be enhancing the Greggs brand's traditional position in themass market by meeting consumers' growing demand for more aspirational products,while retaining its established emphasis on high quality and great value. Greggswill also continue to expand and develop the successful Healthier Optionsproduct range, and undertake a number of innovative trials of trading hours andformats which have been under development in recent months. These developments will be supported by a significant increase in research andmarketing to ensure that we fully understand and address the needs of Greggs'customers, and to increase consumer awareness through effective advertising. Weexpect this to be self-funding. Although we would not normally provide further comment on trading until afterour year end, the Board feels that it is appropriate to take this opportunity toupdate shareholders. Since our Autumn trading statement on 3 November,like-for-like sales have increased by 2.0 per cent in the six weeks to 9December, compared with the 0.2 per cent increase already reported for the first19 weeks of the second half to 28 October, and a flat performance in the firsthalf. Although the weather has not been consistently helpful, we have benefitedfrom progressively easier sales comparatives with the prior year. Whilst we arepleased by the emergence of this more positive sales trend, it has come somewhatlater than we had hoped. This delay will have only a marginal effect on theoutturn for the year. We still intend to give our usual trading update on 12January 2007. The rationalisation and integration of Bakers Oven in the North and Scotland isprogressing on schedule and is being generally well received by our customers.We now believe that total closure costs will exceed our initial estimate of £2.5million by £1.25 million, with the increase being largely property-related. Therestructuring is expected to enhance annual profits from 2007 by at least the£1.25 million per annum originally estimated. In addition, contracts have beenexchanged, subject to planning permission, for the sale of the Carricks bakerysite in Newcastle, formerly the headquarters of Bakers Oven North, and aproperty profit of over £2 million from this transaction is expected to be shownin our 2007 accounts. Sir Michael Darrington commented: "By focusing on the development and marketingof a unified national brand, we aim to make the whole Greggs business moreresponsive, increasing our ability to meet new competitive challenges bydelivering to our customers exactly what they want, when they want it. I amdelighted to welcome Raymond to the Board as the new national champion of theGreggs brand. He has proved his management abilities over two successful decadeswith the Group, and I am sure he is the ideal person to lead this exciting newphase of the brand's growth." Raymond Reynolds joined Greggs in sales management in 1986. During the later1990s he built a significant new business for Greggs in the Edinburgh region,and in 2002 he was appointed managing director of Greggs of Scotland, theGroup's most successful division. The managing directors of all eight Greggsdivisions in the UK will in future report through Raymond as Retail Director,and he will report to the Group Managing Director Sir Michael Darrington. Greggs plc confirms that it has been advised by Raymond Reynolds that there isnothing further to disclose in relation to Rule 9.6.13 of the Listing Rules. ENQUIRIES:Greggs plc Hudson SandlerSir Michael Darrington, Managing Director Michael SandlerRichard Hutton, Finance Director Tel: 020 7796 4133Tel: 0191 281 7721 This information is provided by RNS The company news service from the London Stock Exchange