Domino's Pizza's (DOM) half-year results were evocative of Groundhog day: the UK and Ireland outperformed, while Germany served up yet another soggy performance. Like-for-like sales in Germany fell 1.7 per cent, while the loss widened from £3.2m to £4.7m. The country's transition from corporate stores to a franchise model is taking longer than expected.
New chief executive David Wild conceded that Germany was a "work in progress", and that the scale of the challenge could not be underestimated. But he also said there was huge potential in the country, if Domino's can get its act together.
In contrast, sales in the UK grew 11 per cent on a like-for-like basis, and by 3 per cent in Ireland. Their combined underlying operating profit jumped 15 per cent to £30m, helped by new store openings, but also lower prices on key commodities such as milk. Strong trading in the UK reflected successful investments in Domino's website, mobile commerce business and apps. Mr Wild sees huge potential for these channels to further strengthen both the UK and Irish businesses. Good cash generation across the group also prompted management to announce a return to its share buyback programme.
Peel Hunt expects pre-tax profit of £52.8m for the full year, giving EPS of 24.5p, up from £47.6m and 23.9p in 2013.
| DOMINO'S PIZZA (DOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 544p | MARKET VALUE: | £900m | |
| TOUCH: | 543-545p | 12-MONTH HIGH: | 625p | LOW: 462p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 40p | NET DEBT: | 6% | |
| Half-year to 29 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 131 | 11.6 | 4.7 | 7.1 |
| 2014 | 147 | 25.0 | 12.0 | 7.81 |
| % change | +12 | +116 | +155 | +10 |
Ex-div: 4 Aug Payment: 5 Sep | ||||
