BAKERY group Greggs has unveiled a huge rise in profits, as well as its ambitious plan to push into Europe.

The business served up record pre-tax profits of £32.7m in the year to December 29, up 24.2 per cent.

It plans to invest £38m in an expansion drive, opening at least 50 new stores in the UK, as well as one on the Continent.

The Newcastle-based company currently has 1,144 shops and has set itself a goal of operating 1,700 by the end of 2008.

In the past year, it opened 67 shops, but closed 28, giving a net increase of 39. There were 905 Greggs and 239 Bakers Oven shops at the end of the financial year.

Managing director Mike Darrington said there was "ultimate scope" for about 2,000 in the UK, while expansion in Europe would be limited to two or three over the next 18 months.

But Mr Darrington added that the group's main focus would remain in the UK, where it plans to break through the £1bn-a-year turnover barrier by 2010, from its Greggs and Bakers Oven brands.

Turnover last year soared to £377.6m, up 11.4 per cent on the previous year with like-for-like growth, which excludes new stores, of 8.4 per cent.

Greggs said strong demand for takeaway food fuelled the growth.

Sales increased as the year progressed with good weather and the high number of customers on the UK's high streets.

The group's 240 Bakers Oven cafe-style outlets achieved a like-for-like sales rise of 3.8 per cent and made "a small profit", Mr Darrington said.

That compared with like-for-like growth of 10.1 per cent in the core Greggs brand, with Scotland remaining the most profitable division.

Mr Darrington said: "We will continue to look to improve the product range. If people enjoy the product they will come back."

Commenting on the results and prospects for the group, Mr Darrington added: "We have achieved further strong sales progress since the start of the new year and results to date are in line with budgets, and ahead of comparable levels last year.

"We are well-positioned in a growing market place and, despite continuing cost pressures, I expect the group to achieve satisfactory progress in the current year."

Shareholders will receive a total dividend of 65p, up 18.2 per cent.