As it turns out, hiring staff in Norway is rather expensive. Domino’s Pizza's (DOM) Norwegian sales improved by 5 per cent on a like-for-like basis during the first half, but losses were "higher than anticipated" as labour costs exceeded budgets. This contributed to an underlying operating loss of £1.8m across the international business, which also includes Switzerland, Iceland, Sweden, and Germany – despite a 96.2 per cent improvement in total overseas revenue to £46.7m.
The UK and Republic of Ireland still make up the lion's share of Domino’s sales, but domestic growth hasn’t been without difficulty. Management now expects to open 60 stores by the year-end, compared with original guidance of between 65 and 75 new locations. Like-for-like sales in the UK rose 5.9 per cent during the first half, although growth slowed between the first and second quarters. Analysts think the boost from the World Cup wasn't enough to offset the impact from warmer weather.
Analysts at Numis expect pre-tax profits of £99.6m for 2018, giving EPS of 16.6, compared with £116m and 15.7p in 2017.
| DOMINO'S PIZA GROUP (DOM) | ||||
| ORD PRICE: | 286p | MARKET VALUE: | £1.36bn | |
| TOUCH: | 286-286.3p | 12-MONTH HIGH: | 390p | LOW: 264p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 9p* | NET DEBT: | £182m | |
| Half-year to 01 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 211 | 46.2 | 7.7 | 3.75 |
| 2018 | 259 | 41.7 | 7.2 | 4.05 |
| % change | +23 | -10 | -6 | +8 |
| Ex-div: | 16 Aug | |||
| Payment: | 14 Sep | |||
| *Includes intangible assets of £114m, or 24p a share | ||||
