Domino’s Pizza (DOM) shares fell by as much as a tenth after the company warned that additional measures taken to protect trading during lockdown will push its first half cash profits slightly below last year’s level. For the first half of 2019, Domino’s recorded underlying earnings before interest, taxation, depreciation and amortisation (Ebitda) of £52.4m.
Lockdown has heated up Domino’s UK sales. Having registered 2.3 per cent like-for-like revenue growth from the end of 2019 up to 22 March, this then rose by 5.1 per cent between 23 March and 14 June. This is despite collections, which accounted for around a fifth of 2019 sales, being stopped, and order count dwindling over the lockdown period. Domino’s’ Irish business, meanwhile, recorded a 9.2 per cent drop in turnover, which the company attributed to consumer spending taking a more significant hit in Ireland.
The costs of sustaining this activity during lockdown will depress Domino’s interim profits, however. These included safeguarding measures taken across the company’s supply chain and support offered to franchisee partners.
Peel Hunt analysts forecast full year 2020 adjusted pre-tax profits and earnings per share of £99.3m and 17.4p respectively, rising to £103.1m and 18.2p in 2021.
