25th Jul 2006 07:01
Domino's Pizza UK & IRL PLC25 July 2006 For Immediate Release 25 July 2006 DOMINO'S PIZZA UK & IRL plc RESULTS FOR THE TWENTY-SIX WEEKS ENDED 2 JULY 2006 Domino's Pizza UK & IRL plc ("Domino's Pizza" or the "Group"), the UK andIreland leader in pizza delivery, announces its results for the twenty-six weeksended 2 July 2006. Highlights • Profit before tax* increased 24.5% to £6.3m (2005: £5.0m). Unadjusted profit before tax of £6.3m (2005: £5.5m) increased by 13.4%. • Earnings per share*: - Basic earnings per share up 31.2% to 9.18p (2005: 7.00p) - Diluted earnings per share up 27.7% to 8.77p (2005: 6.87p). • Interim dividend increased 33.9% to 4.15p per share (2005: 3.10p). • 21 new stores opened in the period (2005: 23 stores). No stores were closed (2005: nil) resulting in a total of 428 stores at the period end (2005: 380 stores). • Like-for-like sales in 357 mature stores up 8.3% (2005: 8.4% in 317 stores). • System sales increased 18.3% to £114.8m (2005: £97.1m). • E-commerce sales up 46.9% to £9.6m (2005: £6.5m). E-commerce now represents 12.3% of our delivered pizza sales in the UK. • Cash at bank and in hand of £8.6m (2005: £8.5m). * Before 2005 accelerated LTIP charge of £0.3m and exceptional profit on sale ofcorporate stores of £0.8m. Stephen Hemsley, Chief Executive of Domino's Pizza UK & IRL plc, commented: "The focus of your Group in the first twenty-six weeks of 2006 has continued tobe the roll-out of the Domino's Pizza system in the UK and Ireland. This hasseen us further extend our market leadership in the fast-growing pizza deliverysegment both in terms of the number of stores and total system sales. Five ofthe top ten most successful Domino's Pizza stores in the world, as measured bysystem sales performance, are now within the markets we manage. "Like-for-like sales in the 357 mature stores grew by 8.3% and e-commercechannels continue to perform very well. The strong cash generation of yourGroup, and the anticipated completion of a capital re-organisation, should allowfor further share buy-backs in the second half. We are confident that earningswill meet market expectations for the year." For further information, please contact: Domino's Pizza: Stephen Hemsley - Chief Executive 01908 580604Lee Ginsberg - Finance Director 01908 580611Bernadette Ahmed - Press Office 07909 928016 Hogarth Partnership Limited: Chris Matthews, Fiona Noblet, Anthony Arthur 020 7357 9477 Notes to editors: Domino's Pizza UK & IRL plc holds the exclusive master franchise to own, operateand franchise Domino's Pizza stores in the UK and Ireland. The Group is theleading player in the UK and Ireland's fast-growing pizza delivery market. Thefirst UK store opened in 1985 and the first Irish store opened in 1991. There are 428 stores in the UK and Ireland. Of these, 345 stores are in England,31 are in Scotland, 14 are in Wales, 11 are in Northern Ireland and 27 are inthe Republic of Ireland. Founded in 1960, Domino's Pizza is the recognised world leader in pizzadelivery. Through its primarily franchised system, Domino's Pizza operates aglobal network of more than almost 8,000 stores in 55 countries. For photography visit www.dominos.uk.com/media or contact Hogarth on 020 73579477. CHIEF EXECUTIVE'S STATEMENT Introduction The focus of your Group in the first twenty-six weeks of 2006 has continued tobe the roll-out of the Domino's Pizza system in the UK and Ireland. This hasseen us further extend our market leadership in the fast-growing pizza deliverysegment both in terms of the number of stores and total system sales. System sales, which are the sales of all stores in the Domino's system in the UKand Republic of Ireland, grew strongly in the period driven by 21 new storeopenings, strong advertising campaigns financed by additional contributions fromour franchisees and the World Cup at the end of the period. Your Group ispleased to report that five of the top ten most successful Domino's Pizza storesin the world, as measured by system sales performance, are within the markets wemanage. This very impressive record can only be achieved if our stores - and thefranchisees and team members who own and operate them - consistently fulfil ourbrand's promise to customers. We, therefore, aim for growth that is coupled withcontinuous focus on our operational