Domino’s lowers FY profit forecast
Group revenue for the pizza company was down 1.8% to £326.8m with lower supply chain revenue offset by increased corporate store revenue following the acquisition of Shorecal
Domino’s has downgraded its FY profit forecast saying it now expects underlying EBITDA to be on the lower range of £144.3m – £149.2m.
In the 26 weeks ended 30 June 2024, the pizza company saw its statutory profit-before-tax plummet 35.2% to £59.4m. However, underlying PBT slightly increased 0.8% to £51.3m.
Group revenue for the pizza company was down 1.8% to £326.8m in the half-year period, with lower supply chain revenue offset by increased corporate store revenue following the acquisition of Shorecal.
Underlying EBITDA increased 0.4% to £69m however, and underlying profit before tax was also up 0.8% to £51.3m, with higher interest costs offset by lower amortisation.
During the period, 30 London corporate stores sold to five different franchise partners for £35.1m. One London corporate store was closed due to a compulsory purchase order issued by the local council.
Total orders of 35.1m was down 0.9% compared with H1 2023, with collection orders up 2.4% and delivery orders down 2.6%.
In H1 Domino’s opened 22 new stores, with 38 stores now in construction or planning approved.
Following “encouraging” results in the first loyalty test phase, Domino’s is now moving to the second phase of loyalty trial with 630k customers. In addition, the company has decided to permanently roll out on the Uber Eats platform following extensive data-led trials which attracted incremental customers and orders.
Commenting on the results, CEO 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.”
Rennie continued: “In our core UK and Ireland business, we see significant opportunity for further growth through opening new stores, an exciting new loyalty trial to drive frequency and a focus on value and service, especially in the delivery channel. There is alignment with our franchise partners and tangible energy across the system to capitalise on this opportunity.”
“We continue to operate a capital light business and are moving towards our goal of building a larger and more profitable business for our shareholders, franchise partners and colleagues.”
