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On August 6, 2024, Domino’s Pizza Group PLC (LON:DOM) reported encouraging developments despite a challenging start to the year. The company announced a 6.1% increase in its interim dividend, raising it to 3.5 pence per share from 3.3 pence. Additionally, Domino’s introduced a new £20 million share buyback program aimed at reducing the company’s share capital.
Profit and Revenue Performance
Domino’s reported a 35% decrease in pretax profit for the first half of 2024, falling to £59.4 million from £91.5 million the previous year. However, the underlying pretax profit showed a slight increase of 0.8%, reaching £51.3 million compared to £50.9 million. The underlying figure excludes a £40.6 million profit from the disposal of a German associate and an £11.2 million gain from the sale of corporate stores in the previous year. For the first half of 2024, adjustments include £2.2 million in acquisition costs related to Shorecal Ltd and £1.0 million in amortisation of intangible assets.
Sales and Revenue Trends
System sales saw a marginal increase of 0.2%, rising to £767.7 million from £766.4 million. However, revenue declined by 1.8%, decreasing to £326.8 million from £332.9 million. Despite this, the company is optimistic about future performance and is set to pass on food cost deflation benefits to its franchise partners.
CEO’s Insights
Chief Executive Officer Andrew Rennie highlighted a positive shift in momentum, noting that the company had overcome a slow start to the year. Rennie reported improved trading performance and order growth from mid-May, reversing a previous decline in delivery orders. This positive trend has continued through June and July, bolstered by a strong performance during the Men’s Euro football tournament.
Impact of Shorecal Acquisition
In April 2024, Domino’s acquired the remaining 85% of Shorecal, its largest franchise business in the Republic of Ireland and Northern Ireland, for €72 million in cash and shares. The acquisition, which was completed earlier than anticipated, is expected to contribute approximately £5 million to the company's underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) for 2024.
Future Outlook
Looking ahead, Domino’s Pizza Group is focused on maintaining its trading momentum in the second half of 2024. Despite market uncertainties, the company aims to achieve like-for-like sales growth for the full year.