standards. Accordingly, as your Groupinvests in expansion, equal vigour is being directed at making improvements toour already high in-store standards. I am encouraged to see that the additional resource we have put into providingmore operational support to franchisees and stores is having positive results soquickly. This is a big investment for your Group but one that is essential if weare to build a respected system of 1,000 stores in partnership with ourfranchisees. We firmly believe that by remaining focussed on the detail of our growingbusiness we will unlock significant further potential. Sales System sales rose by 18.3% to £114.8m (2005: £97.1m) in the twenty-six weeksended 2 July 2006. Like-for-like sales in the 357 mature stores grew by 8.3%(2005: 8.4% in 317 stores). In the period, four highly effective campaigns, funded by the NationalAdvertising Fund ('NAF'), have succeeded in driving system sales. One of thesecampaigns involved the launch of our first Simpsons-branded pizza, the AyCarumba Fajita pizza, which was the first outcome of our two-year licensingarrangement with the TV show. This campaign was swiftly followed by the launchof the Football Fanatic pizza, promoted by a TV advertisement featuring MichaelOwen. This enhanced advertising activity was made possible by our franchisees'agreement to increase their contributions to the NAF from 4% to 5% of theirsystem sales. As anticipated, the World Cup had a positive impact despite most of thetournament coinciding with the first spell of very hot weather which wouldnormally depress our system sales. E-commerce generated another record contribution to system sales in the firsthalf, accounting for 12.3% of total UK delivered pizza sales (2005: 10.6%).Sales via e-commerce channels were up 46.9% over last year (2005: 64.0%). Asignificant milestone was achieved in the first half when over £100,000 ofonline sales were transacted in a single night for the first time since theplatform launched in 1999. Research predicts that by 2010 a fifth of ourdelivered pizza sales will be generated via e-commerce platforms. If this can beachieved, economies of scale in the cost of order-taking at store level shouldimprove franchisee profitability as these web-generated orders go straight intothe stores' ordering systems. As mentioned above, today's challenge is that of growth with continuingimprovement. The work we are undertaking to further improve standards, led byChief Operating Officer Chris Moore, has had a measurable impact on system salesgrowth and, in turn, has influenced existing franchisees to expand. In the firsthalf, we presented all stores with a challenge to raise already high product,service and image standards with the effect that the most significant salesimprovements were achieved in stores that had the greatest improvements inservice times. We are encouraged by these initial results and intend to continueto incentivise franchisees to keep focussed on service improvements. System Expansion During the first twenty-six weeks of 2006, 21 new stores were opened (2005: 23stores). Whilst marginally below our target we remain on track for a total of 50new openings in total for the year provided we can secure the necessary planningconsents. The changes to the planning regime resulting from the introduction ofthe A5 category continue to present challenges and uncertainty over the timingof new openings. To address this, further resources will be committed to thisarea. There were no store closures in the period (2005: nil). As a result, thestore count at 2 July 2006 was 428 (2005: 380 stores). Continued expansion through partnership with our high calibre franchisees, whoare close to their local markets, continues to be the most successful means ofgrowing the Domino's Pizza system in the UK and Ireland. As a result, the firsthalf of the year saw your Group dispose of two corporately-owned stores. Plansare well-progressed to dispose of the remaining corporate stores. In the first half, 76% of new store openings were with existing franchisees,underlining our strategy of managing the number of franchisees in the system.Each franchisee now has an average of 2.78 stores (2005: 2.75) and this isexpected to increase in the second half of the year. By encouraging our leadingfranchisees to open additional stores, we