Dominos delivers robust UK & Ireland results

Dominos Pizza Group has reported its interim results for the 26 Weeks Ended 30 June 2019, showing group sales rose by 4.7%.

UK like-for-like sales (excluding splits) increased by 3.9% (1.8% including splits), with an improving trend through the half (LFL excluding splits Q1: 3.1%, Q2: 4.8%)

The UK and Ireland's operating profit stood at £51.6m, an increase of 7.1%.

International performance remained challenging with sales down 3.4%, up 0.4% on a constant currency basis. Operating loss stood at £6.4m, versus £1.8m loss in H1 2018.

Active discussions with our UK & Ireland franchisees continue; new store openings and some working practices being impacted whilst these are ongoing. We remain committed to finding sustainable, win-win solutions but anticipate that resolution will take time, likely into 2020.

Thirteen stores opened in H1, of which seven are in the UK, taking the group's total estate to 1,272 sites.

Digital continues to drive customer engagement and online purchases now account for 82% of UK system sales.

During the period, Emily Somers, the former Vice President of Marketing and Food Development at McDonalds. joined as Chief Marketing Officer.

David Wild, Group CEO, has informed the Board that he plans to retire. A process to recruit a successor is progressing and a further update is likely later this year.

Wild said, “Our core UK and Republic of Ireland markets delivered a good performance, with system sales up 5.5% and underlying operating profit up 7.1%.

'Digital remains a key driver of customer engagement, with online now accounting for 82% of total sales in the UK. Although a small part of our business, we are delivering pleasing operational improvements in our London corporate store estate.”

Wild continued, “The relationship with our UK and Ireland franchisees is very important to the long-term sustainable growth of the system. We are actively involved in detailed discussions and are giving these considerable focus and attention.

'Whilst dialogue is continuing, new store openings are being delayed and some of our working practices are being impacted. The situation is complex, and we expect resolution will take some time, likely into 2020. We are committed to working with our franchisees to agree sustainable win-win solutions.”

Wild noted, “The performance of our International business is very challenging and trading visibility remains limited. The weakest performance was in Norway, although we also saw increasing losses in Sweden and Switzerland.

'Iceland profitability was impacted by the weak macro-economic backdrop. We are very focused on improving our operational capability across our International markets and will provide a further update at our full year results.”