Continued growth, record new stores and increased digital participation
Domino’s Pizza Group plc (“DPG” or the “Group”), the leading pizza company in the UK, announces its results for the 26 weeks ended 25 June 2017.
26 Weeks Ended 25 June 2017 |
26 Weeks Ended 26 June 2016 |
Change | |
---|---|---|---|
Group System Sales1 | £546.5m | £494.5m | 10.5% |
UK & ROI System Sales1 | £522.7m | £487.3 | 7.3% |
UK Like-for-Like2 System Sales1 excluding impact of split territories |
2.4% | 13.0% | |
Underlying3 Profit before tax | £44.6m | £40.9m | 9.1% |
Underlying3 Basic EPS | 7.3p | 6.6p6 | 9.9% |
Dividend per share | 3.75p | 3.5p6 | 7.1% |
Net debt | £61.0m | £10.9m | £50.1m |
STATUTORY4 REPORTING | |||
Statutory4 Revenue | £211.3m | £176.4m | 19.8% |
Statutory4 Profit After Tax | £37.7m | £39.8m | (5.3)% |
Basic EPS | 7.7p | 8.0p6 | (3.6)% |
Financial highlights
- Group system sales up 10.5%
- UK system sales up 6.5%: 40 new stores, 2.4% like-for-like growth (ex-splits), (2.3)% total drag from splits
- Nordics consolidation adds £14.9m system sales in the period
- Underlying PBT up 9.1% and Underlying Basic EPS up 9.9%
- Strong cash generation and further debt, funding investment programme and shareholder returns
- Group Net debt of £61m, or 0.6 x EBITDA
- Recommended interim dividend +7.1% to 3.75p; £20m share purchases in H1 2017
Strategic progress
- Continued digital and infrastructure investment programme in the UK
- Online sales up 11.5%, now 75% of total sales
- New Warrington supply chain centre to go live in Q1 2018 to deliver additional capacity and future productivity gains
- Anticipated net cost of c. £3m in FY18 ramp up split between operating expense and depreciation
- £21m invested in attractive International growth opportunities
- Majority ownership of Norway, Sweden and Iceland investments from April 2017. Completed Dolly Dimple’s acquisition in Norway in May 2017
- H2 investment in customer value to further drive volume in UK
- Leveraging scale, brand and economic model to grow more strongly
- Investing up to £4m gross in H2 2017 to improve value for customers and strengthen national promotions
- Accelerating store roll-out: now expecting 90 openings in the UK this year
- We intend to resume share buy-backs shortly, reflecting confidence in the long term and commitment to shareholder value
Commenting on the results, Chief Executive Officer David Wild, said:
“The first half of 2017 has been another period of good progress for Domino’s Pizza Group, despite a more uncertain UK economic environment. The core business delivered strong year-on-year system sales, continuing to take pizza market share, with good like-for-like performance.
“We’ve had a record six months in the UK, opening 40 new stores and have consequently raised our expectations from 80 to 90 this year. I’m delighted we’ll shortly be opening our 1,000th British unit and we are well on track to achieve our goal of 1,600.
“DPG continues to lead the pizza market, with innovations such as the popular Lotta-Chocca pizza and our launch today of Amazon Echo voice ordering. Following a successful trial, we’ll be rolling out GPS, which will enable customers to track their delivery and help franchisees with labour management.
“This autumn, we’ll invest around £4m to improve customer value, supported by a bold new advertising campaign.
“We’ve taken controlling positions in our Nordics operations and completed the acquisition of the Dolly Dimple’s pizza chain in Norway, giving us immediate scale with promising early results in attractive markets, which are, as yet, underdeveloped.
“Our ongoing investment in growth, our new Warrington supply chain centre, digital capabilities and overseas expansion is balanced by returning capital to shareholders through dividends and share buybacks.
“Whilst we acknowledge that our UK consumers are currently more cautious about the economic outlook, we’re focussing on growth investment with our franchisees; boosting marketing; improving customer engagement and enhancing our leading position in food delivery. Pizza remains the world’s most popular delivered food, and Domino’s is the top choice for consumers.”
1 System sales represent the sum of all sales made by both franchised and corporate stores to consumers
2 Like-for-like sales performance is calculated against a comparable 26 week period in the prior year for stores not impacted by splitting of territories prior to 27 December 2015.
3 Underlying is defined as statutory performance excluding amounts relating to non – underlying7 items
4 Statutory revenues represent revenues directly attributable to DPG being derived from monies paid by franchisees for foodstuffs together with royalty payments for use of the Domino’s brand, rental income from freehold and leasehold property, and corporate store sales in Switzerland and the Nordics
5 Franchisee data submissions to end of May 2017 based on stores opened before 27 December 2015 that were not split in the last 2 years
6 2016 EPS has been adjusted to reflect the 3 for 1 share split that took place on 27 June 2016
7 Non-underlying items are defined as being items that are material in size, unusual or infrequent in nature, and are disclosed separately as non-underlying items in the notes to the accounts.
For further information, please contact:
Domino’s Pizza Group plc:
David Wild, Chief Executive Officer
Rachel Osborne, Chief Financial Officer
Charlie Parry, Head of Corporate Finance
01908 580 732
Maitland:
James Devas, Robbie Hynes
020 7379 5151
A presentation to analysts will be held at 9.00am on 25 July 2017 at Numis Securities Auditorium, LSE Building, 10 Paternoster Square, London EC4M 7LT
A full webcast (live and on demand) of the presentation will also be available on the day, please register at: http://www.investis-live.com/dominos/594a8d409a0fb30c00914db1/jhri
Alternatively a listen only call facility is available:
Participant dial-in numbers
United Kingdom 020 3059 8125
All other locations + 44 20 3059 8125
Password Dominos
Call replay information (7 days)
United Kingdom 0121 260 4861
United States 1 844 2308 058
All other locations + 44 121 260 4861
Passcode 6475466 followed by #