17th Oct 2019 08:14
(Alliance News) - Domino's Pizza Group PLC on Thursday said it will be exiting international operations after continued "disappointing" performance.
Shares in the pizza delivery franchise owner were 1.4% higher in early trade in London at a price of 269.56 pence each.
Domino's said it has been reviewing operations abroad over the past six weeks, and has decided to pull out from the four countries despite them being "attractive" markets. Domino's currently trades in Switzerland, Iceland, Norway, and Sweden.
International system sales for the 13 weeks to September 29, the company's third quarter, fell 2.7% to GBP25.3 million, and were flat organically.
"Although the financial results have stabilised, the performance of our international business remains disappointing. Over the past six weeks we have completed a review with external consultants, assessing each of our four international markets and the future prospects for our businesses," said Chief Executive David Wild.
"We have concluded that, whilst they represent attractive markets, we are not the best owners of these businesses. The board has therefore decided to exit the markets in an orderly manner."
Group system sales for the period were 3.4% higher at GBP313.5 million, and organically rose 3.5%. The core UK & Ireland segment delivered 3.9%, and 3.8% organic, system sales growth to GBP288.3 million.
Within that, UK sales rose 3.0% like-for-like, compared to 2.2% growth a year ago, but Irish like-for-like system sales dipped 0.7% after 3.3% growth a year before.
"We delivered a solid performance in our core UK Ireland markets, with system sales up 3.9%, against a market backdrop that remains challenging. Normal working practices continue to be impacted by our franchisee dispute," Wild commented.
"As we said at our interim results, this situation is complex and we expect a resolution to take time, certainly into 2020. We remain committed to working with our franchisees to agree sustainable win-win solutions."
Domino's is continuing to look for a successor to CEO Wild, it said, who announced his departure in August. It is also searching for a new chair after incumbent Stephen Helmsley announced his own departure at the same time as Wild.
In a separate announcement, Domino's announced the appointment of Diaz Sese as a non-executive director. He most recently served as president for Northern Europe at Kraft Heinz Co.
By George Collard; [email protected]
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