MIDAS SHARE TIPS UPDATE: Greggs shares have risen sixfold in ten years - but you can still tuck into them as they're really on a roll!

Updated: 06:20 EDT, 5 August 2019

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In 1939, John Gregg began delivering fresh eggs and yeast to families in Newcastle.

Ten years later, he opened the first Greggs store, selling bread and pastries in Gosforth, just north of the city centre.

What would the original Mr Gregg have made of vegan sausage rolls, launched by Greggs at the beginning of this year and credited with giving the business a whole new lease of life?

Tasty prospects: Greggs shares have risen more than sixfold in ten years and the company is growing strongly

Despite the fanfare, vegan sausage rolls account for a tiny fraction of Greggs' total sales and pale into insignificance compared to the group's perennial bestseller, the pork variety, more than two million of which are sold every week.

But the vegan buzz has certainly encouraged more people to venture into a Greggs outlet, even if they have not visited one for years. When they do, most are pleasantly surprised, as the chain has been transformed under chief executive Roger Whiteside.

Shops are brighter, cleaner and more spacious. Service is faster and the range has been expanded to include more sandwiches and healthy options such as salads and fruit pots.

The strategy helped Greggs to report a 10.5 per cent increase in like-for-like sales, a 58 per cent surge in underlying profits to £40.6million and an 11.2 per cent rise in the dividend to 11.9p for the six months to June 29.

The figures would turn most competitors green with envy and a special dividend of 35p was declared too, an added bonus for shareholders.

Midas recommended Greggs in 2009 when the shares were the equivalent of £3.65. Last week, they closed at £21.90 so they have risen exactly sixfold.

Much of the growth has come in the past six years, under Whiteside, who has not just made the stores more inviting but opened more of them too.

Today, there are almost 2,000 outlets and plans to grow to 2,500 over the next five years, including sites in airports, stations and drive-throughs on busy roads.

The group is looking at longer opening hours too, hoping that customers might pop in for supper on the way home from work, just as many now stop off for breakfast in the morning.

Greggs is even going digital. Experiments with click-and-collect, Just Eat deliveries and a loyalty app are under way and Whiteside is confident that the Greggs of tomorrow will be a truly multi-channel business, including promotions tailored to customers' likes and dislikes.

Midas verdict: At £21.90, Greggs shares have come a long way in the past decade but the stock should continue to do well. Greggs is vulnerable to rising costs, as sterling weakens, but customers spend less than £3 on average per visit so the group is more resilient than many to slowing economic growth.

Greggs generates plenty of cash too so the dividend is well protected and special payouts are likely to continue in the future. Existing investors should keep hold of their shares. New investors could also find value in this stock.