News Column

Domino's Pizza Raises Dividend And Will Resume Share Buybacks

July 29, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Domino's Pizza Group PLC Tuesday raised its interim dividend by 10% and said it plans to resume its share buyback programme, as it posted strong profit and revenue growth in the first half of the year.

The pizza chain posted a pretax profit of GBP25.6 million for the half-year ended June 29, up from GBP11.9 million the prior year, as revenue rose to GBP146.7 million from GBP131.0 million, boosted by the growing number of sales made online.

Domino's Pizza has stores in the UK, Germany, Republic of Ireland and Switzerland, and has recently enjoyed strong sales growth driven by improving consumer confidence in the UK, an expanding product range, increased marketing and advertising, and successful bundle sales and promotions.

"Continued strong sales growth has confirmed the significant opportunity that remains for Domino's in our core UK market, and we have a number of ongoing plans to continue maximising this potential," said Chief Executive David Wild in a statement.

Signalling its confidence, the company raised its interim dividend by 10% to 7.81 pence per share, and said it plans to resume its share buyback programme.

"The cash generation in the first half has meant that the board now plan to resume its share buyback programme," said Wild.

Domino's Pizza shares were up 1.3% Tuesday morning, at 549.50 pence.

The pizza delivery group said system sales, which are total sales made by all the company's franchisee and company-owned stores across the four countries in which it operates, rose almost 15% to GBP375.0 million from GBP326.5 million a year earlier.

"A strong first half performance for Domino's led by the sales results in our core market. We have now seen three successive quarters of double digit like-for-like sales growth in the UK," Wild said in the company's statement.

The group said it plans to open between 40 and 50 new stores in the UK this year.

Outside the UK, Domino's Pizza said that trading in the Republic of Ireland has continued its solid recovery, and it also has seen an improvement in Switzerland after a slow start to the year. However the group said that trading in Germany continues to be challenging.

"Conditions in Germany have proved to be challenging, but I remain determined that we follow our agreed strategy and develop a viable business model," said Wild.

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Source: Alliance News

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