Greggs PLC on Tuesday said it raised its dividend as it posted stronger revenue for the first half of the year, though profit declined on higher costs.

In the 26 weeks to July 1, revenue expanded 14% to £960.6 million from £844.0 million, the Newcastle, England-based bakery chain said. Pretax profit, however, slipped 7.4% to £74.1 million from £80.0 million.

Distribution and selling costs were 14% higher on-year at £465.4 million from £408.0 million, the sausage roll maker said. Cost of sales increased 12% to £369.7 million from £329.7 million, while administration costs came in 22% higher at £49.7 million from £40.9 million.

Further, the company had reported £16.3 million in other income during the first half of financial 2023, and this did not repeat this time.

Greggs raised its interim dividend 19% to 19.0 pence per share from 16.0p.

The company highlighted that its over-ice drinks range was proving successful and is now available in 500 shops, with 200 more shops to offer the range over the year.

‘Greggs has made good progress in the first half of the year, further broadening our range of on-the-go food and drink whilst making it more accessible to more customers. Our success is founded on the exceptional value that Greggs offers to customers looking for food and drink on-the-go and the fast and friendly service delivered by our colleagues,’ Chief Executive Officer Roisin Currie said.

‘Our cost outlook for 2024 remains unchanged and we continue to trade in line with our plan. The board remains confident in the long-term growth strategy, and we are investing to support that growth,’ she added.

Greggs shares rose 4.4% to 3,066.00 pence each on Tuesday morning in London.

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