BAKERY chain Greggs expects to report record profits for the 14th consecutive year at its end of year results in March.

Financial director Malcolm Simpson said profits are likely to rise to about £48m, from £46.7m last year.

In a trading update yesterday, the Newcastle company announced a slight trading improvement over the festive period, with sales climbing 5.4 per cent during the five weeks to January 7.

However, it said that extra trading days over Christmas meant that actual progress was negligible.

Sales in the second half of last year were up three per cent, or two per cent when the extra trading days were taken into account.

Greggs said it had experienced a challenging few months with substantial cost pressures generated by a general decrease in the number of people in the high street and rising energy costs.

Financial director Malcolm Simpson said the company had focused on increasing efficiency in its 1,319 UK stores trading under the Greggs and Bakers Oven brands.

He said: "We have concentrated on making many of our shops as effective as possible. We have invested in more automated equipment to increase productivity."