15th Oct 2020 10:03
(Alliance News) - Pizza franchiser Domino's Pizza Group PLC on Thursday said it is set to deliver good full-year profit despite the uncertain backdrop, with sales up in the third quarter of the year.
UK & ROI sales were up 19% year-on-year in the third quarter ended September 30 to GBP342.1 million from GBP288.2 million. UK system sales were up 20%, with the UK accounting for 95% of total UK & ROI system sales.
UK & ROI delivery orders were up 12% to the year prior, with items per order and product mix being good.
UK like-for-like growth was up 17%.
The company said that the government's reduction in value added tax to 5% from 20%, implemented in July, helped franchisees mitigate costs and enabled them to pass savings on to its customers. It however had limited direct benefit to the company's profitability.
Domino's said: "We saw a benefit from staycations and the return of live sport on television during the period, although we also saw a headwind as competitors reopened following the national lockdown and, in September, we saw weaker demand in university areas."
Domino's reopened its collection business, with collection orders around 60% of the prior year level.
"We do not expect our collection business to fully recover to prior levels until normal consumer behaviour returns," the company said.
Five new stores opened in the UK during the quarter, of which all were franchised, and there was one planned closure.
Chief Executive Dominic Paul said: "We continue to work on a long-term strategic plan for the business. At the heart of our future plans is realignment with our franchisee partners and we are having detailed discussions to agree a sustainable way forward, although we continue to expect that these discussions will take some time."
The company expects to report a full year underlying group profit in the range of GBP93 million and GBP98 million, in line with market expectations. In 2019, pretax profit from continuing operations fell by 14% to GBP75.1 million, with underlying pretax profit dipping by 1.2% to GBP98.8 million.
Domino's Pizza shares were down 13% at 325.32 pence each in London on Thursday morning.
By Greg Roxburgh; [email protected]
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