Domino’s Pizza Group: Preliminary Results H1/2015

Milton Keynes / UK. (dp) Domino´s Pizza Group PLC, a leading pizza delivery company with stores in the United Kingdom, Republic of Ireland, Germany and Switzerland, announces its results for the 26 weeks ended 28 June 2015. Highlights:

• UK market continues to underpin growth with another half of double-digit LFL sales
• Successful new opening store programme
  • 21 (2014: eight) stores opened in the period
  • System sales per store almost twelve percent ahead
• Continued success of digital investment programmes in the UK
  • e-commerce system sales ahead by 24.4 percent
  • App based sales represents the largest distribution channel driving 51.6 percent of online sales
• Significant increase in franchisee profitability
  • Ebitda performance up from 12.9 percent to 15.1 percent
• Improving performances in international businesses
  • Economic recovery and operational improvements in ROI
  • Losses in Germany narrowed from 4.7 million GBP to 1.8 million GBP
  • New corporate stores opened in Switzerland
• Group underlying operating profit and EPS up by 30 percent
• Strong cash flow and cash conversion – net cash of 19.2 million GBP

Commenting on the results, Chief Executive Officer David Wild, said: «We have had a strong first half, driven by an excellent performance in our core UK business, which has again recorded double digit like-for-like sales growth. Our international operations have also shown improvements compared to last year».

«Our success in the UK is a result of the investment we have made in market-leading e-commerce initiatives. Our App has now been downloaded over ten million times and our App sales have overtaken desktop sales for the first time».

«The 21 new stores opened in the period are performing better than ever. Our roll out is well supported by our franchisees, who are benefiting from increased profitability and are seeing a good reaction from the UK consumer to our bundle deals and other initiatives».

«Whilst we are pleased with our performance in the first half, we face tougher comparators in the rest of the year. We have a continued programme of e-commerce initiatives and other marketing campaigns. The UK new store pipeline is solid and we are well-positioned for the future».

Domino’s Pizza in Germany

The Group has seen some improvement in the performance of our German operations. At the period end, the Group had 21 stores (29 June 2014: 26) of which twelve were corporate stores (29 June 2014: 13). System sales for the period were 5.6 million EUR, which represents a decline of 1.7 percent on a constant currency basis. Like-for-like sales were, however, ahead by three percent in local currency.

Underlying operating losses in the period were reduced to 1.8 million GBP from 4.7 million GBP. At the 2014 period end, a review of receivables was undertaken relating to amounts due from Franchisees. As a result of this review, a charge of 2.3 million GBP was included in the prior period operating loss. At constant exchange rates, reported underlying losses in the current period would have been 0.2 million GBP lower.

The Group has continued to focus its efforts on local store economics, rationalising local store marketing, delivery area radius and labour costs in its corporate stores. This has driven both the increase in like-for-like sales, together in part with the reduced operating losses reported above.

Looking forward into the second half of the year, there remains much to do, but the first half of the year demonstrates some stemming of the losses in Germany (Imgage Source: Domino’s Pizza Group).