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(Alliance News) - Domino's Pizza Group PLC on Tuesday reported a sharp rise in both earnings and revenue in a half-year period that saw rising online sales and falling costs.
Pretax profit for the six months ended June 27 widened 30% to GBP59.4 million from GBP45.8 million a year previously. The improved bottom line was attributed to stronger trading and lower Covid-19 related costs, which fell by 76% from a year prior to GBP1.5 million. What's more, a reduced VAT rate on hot takeaway food in the first half generated an estimated benefit of GBP3.7 million.
Revenue increased 13% year-on-year to GBP277.8 million from GBP246.9 million. Growth was boosted by booming online sales, up 25% and representing 93% of UK system sales.
Total orders for the period returned to a positive trend, up 3.5% in the first half, driven by collection orders up 27%.
The performance seen in the first half contributed to Domino's progressing towards its medium-term target of annual system sales between GBP1.6 billion and GBP1.9 billion. Last year, system sales were GBP1.35 billion, while in this year's interim results, they were up 20% from a year prior to GBP752.3 million.
"The strong trading in the first half of the year provides us with the firm foundations for the delivery of our strategic growth objectives, which build upon our strengths in both delivery and collection. This will enable us to deliver strong system sales growth and increase our store numbers in the UK and Ireland," commented Chief Executive Officer Dominic Paul.
Looking ahead, Domino's said its second half has started well with strong order count growth as it benefited from the extended involvement of the England football team in the Euros.
It did caution that the scheduled VAT rate increases will cause system sales growth to be lower in the second half. However, VAT changes would have a "limited flow-through to profitability", Domino's noted.
"Whilst the external landscape remains uncertain, the second half has started well. I believe our agile business model leaves us well placed to capitalise on the significant opportunities ahead while continuing to invest in our strategy, which will deliver benefits for franchisees and shareholders alike," Paul added.
Domino's will pay an interim dividend of 3.0p per share, after not paying one in 2020. It also announced an additional GBP35 million to its existing GBP45 million share buyback programme.
Shares in Domino's were up 3.8% at GBP437.60 on Tuesday morning.
By Will Paige; willpaige@alliancenews.com
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