will be able to improve standards andmanage both our cost base and resultant operational gearing as we move towardsour goal of 1,000 stores. New store openings since the start of the year extended our presencepredominantly in regions outside the South East of England and included threeopenings in the Republic of Ireland and six in the North of England. Trading Results Group turnover, which includes sales generated from royalties, fees, food salesand rental income as well as a small element of turnover from corporately-ownedand operated stores, grew by 11.4% to £45.1m (2005: £40.5m). Group turnover wasmoderated by the sale of 13 corporate stores into the franchise system in Junelast year which contributed £2.8m towards turnover in the first half of 2005. Group operating profit, before the accelerated LTIP charge and the exceptionalprofit resulting from the sale of corporate stores, was up 24.5% to £6.3m (2005:£5.1m). In 2005 an accelerated FRS 20 charge of £0.3m relating to the earlyvesting of the Long Term Incentive Plan was incurred. This was offset in thatperiod by an exceptional profit of £0.8m from the sale of a number of corporatestores. Unadjusted group operating profit of £6.3m (2005: £4.8m) increased by32.6%. Economies of scale in both the commissary and central overheads continue toallow us to grow profits at a faster rate than the 18.3% increase in systemsales despite the annualised effect of the additional operations costs taken onduring 2005. The strategic objective of opening more new stores with an increasing proportionof existing franchisees will, as mentioned earlier, assist in keeping our costbase under control as we grow however, in the short term, this will generatelower fee income. The commissary rebate scheme, launched last year to help our franchiseesovercome the burden of new external cost pressures, continued in the first halfof 2006. This scheme enhances the profitability of franchisees who achieveenhanced like-for-like sales targets and fully comply with all our standards.The cost of this rebate, whilst higher than budgeted in the first half of 2006due to stronger than expected like-for-like sales increases, was £0.3m (2005:£0.2m). Profit before tax and the accelerated LTIP charge of £0.3m and exceptionalprofit on sale of corporate stores of £0.8m, was up 24.5% to £6.3m (2005:£5.0m). Unadjusted profit before tax was £6.3m (2005: £5.5m), an increase of13.4%. The tax rate of 27% (2005: 26%) is lower than the statutory Corporationtax rate primarily due to the tax relief available on the exercise of shareoptions but marginally higher than 2005 due to the tax relief on the profit fromthe sale of corporate stores last year.Profit after tax before the accelerated LTIP charge and the exceptional gainnoted above was up 28.6% to £4.6m (2005: £3.6m). Earnings per share and dividend Basic earnings per share before the accelerated LTIP charge of £0.3m andexceptional profit on sale of corporate stores of £0.8m were up 31.2% to 9.18pence (2005: 7.00 pence). Diluted earnings per share before the accelerated LTIPcharge of £0.3m and exceptional profit on sale of corporate stores of £0.8mincreased by 27.7% to 8.77 pence (2005: 6.87 pence). Unadjusted basic earnings per share were up 15.2% to 9.18 pence (2005: 7.97pence) and diluted earnings per share were up 12.1% to 8.77 pence (2005: 7.82pence). In line with our strategy of returning cash not required for the growth andexpansion of the business to shareholders, we are pleased to declare an increaseof 33.9% in the interim dividend to 4.15 pence per share (2005: 3.10 pence pershare). This dividend will be paid on 31 August 2006 to shareholders on theregister on 4 August 2006. Cash Flow & Balance Sheet Our cash position remains strong, with operating activities generating net cashof £7.3m (2005: £4.0m).In the first twenty-six weeks of the year, options over 219,000 shares wereexercised generating a cash inflow of £0.3m (2005: £0.3m). During the period,the Group did not purchase any of its own shares (2005: 400,000 shares at a costof £1.1m). We are currently proceeding with the necessary capitalre-organisation to enable the Group to have sufficient distributable reserves tofacilitate further share buy-backs. If this scheme is approved, these buybacksshould take place in the second half. The Group