Domino’s Pizza Group PLC (LON:DOM) have seen fourth quarter revenue growth in their most recent trading update published today.
Domino’s, known for their mouth watering pizzas, range of sides and the notorious “two for Tuesday” deals have seen a mixed period of trading, however the update today will please shareholders.
The firm reported fourth quarter revenue growth, which was driven by better performance in the UK and Irish market.
Domino’s also noted that there are procedures that are currently taking place which involve the disposal of their international operations, which was the subject of headlines a few months back.
The firm said: “In October, we announced that Domino’s Pizza Group would be exiting our directly operated international markets, with the intention of finding more suitable owners for these businesses, ensuring the Domino’s brand remains and thrives in these countries. Since this announcement, the Board’s focus and priority has been on Norway, given the significant operating losses in this market. Once we have agreed a transaction for Norway, we will focus on progressing transactions for our businesses in Sweden, Switzerland and Iceland. We are focused on securing the best possible terms for shareholders and are working closely with Domino’s Pizza Inc throughout. We will update the market in due course.”
In the 13 weeks to December 29, group sales were 3.7% higher year-on-year at £352.0 million from £339.6 million, one impressive statistic to take from today’s update.
On an organic metric, at constant currency and excluding acquisitions and disposals, sales climbed 4.1% from the year prior.
In the UK and Ireland, sales jumped 4.4% from £312.9 million to £326.7 million, on organic measures this also showed a 4.5% rise.
Like-for-like sales in the UK alone were 3.9% higher during the quarter, though in Ireland, they were down 1.0%.
Internationally, Domino’s have struggled and business has slumped. Once again this sentiment was reflected in the figures from today’s update.
Looking at international business, sales were down 4.9% to £25.3 million from £26.6 million. Domino’s said its disposal program is “progressing” and added that it is focusing on offloading its Norway operations.
David Wild, Chief Executive Officer, said:
“I am pleased with the performance of our core UK and Ireland markets, with system sales up 4.4% and UK like-for-likes up 3.9%, against a strong comparative and a competitive backdrop. This performance was driven by the power of our brand, our strong digital capabilities and the operational expertise of our franchisee partners.
“At the end of the period we announced the tragic passing of our CFO, David Bauernfeind. David will be deeply missed by all who knew him and worked with him. He leaves behind a high-quality finance team who have shown remarkable resilience and dedication over the past month, and we are well advanced in the search for an interim CFO.
“We look forward to announcing our preliminary results next month and updating the market on strategic progress made over the last few months.”
Domino’s Chair departs
Domino’s told the market in December that chair Stephen Hemsley would step down, and the firm is set to look for a replacement.
The FTSE250 listed firm said that Senior Independent Director Ian Bull will become interim chair while the search continues.
Domino’s commented: “The search for a new chairman is progressing, and will be followed by the appointment of a new CEO. Further announcements will be made in due course.”
The exiting from European markets may mean that Domino’s can centralize their UK and Irish business, a sector which has been blooming over the last quarter. In the long term this could prove beneficial is results continue to be strong.
Shares in Dominos trade at 313p (+5.55%). 5/2/20 11:12BST.
