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High street baker Greggs has fought off input price pressures to deliver a 12% rise in underlying pre-tax profit to £49 million.

The company has passed on higher energy and food costs to customers by raising its selling prices. But it remains to be seen how long it can sustain this strategy. Greegs warned that it was still facing 'substantial pressure' from the cost of energy and key ingredients, including flour, vegetable oils and meat.

Trading has picked up since the start of 2008, with like-for-like sales in the ten weeks to 8 March rising 6.2%. Last year, same-store sales increased by 5.3%.

Greggs said it has already seen benefits from the introduction of recent changes including longer opening hours during the week and an expansion in Sunday openings.

The search has begun for a successor to managing director Sir Michael Darrington, aged 66, who has led the company for 24 years. He helped to bring Greggs onto the stock market in 1984 and was knighted in 2004 for services to business and the North East community.

Shares in Greggs advanced by 4% to £43.86 in trading on Tuesday morning.