Family favourite fast-food pizza chain Domino’s (NYSE:DPZ) has released its interim results for the six months leading up to June 2020. Despite citing “resilient performance during unprecedented trading conditions”, the company’s underlying profits took a major 4.6% hit during the coronavirus pandemic.
UK and Ireland system sales reportedly increased 5.5% year-on-year to £628.9 million, with like-for-like sales excluding splits up 4.8%, while Ireland like-for-like sales excluding splits slipped 3.6%.
Domino’s underlying profit before tax took a blow, however, sliding to £47.6 million from £49.9 million in the same period last year.
Statutory profit before tax from continuing operations nonetheless grew 13.6% to £45.8 million, up from the £40.3 million recorded in the sixth months leading up to June 2019.
The chain has commendably managed to tackle its net debt, down 15.4% to £202.1 million.
Domino’s decision to terminate collections throughout the Covid-19 lockdown period – offering contact-free delivery only between March and July to help keep customers and staff “safe and happy” – saw Q2 collection orders down 87%, while Q2 delivery orders increased by 22%.
The company’s announcement also confirmed that its deferred FY19 dividend of 5.56p per share – amounting to £26m in total – is now set to be paid on 18 September 2020.
Commenting on the results, Dominic Paul, Domino’s chief executive officer, celebrated the company’s performance while warning that the outlook for its next half-year report is still decidedly uncertain:
“Throughout these unprecedented times we have focused on doing the right thing for our customers, colleagues, franchisees and communities. We view it as a privilege to have been able to stay open throughout the period.
“We have an amazing brand, an exceptional supply chain, highly experienced franchisee partners and a dynamic and responsive model. The relationship with our franchisees is challenging and this situation dates back several years. Although I expect this to take some time to resolve, our performance during the period is a great demonstration of what we can achieve when we work together.
“The macroeconomic, consumer and competitive backdrop for the second half of the year contain considerable uncertainties. Our system demonstrated responsiveness and agility in meeting the challenges presented through the lockdown period, although that did come at some inevitable and, in certain areas considerable, incremental costs”.
Shares at Domino’s were down 0.82% to USD 385.93 at the close on Monday.