Domino’s Pizza Group plc, the leading pizza company, has announced its very positive results for the 26 weeks ended 28 June 2015, attracting Douglas Jack at Numis to comment:
“We are upgrading our 2015E PBT forecasts to £64.0m from £62.2m (consensus £63.1m) as a result of now assuming 6% LFL sales growth for the UK over the full year. We believe the resultant 25.5x P/E undervalues the company given its £19.2m net cash position, zero net rent, minimal capex, high digital orientation, and further upgrade potential.”
Chief Executive Officer David Wild outlined the performance:
“We’ve had a strong first half, driven by an excellent performance in our core UK business, which has again recorded double digit like-for-like sales growth. Our international operations have also shown improvements compared to last year.
“Our success in the UK is a result of the investment we have made in market-leading e-commerce initiatives. Our App has now been downloaded over 10 million times and our App sales have overtaken desktop sales for the first time.
“The 21 new stores opened in the period are performing better than ever. Our roll out is well supported by our franchisees, who are benefiting from increased profitability and are seeing a good reaction from the UK consumer to our bundle deals and other initiatives.
“Whilst we are pleased with our performance in the first half, we face tougher comparators in the rest of the year. We have a continued programme of e-commerce initiatives and other marketing campaigns. The UK new store pipeline is solid and we are well-positioned for the future.”
| Financial Highlights | 26 Weeks Ending 28 June 2015 |
26 Weeks Ending 29 June 2014 |
Change |
| System Sales | £426.7m | £375.0m | +14% |
| UK Like-for-Like Sales | £378.8m | £343.4m | +10% |
| Underlying Operating profit | £32.1m | £24.7m | +30% |
| Underlying Basic EPS | 15.3p | 11.6p | +32% |
| Net cash/(debt) balance | £19.2m | £(3.7)m | +£22.9m |
| Interim Dividend per share | 9.00p | 7.81p | +15% |
| Statutory Revenue | £157.3m | £145.6m | +7% |
| Statutory Profit After Tax | £25.4m | £19.7m | +29% |
Highlights
- UK market continues to underpin growth with another half of double-digit LFL sales
- Successful new opening store programme
- 21 (2014: 8) stores opened in the period
- System sales per store almost 12% ahead
- Continued success of digital investment programmes in the UK
- e-commerce system sales ahead by 24.4%
- App based sales now represents the largest distribution channel driving 51.6% of online sales
- Significant increase in franchisee profitability
- EBITDA performance up from 12.9% to 15.1%
- Improving performances in international businesses
- Economic recovery and operational improvements in ROI
- Losses in Germany narrowed from £4.7m to £1.8m
- New corporate stores opened in Switzerland
- Group underlying operating profit and EPS up by 30%
- Strong cash flow and cash conversion – net cash of £19.2m
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