Interim Results

Greggs PLC
05 August 2005

                                                                   5 August 2005



                                   GREGGS plc

                                INTERIM RESULTS

                      FOR THE 24 WEEKS ENDED 18 JUNE 2005

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 1,250 retail outlets throughout the UK, trading under the Greggs and
Bakers Oven brands.

•         Record interim pre-tax profit of £15.6 million - up 15.1 per cent

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

•         Earnings per share (diluted) up 14.9 per cent to 87.1 pence

•         Interim dividend increased 20.0 per cent to 36.0 pence per share

•         Like-for-like sales up 5.2 per cent despite tougher comparatives in
          final weeks

•         Net 25 new shops opened: confident of at least 50 net openings this
          year

•         Net cash balances increased to £69.6 million at end of first half

•         Record £47 million capital expenditure programme proceeding to plan

"As expected, we have achieved a very satisfactory performance in our first
half, despite the effect of increasingly demanding prior year comparatives and
more volatile weather in its final weeks.  Less favourable conditions this year
are reflected in slower like-for-like sales growth of 3.0 per cent in the six
weeks to 30 July.  Improvement in the rate of growth will, in part, depend on
resumption of more typical weather.  Although profits in its first six weeks are
below our budget and the level of last year, we believe that the Group is well
equipped to make further progress in the second half.  Our confidence in the
long term prospects of the business is reflected in our accelerating shop
opening programme and our record capital investment for the future."



                                     - Sir Michael Darrington, Managing Director


ENQUIRIES:
Greggs plc                                              gcg hudson sandler
Sir Michael Darrington, Managing Director               Wendy Baker / James Hill
Malcolm Simpson, Financial Director                     Tel:  [phone]
Tel:     [phone] on Friday, 5 August only         keithhann.communications
         0191 281 7721 thereafter                       Keith Hann
                                                        Tel:  [phone]

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                     MANAGING DIRECTOR'S INTERIM STATEMENT


As expected, we have achieved a very satisfactory performance in our first half,
despite the effect of increasingly demanding prior year comparatives and more
volatile weather in its final weeks.

Results

Sales in the first half (24 weeks) increased by 9.1 per cent to £235.9 million
(2004: £216.2 million), including like-for-like sales growth of 5.2 per cent.
This comprised a 5.8 per cent uplift in weeks 1-19, as already reported at our
AGM, and a slower increase of 2.9 per cent in weeks 20-24.  We had anticipated
that sales growth would slow as we entered a period of more testing
comparatives, and this effect was exaggerated by the onset of very changeable
weather.  Over the first half as a whole, we assess the weather effect on our
business as broadly neutral compared with 2004.

Operating profit increased by 8.7 per cent to £14.2 million (2004: £13.1
million), while pre-tax profit showed a more substantial increase of 15.1 per
cent to £15.6 million (2004: £13.6 million).  This reflected increased interest
receivable of £1.4 million (2004: £0.5 million) on our higher cash balances.
Earnings per share (diluted) rose by 14.9 per cent to 87.1 pence (2004: 75.8
pence).

Adoption of International Financial Reporting Standards ('IFRS')

The profit and earnings previously reported for the first half of 2004, and for
our financial year to 1 January 2005, have been restated following our adoption
of IFRS in place of the UK Generally Accepted Accounting Practices (UK GAAP)
used previously.  The principal effects on our historic accounts arise from
differences in the treatment of defined benefit pension costs, share-based
incentive schemes and the timing of recognition of dividends.  These are
explained in more detail in the separate document referred to in Note 1 on page
9.  We do not anticipate that our earnings for the current year, as prepared
under IFRS, will be materially different from those we would have reported under
UK GAAP.

Dividend

We announced in our last annual report that dividends were likely to increase at
a faster rate than earnings over the next few years, in the light of our
consistently strong cash generation. Our intention is to move dividend cover to
2.5 times over the next year or so.  In the light of this intention and partly
to improve the balance between our interim and final dividends, the Board has
declared an increased interim dividend of 36.0 pence per share (2004: 30.0
pence) which is an increase of 20.0 per cent.   We will consider our final
dividend in the light of our stated intention and our earnings for the year as a
whole.

