London, May 10 - Britain's biggest bakery chain, Greggs, said on Wednesday profits in the year to date were materially below last year's due to high energy costs.
"Costs have increased as we expected, with the rise in energy costs making a particularly strong impact on the first half," Chairman Derek Netherton said at the group's annual general meeting.
"As a result, profits to date remain materially below the level of last year," he added.
Like-for-like sales in the 18 weeks to May 6, 2006 were flat, continuing the trend already reported, said Greggs, which runs 1,300 UK shops, selling sandwiches and pastries.
Greggs shares fell 1.2 percent to 3,660 pence by 1112 GMT, valuing the group at around 437 million pounds ($815 million).
In March, Greggs warned of flat sales and said this year's profit would be eroded by high power costs.
Analysts said at the time that sales had probably suffered from stronger competition on the shopping streets from shops such as Tesco Plc's Tesco Express and J. Sainsbury Plc's Sainsbury's Local.
Greggs said on Wednesday the recent flat sales compared to a period of very strong growth last year, when like-for-like sales in the first 19 weeks increased by 5.8 percent.
"For the rest of the year, we expect to see benefits from the actions we are taking to reduce costs and from a number of initiatives to drive turnover growth," Netherton said.