Sir Michael said sales growth should continue

After the summer heatwave affected sales in the first six months, Greggs returned to form in the second half of 2003, reporting a 2.2% increase.

This was fuelled by a 3.5% rise in sales over the festive period.

Managing director Sir Michael Darrington said the figures for the six months to 27 December, reflected a "gradually improving trend".

Analysts now expect Greggs to post annual pre-tax profits of �38.6m when it publishes its yearly results on 5 March, an improvement of �2m on the year before.

The Newcastle-based firm now operates 1,229 stores across the UK and two in Belgium.