Trading highlights

We achieved good sales growth across the business during the first half.  Our
like-for-like sales increase included core volume growth of 2.3 per cent, while
selling price inflation rose to 2.9 per cent as we recovered cost increases
particularly in wages, bakery energy and fuel.

Ingredient costs overall were relatively stable, helped by the weakness of the
US dollar, although there are signs that this benefit may reverse in the second
half.  In the final weeks of the period, we began to face comparison with the
period of very strong like-for-like sales growth that began in May 2004 and
continued through the second half of that year.

Greggs brand UK.  The nine Greggs divisions achieved overall like-for-like sales
growth of 5.5 per cent during the first half, comprising a core volume increase
of 2.3 per cent and selling price inflation of 3.2 per cent.  We continued to
benefit from our successful development and marketing of a national brand
identity, and from growth in the takeaway food market.  We have accelerated both
the opening and refitting of shops in the new Greggs format, which is producing
encouraging results.

Our longest-established divisions continued to build on their strong past
performances, with Greggs of Scotland again delivering an outstanding result and
Greggs of the North East also making excellent progress.

Bakers Oven brand.   The four Bakers Oven divisions, with their seated catering
facilities, were more affected than Greggs by the widely reported slowdown of
overall consumer traffic on the high street.  This was reflected in the brand's
lower rate of like-for-like sales growth of 3.9 per cent.  This comprised a core
volume increase of 2.0 per cent and selling price inflation of 1.9 per cent - a
lower rate than at Greggs as we continued our successful initiatives to enhance
the brand's value credentials, particularly in sandwiches.

Greggs Continental Europe.  Our four shops in Belgium are achieving encouraging
like-for-like sales growth from a relatively low base, as we continue our work
to refine and develop our offer.  We expect to open a further 3-4 units in
Belgium over the next 12 months.

Product profile

Once again we achieved our strongest growth in takeaway food, with savouries in
particular making excellent progress.  Sandwiches and sweet lines also performed
well, while the proportion of our sales derived from the traditional bakery
categories of bread and rolls continued to decline.  The 'Lifestyle Choice'
range of healthier-eating sandwiches has been further developed, with a number
of new lines currently being trialled, and we are also continuing to trial
lower-fat variants of savoury lines. We are applying our substantial technical
and product development resources to assist in the reduction of salt and fat in
our products, while providing consumers with the taste and choice they desire.

Retail profile

We opened 30 new shops during the first half and closed 5, giving us a net
addition of 25 outlets to a total of 1,288 at 18 June.  This comprised 1,071
units under the Greggs brand in the UK, a net addition of 26 since the year end;
213 Bakers Ovens, a net reduction of 1; and four Greggs shops in Belgium.  Since
the end of the half we have added a further net 13 shops and are therefore
confident that we will open at least a net 50 over the year as a whole, compared
with our previously stated target of 45.  A total of 18 shops were refitted
during the period, in line with our plans, as we accelerated the roll-out of the
new Greggs shop format.

Investment and finance

Capital expenditure increased to £13.4 million (2004: £11.3 million),
principally as a result of the increased number of shop openings and refits.
Work is well underway on our second central savouries unit at Balliol Park,
Newcastle upon Tyne, where the main structural work has already been completed.
We expect total capital expenditure for the year to be around £47 million,
almost double the level in 2004.

As a result of our strong operating cash flow, net cash on the balance sheet was
substantially higher than in June 2004 at £69.6 million (2004: £46.7 million).
This compared with £62.6 million at our year end on 1 January 2005.

People and the community

We have maintained our focus on attracting and retaining good people by paying
competitive salaries, improving working conditions and doing our utmost to
ensure that work is an enjoyable experience.  During the half year we created an
additional 300 jobs through our continued expansion.  We have long been
committed to encouraging employee share ownership, and I am pleased to report
that our sixth SAYE Share Plan matured successfully during the period, providing
substantial benefits to more than 1,500 staff.

