The nation's love affair with pizza allowed Domino's Pizza (DOM) to deliver an appetising set of first-half results, with sales up 17 per cent at £495m. The group has now posted its 11th successive quarter of double-digit comparable sales growth for the UK. Add to that a record 31 new stores, with average sales in new outlets up by a quarter.
Customers are also making more orders from the comfort of their sofas; e-commerce sales rose by a quarter and mobile-generated sales by 35 per cent. And it seems that the love of pizza is spreading -completion of a joint venture investment that gives it a one-third stake in Germany's largest pizza delivery business was completed in February. It also acquired a minority interest in the Icelandic, Norwegian and Swedish Domino's businesses, and already owns the master franchise to own and operate stores in the Republic of Ireland, where like-for-like sales were up by 12.7 per cent, and Switzerland, where sales were up 11.7 per cent on the same basis.
Acquisition costs and investment turned the December year-end cash pile into net debt of £10.9m, but the business model throws off cash. A well as a £15.3m share buyback, shareholders were rewarded with a decent dividend hike.
Analysts at Numis are forecasting pre-tax profits for the year to December 2016 of £82.3m and EPS of 13.4p (up from £73.2m and 11.9p in 2015).
| DOMINO'S PIZZA (DOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 388.4p | MARKET VALUE: | £1.93bn | |
| TOUCH: | 388.4-389p | 12-MONTH HIGH: | 393p | LOW: 274p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 22p | NET DEBT: | 10% | |
| Half-year to 26 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2015 | 155 | 33.8 | 5.4 | 3 |
| 2016 | 176 | 40.9 | 6.6 | 3.5 |
| % change | +14 | +21 | +23 | +17 |
Ex-div: 4 Aug Payment: 2 Sep DPS and EPS adjusted to reflect 3-for-1 share split in June 2016 | ||||