continues to provide franchisees with leasing facilities for newequipment and refits through its wholly owned subsidiary DP Capital Limited. Inthe first twenty-six weeks of the year, new advances of debt facilities of £1.0mwere made available to DP Capital Limited which were matched by similarrepayments resulting in borrowings of £2.7m (2005: £2.6m) at the half year. As at 2 July 2006, the Group had cash-in-hand of £8.6m (2005: £8.5m), whichtaken together with the leasing borrowings noted above and the Employee BenefitTrust ('EBT') loan of £7.5m (2005: £6.4m), gave consolidated net borrowings of£1.6m (2005: £0.5m). After the deduction of the cost of the shares held in theEBT, shareholders' funds were £15.1m (2005: £17.1m), resulting in a gearingratio of 10.6% (2005: 3.1%). Board Composition Michael Shallow and Dianne Thompson CBE joined the Board as Non-ExecutiveDirectors on 5 January and 22 February respectively. We welcome both to theBoard which now benefits from an equal proportion of Non-Executive Directors andExecutive Directors. Outlook As outlined at our Annual General Meeting, we anticipate that like-for-likesales growth in the second half will be more modest than the increases achievedyear-to-date given the demanding comparatives with which we are faced. However,as is our normal pattern, new store openings will accelerate in the second halfgenerating increased system sales and fee income. The strong cash generation ofyour Group, and the anticipated completion of a capital re-organisation, shouldallow for further share buy-backs in the second half. We are confident thatearnings will meet market expectations for the year. STEPHEN HEMSLEYChief Executive GROUP PROFIT AND LOSS ACCOUNT (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 Notes £000 £000 £000TURNOVERTurnover: group and share ofjoint ventures' turnover 46,888 41,780 85,004Less: share of joint ventures' turnover (1,774) (1,278) (3,344) ------- ------- -------GROUP TURNOVER 2 45,114 40,502 81,660Cost of sales (27,534) (23,612) (48,778) ------- ------- -------GROSS PROFIT 17,580 16,890 32,882Distribution costs (3,981) (4,752) (8,538) +----------------------------------+Administration expenses - | |pre accelerated LTIP charge | (7,336) (7,135) (13,504)|Accelerated LTIP charge | - (313) (626)| +----------------------------------+ Administrative expenses (7,336) (7,448) (14,130) ------- ------- -------GROUP OPERATING PROFIT 6,263 4,690 10,214 Share of operating profit in joint ventures 70 82 179Amortisation of goodwill on joint ventures (8) (3) (15) ------- ------- ------- 62 79 164TOTAL OPERATING PROFIT: GROUPAND SHARE OF JOINT VENTURES 6,325 4,769 10,378Profit on sale of fixed assets 10 142 206Profit on sale of subsidiary undertakings - 670 670 ------- ------- -------PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAX 6,335 5,581 11,254 ------- ------- -------Interest receivable 162 263 273Interest payable and similar charges (224) (313) (358) ------- ------- -------PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 6,273 5,531 11,169Tax on profit on ordinary activities 3 (1,674) (1,438) (2,922) ------- ------- -------PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 4,599 4,093 8,247Minority interests 23 - 8 ------- ------- -------PROFIT FOR THE FINANCIAL YEARATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY 4,622 4,093 8,255 ------- ------- ------- Earnings per share - basic 5 9.18p 7.97p 16.25p - diluted 8.77p 7.82p 15.47p There are no recognised gains or losses other than those included in the Profitand Loss Account. GROUP BALANCE SHEET (Unaudited) (Unaudited) At At At 2 July 3 July 1 January 2006 2005 2006 Notes £000 £000 £000FIXED ASSETSIntangible assets 1,506 1,428 1,326Tangible assets 13,643 13,483 13,593Investment in joint ventures 564 421 451 ------- ------- ------- 15,713 15,332 15,370 ------- ------- -------CURRENT ASSETSStocks 2,199 2,372 2,186Debtors 13,090 13,518 12,921Cash at bank and in hand 8,593 8,496 5,885 ------- ------- ------- 23,882 24,386 20,992CREDITORS: amounts falling duewithin one year (14,033) (13,941) (13,742) ------- ------- -------NET CURRENT ASSETS 9,849 10,445 7,250 ------- ------- -------TOTAL ASSETS LESS CURRENT LIABILITIES 25,562 25,777 22,620 CREDITORS: amounts falling dueafter more than one year (9,232) (8,060) (9,085) PROVISION