The Greggs Breakfast Clubs have continued to develop successfully and now
operate in more than 100 primary schools.  The scheme involves us working in
partnership with parents and other school volunteers to provide a wholesome free
breakfast to pupils.  We welcome the Government's interest in extending the
provision of facilities at the beginning and end of the school day and believe
that our approach, with its proven results, can make a valuable contribution to
communities in disadvantaged areas.

Outlook

The opening weeks of the second half in 2004 were a period of exceptionally
strong growth, aided by ideal weather.  Less favourable conditions this year are
reflected in slower like-for-like sales growth of 3.0 per cent in the six weeks
to 30 July.  Improvement in the rate of growth will, in part, depend on
resumption of more typical weather.

We have always anticipated that our growth rate in the second half would be
lower than in the first as a result of more demanding sales comparatives.  In
addition, as we have previously noted, we face a substantial increase in shop
energy costs following the end of a long-term supply contract, together with
continuing pressure on wage and fuel costs.

Although profits in its first six weeks are below our budget and the level of
last year, we believe that the Group is well equipped to make further progress
in the second half.  Our confidence in the long term prospects of the business
is reflected in our accelerating shop opening programme and our record capital
investment for the future.

                                                          Sir Michael Darrington
                                                               Managing Director

Consolidated income statement
For the 24 weeks ended 18 June 2005

                                                          24 weeks ended        24 weeks ended           53 weeks ended
                                                            18 June 2005          12 June 2004           1 January 2005
                                                                   £'000                 £'000                    £'000

Revenue                                                         235,868               216,202                  504,186
Cost of sales                                                   (91,130)              (83,467)                (192,860)

Gross profit                                                    144,738               132,735                  311,326

Distribution and selling costs                                 (110,881)             (101,334)                (228,510)
Administrative expenses                                         (19,645)              (18,330)                 (37,053)

Operating profit before financing                                14,212                13,071                   45,763

Finance income                                                    1,474                   667                    2,003
Finance expenses                                                    (73)                 (173)                     (15)

Profit before tax                                                15,613                13,565                   47,751

Income tax                                                       (5,028)               (4,457)                 (15,474)

Profit for the period                                            10,585                 9,108                   32,277

Basic earnings per share                                           87.9p                 76.8p                   270.5p
Diluted earnings per share                                         87.1p                 75.8p                   267.7p



Consolidated statement of recognised income and expense
For the 24 weeks ended 18 June 2005


                                                             24 weeks ended       24 weeks ended         53 weeks ended
                                                               18 June 2005         12 June 2004         1 January 2005
                                                                      £'000                £'000                  £'000

Actuarial losses on defined benefit plans                             (724)                (409)                  (903)
Tax on items taken directly to equity                                  217                  123                    271

Net expense recognised directly in equity                             (507)                (286)                  (632)

Profit for the period                                               10,585                9,108                 32,277

Total recognised income and expense for the period                  10,078                8,822                 31,645


Consolidated balance sheet
As at 18 June 2005


                                                             18 June 2005         12 June 2004           1 January 2005
                                                                    £'000                £'000                    £'000
ASSETS
Non-current assets
Property, plant and equipment                                    166,575              162,716                  163,832
Deferred tax assets                                                4,115                3,577                    3,486

                                                                 170,690              166,293                  167,318
Current assets
Inventory                                                          7,342                6,641                    7,283
Trade and other receivables                                       17,751               14,166                   13,949
Cash and cash equivalents                                         69,619               46,666                   62,601

                                                                  94,712               67,473                   83,833

Total assets                                                     265,402              233,766                  251,151

LIABILITIES
Current liabilities
Trade and other payables                                         (69,596)             (64,711)                 (59,204)
Current tax liabilities                                           (5,780)              (4,343)                  (7,685)

