TIDMDOM
RNS Number : 1288T
Domino's Pizza Group PLC
10 October 2017
10 October 2017
Q3 Trading Update
Improved trading; digital engagement growing
13 weeks 13 weeks Change Change
to 24 September to 25 September % reported % organic(1)
2017 2016
============================================== ================= ================= ============ ==============
Group system sales GBP286.4m GBP237.0m 20.8% 11.9%
============================================== ================= ================= ============ ==============
UK & ROI system
sales GBP261.6m GBP233.3m 12.1% 11.7%
============================================== ================= ================= ============ ==============
* UK LFL sales growth excl. splits 8.1% 6.2%
============================================== ================= ================= ============ ==============
* ROI LFL sales growth 13.1% 7.6%
============================================== ================= ================= ============ ==============
International system
sales GBP24.8m GBP3.7m - 25.1%
============================================== ================= ================= ============ ==============
Q3 Highlights
-- Group system sales up 20.8%: broad-based uplift
-- UK system sales up 11.6% and UK LFL sales growth up 8.1%
-- Acceleration in digital: UK online sales up 17.4%
-- 1,149 stores groupwide; 19 new stores opened in the period, including 1,000(th) UK store
-- Strong operational and commercial progress in international
markets, as we convert the Dolly Dimples stores and enjoy the
benefits of majority ownership
-- London franchisee joint venture creates a platform for faster growth and innovation testing
-- GBP15m buyback announced in addition to GBP20m of share purchases completed in H1
David Wild, Chief Executive Officer, said:
"We are pleased with our performance in Q3, especially the
improved trend in our core market of the UK. Additionally we are
making progress in all our overseas operations. In Ireland and
Switzerland, our online initiatives are fuelling accelerated
growth, and in Norway the first Dolly Dimple's conversions are
trading very well.
"In the UK, consumers are uncertain and they continue to focus
on value. Our commitment to growth remains undiminished, as does
that of our franchisee partners. We expect to launch a record 90
stores in the UK this year, with an encouraging pipeline already in
place for openings in early 2018. More recently, we have seen a
real surge in digital engagement, with our new advertising
campaign, "The Official Food of Everything", driving a record
200,000 online orders - or 140 a minute - on the last Saturday in
September. The Board reaffirms that its forecasts for full year
underlying profit before tax remain at least in line with market
expectations."
(1) Organic growth represents year-on-year performance on a
constant currency basis and excluding the impact of acquisitions or
disposals.
UK & ROI
Demand for delivered food in the UK continues to be strong
despite the uncertain consumer environment. UK and ROI system sales
were up 12.1% in the quarter, or 11.7% excluding currency effects.
UK system sales were up 11.6%, an improvement on H1, supported by
the record store opening programme and a recovery in like-for-like
sales. We opened 18 new UK stores in the period, taking the 2017
total to 58. We are confident of reaching our 90 unit opening
target for the full year, and already have good visibility of the
pipeline into Q1 of next year. During the quarter we opened our
1,000(th) UK store, in Overton, and by the period end we were
trading from 1,008 stores.
UK like-for-like sales, which exclude stores in split
territories, were up 8.1%. The impact from donor stores on system
sales was (2.1)%. The improved year-on-year growth rate over H1 is
partially due to a weaker comparable period in Q3 last year, with
the two year trend remaining broadly consistent with H1.
Online participation continued to grow, supported by our ongoing
investment in digital platforms. Online sales were up 17.4% and now
represent 75% of UK system sales. We began the roll-out of GPS,
with 64 stores active at the period end and over 200 due to be
operational by the end of the year.
Towards the end of September, we introduced a new nationwide
pricing campaign, "Dine for GBP9.99", which offers customers any
pizza for GBP9.99 when they buy two or more. This is being
supported by the "The Official Food of Everything" Campaign.
During the quarter we acquired a 75% interest in a London
franchisee business comprising 25 stores. The venture gives us a
platform for accelerated growth in the most important market in the
UK, and we expect to increase the store portfolio from 25 to around
40 over the medium term.
ROI system sales were up 13.1% on a constant currency basis,
with like-for-like sales up 12.9%. This performance has been driven
by very strong growth in digital participation, with online sales
up 30.9% and now representing 58% of total sales. We opened our
first new store in the country for 6 years, taking the total store
count to 48.
International
Switzerland achieved constant currency system sales growth of
25.1%, with like-for-like growth of 20.4%. Sales accelerated
strongly as the reduction in menu prices made during H1 drove a
significant uplift in volumes. Online sales were up 69.6% and are
now 61% of total sales.
In Iceland, where we are the clear market leader and average
weekly unit sales are higher than anywhere else in the Domino's
worldwide system, constant currency system sales were up 7.4%, and
like-for-like sales were up 4.0%.
In Norway, pro forma system sales growth from the Domino's store
base was 84.0%, with like-for-like growth of 14.6%. The integration
of Dolly Dimple's and the conversion of stores continues in line
with our plan. We have franchised out 5 Domino's stores and the
franchisee has already opened a sixth.
In Sweden, where we launched in November 2016, we have 3 stores
trading and continue to be pleased with initial progress. We have 3
further stores under construction.
Outlook and guidance
Progress in Q3 has been encouraging and we look forward to
realising the effects of our recently-launched campaign. Despite
the continued uncertainty affecting the UK, we are investing in
growth and the customer proposition for the long term. We now
expect full year capex to be at the lower end of the GBP50-60m
range, and we anticipate full year underlying profit before tax at
least in line with current market expectations.
For further information, please contact:
For Domino's Pizza Group plc:
Peregrine Riviere
07909 907193
Maitland:
James Devas
020 7379 5151
Conference call and webcast
We will be hosting a conference call and audio webcast,
supported by slides, at 09:00 this morning. The call can be
accessed by dialling +44 20 3059 8125, and the password is
Domino's. The call will also be webcast via the following link:
http://www.investis-live.com/dominos/59cd0400ba5a870c002eaebc/bvdx
This information is provided by RNS
The company news service from the London Stock Exchange
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