(Alliance News) - Domino's Pizza Group PLC on Tuesday celebrated "good momentum" after a slow start to the year, as it anticipates sales growth and announced a higher dividend alongside a new share buyback.
Milton Keynes, England-based Domino's Pizza Group is the master franchise holder in the UK and Ireland for US pizza delivery brand owner Domino's Pizza Inc.
Domino's Pizza Group said pretax profit fell 35% to GBP59.4 million in the first half of 2024 from GBP91.5 million a year prior. Underlying pretax profit however edged up 0.8% to GBP51.3 million from GBP50.9 million.
Underlying pretax profit excludes a GBP40.6 million profit Domino's occurred in the first half of 2023 from the disposal of a German associate, and a GBP11.2 million profit on disposal of corporate stores. For the first half of 2024, it excludes Shorecal Ltd acquisition costs of GBP2.2 million and amortisation of intangible assets of GBP1.0 million in the first half of 2024.
System sales edged up 0.2% to GBP767.7 million from GBP766.4 million. Revenue declined 1.8% to GBP326.8 million from GBP332.9 million.
The company upped its interim dividend by 6.1% to 3.5 pence per share from 3.3p a year prior.
Separately, Domino's announced a new GBP20 million share buyback programme, aimed at reducing the company's share capital.
Looking ahead, the company said it will pass on food cost deflation to its franchise partners.
Chief Executive Officer Andrew Rennie said: "Following a slow start to the year, we now have good momentum in the business with our strategic initiatives gaining traction and our trading performance accelerating steadily against strong comparatives from last year. In Q2 we grew orders, with a notable improvement from the middle of May and importantly have halted the trend of declining delivery orders. These are now returning to growth and this momentum has continued through June and July, helped by a good performance through the Men's Euro football tournament."
Domino's expects Shorecal to contribute around GBP5 million to 2024's underlying earnings before interest, tax, depreciation and amortisation, as the Shorecal acquisition completed earlier than expected.
In April, Domino's bought the remaining 85% shareholding it didn't already own in Shorecal for EUR72 million in cash and shares. Shorecal is the largest Domino's franchise business operating in both the Republic of Ireland and Northern Ireland.
The company expects to maintain its "trading momentum" into the second half of 2024 despite an uncertain market, as it targets like-for-like sales growth for the full year.
Domino's shares were down 4.4% to 295.40 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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