                                                                 (75,376)             (69,054)                 (66,889)
Non-current liabilities
Defined benefit pension liability                                (12,010)             (11,707)                 (11,052)
Other payables                                                      (103)                (110)                    (105)
Deferred tax liability                                           (16,356)             (15,817)                 (15,949)

                                                                 (28,469)             (27,634)                 (27,106)

Total liabilities                                               (103,845)             (96,688)                 (93,995)

Net assets                                                       161,557              137,078                  157,156

EQUITY
Capital and reserves attributable
to equity holders
Issued capital                                                     2,432                2,426                    2,428
Share premium account                                             12,618               11,981                   12,217
Retained earnings                                                146,507              122,671                  142,511

Total equity attributable to                                     161,557              137,078                  157,156
shareholders




Consolidated statement of cash flows
For the 24 weeks ended 18 June 2005

                                                                   24 weeks ended     24 weeks ended     53 weeks ended
                                                                     18 June 2005       12 June 2004     1 January 2005
                                                                            £'000              £'000              £'000

Cash flows from operating activities
Profit for the period                                                     10,585              9,108             32,277
Depreciation                                                               9,584              9,367             21,003
Loss on sale of property, plant and equipment                                238                183                358
Release of government grants                                                  (4)                (4)                (7)
Share based payment expenses                                                 144                 57                124
Finance income                                                            (1,474)              (667)            (2,003)
Finance expenses                                                              73                173                 15
Income tax expense                                                         5,028              4,457              15,474
(Increase)/decrease in inventory                                             (59)               485               (157)
Increase in debtors                                                       (3,807)            (1,129)              (912)
Increase in creditors                                                     10,094               9,797              4,287
Movement in pension liability                                                254                (49)            (1,198)

Cash from operating activities                                            30,656             31,778              69,261
Interest paid                                                                (73)              (173)               (15)
Income tax paid                                                           (6,596)            (6,950)           (14,150)

Net cash inflow from operating activities                                 23,987             24,655             55,096

Cash flows from investing activities
Acquisition of property, plant and equipment                             (13,433)           (11,258)           (25,090)
Proceeds from sale of property, plant and equipment                        1,141                443              1,348
Interest received                                                          1,474                667              2,003

Net cash outflow from investing activities                               (10,818)           (10,148)           (21,739)

Cash flows from financing activities
Proceeds from issue of share capital                                         405                448                686
Sale of own shares                                                         3,517              2,753              3,200
Purchase of own shares                                                    (2,163)              (941)              (941)
Dividends paid                                                            (7,910)            (6,459)           (10,059)

Net cash outflow from financing activities                                (6,151)            (4,199)            (7,114)

Net increase in cash and cash equivalents                                  7,018             10,308             26,243

Cash and cash equivalents at the start                                    62,601             36,358             36,358
of the period

Cash and cash equivalents at the end                                      69,619             46,666             62,601
of the period


Consolidated statement of changes in equity
As at 18 June 2005


                                                              Attributable to equity shareholders
                                            Share capital      Share premium   Retained earnings               Total
                                                    £'000              £'000               £'000               £'000

At 2 January 2005                                  2,428             12,217             142,511             157,156
Shares issued in the period                            4                401                   -                 405
Total recognised income and expense                    -                  -              10,078              10,078
Purchase of own shares                                 -                  -              (2,163)             (2,163)
Sale of own shares                                     -                  -               3,517               3,517
Share based payments                                   -                  -                 144                 144
Equity dividends                                       -                  -              (7,922)             (7,922)
Tax on items taken directly to equity                  -                  -                 342                 342

At 18 June 2005                                    2,432             12,618             146,507             161,557



Notes

1.                  Basis of preparation

EU law (IAS Regulation EC 1606/2002) requires that the next annual consolidated
financial statements of Greggs plc, for the 52 weeks ending 31 December 2005, be
prepared in accordance with International Financial Reporting Standards adopted
for use in the EU ("IFRSs").

Greggs plc adopted IFRSs with effect from 2 January 2005.  Our transition date
is 28 December 2003 being the start date of the earliest period for which we
present full comparative information in our 2005 Annual Report and Accounts.

