Domino’s Pizza Group achieved further like-for-like growth

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Domino’s Pizza Group (LON:DOM), today announced results for the 26 weeks ended 1 July 2018.

Financial highlights

· Group system sales up 12.8%

o UK system sales up 8.3%: 22 new stores, 5.9% like-for-like growth (Q2: 4.7% LFL); ROI sales up 2.5%

o Strong local currency international growth: Switzerland +13.0%, Iceland +5.5%, Domino’s Norway +180.5%, Sweden +56.4%

· Underlying PBT up 2.5% and Underlying Basic EPS up 6.8%

· Statutory PBT down 9.7% and Basic EPS down 6.5%

· Non-underlying expenses of £4.0m relating to M&A integration and IT and supply chain transformation cash outflow

· Net debt £182.1m, 1.62x LTM EBITDA at period end

· Interim dividend +8.0% to 4.05p; £38.9m share purchases in H1 2018

	26 Weeks Ended 1 July 2018	26 Weeks Ended 25 June 2017	Change
Group System Sales¹	£616.6m	£546.5m	12.8%
UK & ROI System Sales¹	£565.1m	£522.7m	8.1%
UK Like-for-Like² System Sales¹excluding impact of split territories	5.9%	2.4%
Underlying³ Profit before tax	£45.7m	£44.6m	2.5%
Underlying³ Basic EPS	7.8p	7.3p	6.8%
Dividend per share	4.05p	3.75p	8.0%
Net debt	£182.1m	£61.0m	£(121.1)m

STATUTORY REPORTING
Statutory Revenue⁴	£259.1m	£211.3m	22.6%
Statutory Profit Before Tax	£41.7m	£46.2m	(9.7)%
Basic EPS	7.2p	7.7p	(6.5)%

Strategic progress

· Digital investments to support franchisee efficiency and drive customer engagement

o GPS in 603 UK & ROI stores: significant labour efficiencies; H1 franchisee store profitability up 5.3%

o Investment in new e-commerce and app platforms planned, to improve the customer experience further

· Strong operational focus in acquired businesses

o London: volume-driven growth, staff turnover down

o International: labour cost issues affected H1; actions taken now coming into effect’

· Warrington Supply Chain Centre operational, production ramped to 130 stores

· Full year Underlying PBT expected to be in line with current market expectations

o Around 60 new UK stores for 2018, of which several uncertain on timing; unchanged long term target of 1,600

o Total Group capex around £30m

o Completion of £50m share purchase programme

Commenting on the results, Domino’s Pizza, Chief Executive Officer David Wild said:

“It’s been another good trading period for Domino’s. In the UK, despite continued consumer uncertainty, we’ve achieved further like-for-like growth by maintaining our clear focus on product, service and value for customers. Our ongoing investments in supply chain infrastructure and our IT platform will support future growth and customer engagement. Domino’s is proud to be one of the most successful franchise businesses in the UK, and we will continue to work with our franchisee partners to promote the brand and the strength of the system.

“Whilst our international businesses continue to make good progress with customers and sales, it has taken us some time to refine the operating model and cost base at store level, particularly in Norway. We are confident that the changes we have made will result in a better performance in H2, and believe that these businesses offer significant long term growth potential as we export our expertise in digital, supply chain and franchisee management.

“The Board expects that full year Underlying Profit Before Tax will be in line with current market expectations6. Our confidence in the future is underlined by continued growth in the dividend, and our ongoing investment in our own shares through the buyback programme.”

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