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LONDON (Reuters) - British baker Greggs said it was encouraged by improving sales since the start of the year as it capped a tough 2013 with a 19 percent slump in annual profit.

The firm, which has close to 1,700 shops in Britain, said on Wednesday pretax profit before exceptional items for the year to December 28 fell to 41.3 million pounds ($68.90 million), in line with expectations, after a year in which trading was hit by competition and bad weather, as well as the cost of changes to the group's strategy.

Greggs said early in 2013 that it planned to return to growth via its core "food-on-the-go" business - selling sandwiches and hot pasties - and abandoned a previous strategy to build cafes and supply third parties.

Total sales for the year grew by 3.8 percent but were down 0.8 percent at its stores open for more than a year.

Greggs said it expected market conditions in 2014 to remain challenging but added that it had been encouraged by recent trading, with like-for-like sales in the first eight weeks to February 22 up 2.1 percent.

Shares in Greggs closed Tuesday at 530 pence, up 30 percent on six months ago, valuing the business at almost 536 million pounds. ($1 = 0.5994 British pounds)

(Reporting by Neil Maidment)