This interim financial information has been prepared on the basis of the
recognition and measurement requirements of IFRSs in issue that either are
endorsed by the EU and effective (or available for early adoption) at 31
December 2005 or are expected to be endorsed and effective (or available for
early adoption) at 31 December 2005, the Group's first annual reporting date at
which it is required to use adopted IFRSs. Based on these adopted and unadopted
IFRSs, the directors have made assumptions about the accounting policies
expected to be applied when the first annual IFRS financial statements are
prepared for the 52 weeks ending 31 December 2005.



In particular, the directors have assumed that the following IFRS issued by the
International Accounting Standards Board and IFRIC Interpretations issued by the
International Financial Reporting Interpretations Committee will be adopted by
the EU in sufficient time that they will be available for use in the annual IFRS
financial statements for the 52 weeks ending 31 December 2005:



•                     Amendment to IAS 19, Employee Benefits - Actuarial Gains
and Losses, Group Plans and Disclosure




In addition, the adopted IFRSs that will be effective (or available for early
adoption) in the annual financial statements for the 52 weeks ending 31 December
2005 are still subject to change and to additional interpretations and therefore
cannot be determined with certainty.  Accordingly, the accounting policies for
that annual period will be determined finally only when the annual financial
statements are prepared for the 52 weeks ending 31 December 2005.



The preparation of this financial information resulted in changes to the
accounting policies as compared with the most recent annual financial statements
prepared under previous Generally Accepted Accounting Practice (GAAP).  The
revised accounting policies have been applied consistently to all periods
presented in this financial information.



IFRS 1 mandates that most IFRSs are applied fully retrospectively, meaning that
the opening balance sheet at 28 December 2003 is restated as if those accounting
policies had always been applied.  There are certain limited exemptions to this
requirement.



A detailed review of the changes in our accounting policies and reconciliations
of our financial statements from UK GAAP to IFRS at key dates has today been
published to the London Stock Exchange and is available on our website at
www.greggs.plc.uk.



2.                  Accounting policies



The accounting policies that the Group intends to apply for the 52 weeks ending
31 December 2005 are set out in the document referred to in note 1.  The
adoption by the Group of IAS 32 and IAS 39 prospectively from 2 January 2005 has
had no impact on the accounting policies due to the nature of any financial
instruments used.



3.                  Status of financial information



The comparative figures for the 53 weeks ended 1 January 2005 are not the
company's statutory accounts for that financial year.  Those accounts, which
were prepared under UK GAAP, 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 statements under section 237(2) or (3) of the
Companies Act 1985.



The interim information for the 24 weeks ended 18 June 2005 and 12 June 2004 has
not been audited or reviewed by the auditors.  In relation to the financial
statements for the 53 weeks ended 1 January 2005, this has been extracted from a
restatement of the financial information taken from the company's statutory
accounts for that financial year and the auditors have issued a special purpose
audit report on that financial information. This audit report can be found along
with the detailed review referred to in note 1.


4.                  Dividends


The following dividends were declared and paid by the Group:


                                                         24 weeks ended        24 weeks ended            53 weeks ended
                                                           18 June 2005          12 June 2004            1 January 2005

Dividend paid per ordinary share                                  66.0p                 54.5p                     84.5p
(pence per share)
Total dividend paid (£000s)                                       7,922                 6,457                    10,059



For the 24 weeks ended 18 June 2005 a dividend of 36p per ordinary share (24
weeks ended 12 June 2004: 30.0p, 53 weeks ended 1 January 2005: 66.0p) is
proposed amounting to £4,357,000 (24 weeks ended 12 June 2004: £3,640,000, 53
weeks ended 1 January 2005: £7,922,000).

5.                  Defined benefit pension scheme

The valuation of the defined benefit pension scheme for the purposes of IAS19 as
at 1 January 2005 has been updated as at 18 June 2005 and the movements have
been reflected in this interim statement.

6.                  Interim report

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




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