Britain's Greggs raises profit outlook again

LONDON (Reuters) - British baker Greggs upgraded its profit outlook for the third time this year after posting a 51 percent jump in first-half profit that reflected favourable market conditions and well received improvements to its products and shops. Roger Whiteside, chief executive since 2013, has repositioned Greggs to focus on Britain's more than 6 billion pound food-on-the-go market, sending its shares up 149 percent over the last year. Newcastle, northern England, based Greggs sells sandwiches, sausage rolls and pastries from 1,664 retail outlets - more than burger chain McDonald's - and sees scope for over 2,000. It said on Wednesday it made a pretax profit of 25.6 million pounds in the 26 weeks to July 4, up from 16.9 million pounds in the same period last year. Whiteside said he expected pretax profit for the full year to exceed analysts' consensus forecast, which stood at 67 million pounds before Wednesday's update, up from 58.3 million pounds made in 2014. Shares in Greggs were up 3.1 percent at 1,222 pence at 0933 GMT, valuing the business at 1.2 billion pounds. They earlier hit a record high of 1,254 pence. "The valuation multiples are thoroughly merited with the now sustained performance of the group coming through," said Shore Capital analyst Clive Black, who upgraded his 2015 profit forecast to 70.5 million pounds and has a "buy" stance on the stock. Greggs' total sales increased 6.4 percent to 398 million pounds, with sales at shops open over a year up 5.9 percent. Whiteside said Greggs, which has a low average transaction value of 2.70 pounds, was benefiting from rising wages and lower prices. "People are wanting to outsource food preparation and as disposable income rises they do it more," he told Reuters. He highlighted significant growth in breakfast sales as well as from the extension of a range of sandwiches and flatbreads with fewer than 400 calories. Whiteside also noted positive customer reaction to Greggs' shop refurbishment programme that saw 118 refits and 12 cafe conversions. Greggs has also benefited from a celebrity fan base. Last year David Beckham was snapped buying pasties from Greggs, while last week Hollywood actor Jake Gyllenhaal professed his love for Greggs baguettes. The firm, which in April announced a 20 million pound special dividend in light of its strong cash position, said on Wednesday it would pay an ordinary interim dividend of 7.4 pence, up from 6 pence last time. (Reporting by James Davey; editing by Susan Thomas)