FOR LIABILITIES AND CHARGES (1,273) (623) (1,447) ------- ------- ------- 15,057 17,094 12,088 ======= ======= ======= CAPITAL AND RESERVESCalled up share capital 6 2,658 2,748 2,645Share premium account 6 4,927 4,514 4,677Treasury shares held by EmployeeBenefit Trust 6 (4,216) (6,360) (7,500)Capital Redemption Reserve 6 171 60 171Profit and loss account 6 11,429 16,132 12,013 ------- ------- -------Equity shareholders' funds 14,969 17,094 12,006Minority interest 88 - 82 ------- ------- ------- 15,057 17,094 12,088 ======= ======= ======= GROUP STATEMENT OF CASH FLOWS (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 Notes £000 £000 £000 NET CASH INFLOW FROM OPERATING ACTIVITIES 7 7,313 4,005 12,674 ------- ------- -------RETURNS ON INVESTMENTS ANDSERVICING OF FINANCEInterest received 152 263 273Interest paid (200) (195) (307)Interest element of financelease rental payments (2) (2) (4) ------- ------- ------- (50) 66 (38) ------- ------- -------TAXATIONCorporation tax paid (1,670) (518) (1,549) ------- ------- -------CAPITAL EXPENDITURE ANDFINANCIAL INVESTMENTPayments to acquire intangiblefixed assets (317) (381) (395)Payments to acquire tangible fixed assets (1,269) (1,255) (2,246)Receipts from sales of tangibleand intangible fixed assets 408 407 576Receipts for repayment of jointventure loan 31 27 60Payment to acquire finance leaseassets & advance of franchise loans (523) (576) (1,166)Receipts from repayment of finance lease and franchise loans 685 676 1,172 ------- ------- ------- (985) (1,102) (1,999)ACQUISITIONS AND DISPOSALSSale of subsidiary undertakings- net of costs - 3,586 3,354Utilisation of provisionsrelating to the disposal ofsubsidiary undertakings (203) - (309)Cash balances disposed of withsubsidiary undertakings - - (5)Purchase of subsidiary undertaking and minority interest - - 8 ------- ------- ------- (203) 3,586 3,048 ======= ======= ======= DIVIDEND PAID (2,115) (1,536) (3,169) ------- ------- ------- NET CASH INFLOW BEFORE FINANCING 2,290 4,501 8,967 ------- ------- ------- FINANCINGIssue of shares 263 301 472New long-term loans 857 588 2,146Repayments of long-term loans (696) (610) (1,146)Repayment of capital element offinance leases and hire purchase contracts (6) (12) (16)Purchase of shares by EmployeeBenefit Trust - - (1,140)Purchase of own shares - (1,096) (8,222) ------- ------- ------- 418 (829) (7,906) ------- ------- -------INCREASE IN CASH 2,708 3,672 1,061 ======= ======= ======= NOTES TO THE INTERIM REPORT 1. BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION The interim financial information has been prepared on the basis of the accounting policies set out in the Group's statutory accounts for the fifty-two weeks ended 1 January 2006. The taxation charge is calculated by applying the directors' best estimate of the annual tax rate to the profit for the period. All other accounting polices set out in the accounts for the fifty-two weeks ended 1 January 2006 were applied for the purposes of this statement. Basis of consolidation The Group accounts consolidate the accounts of Domino's Pizza UK & IRL plc and all its subsidiary undertakings drawn up to the nearest Sunday of the month end. 2. TURNOVER AND SEGMENTAL ANALYSIS The principal components of turnover are royalties received, commissary and equipment sales, sale of franchises, pizza delivery sales, rental income on leasehold and freehold properties and finance lease interest income, stated net of value added tax. All of the turnover is in one continuing business segment being the development of the Domino's Pizza Franchise System and originates in the United Kingdom and the Republic of Ireland. The directors believe that full compliance with the requirements of SSAP 25 'Segmental Reporting' would be seriously prejudicial to the interests of the Group as it would require disclosure of commercially sensitive information. The requirements of SSAP 25 with which the Group do not comply are the disclosure of profit before interest and tax and net operating assets by segment. Geographical analysis Turnover by origin Turnover by destination Unaudited Unaudited Unaudited Unaudited 26 weeks 26 weeks 52 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended ended 2 July 3 July 1 January 2 July 3 July 1 January 2006 2005 2006 2006 2005 2006 £000 £000 £000 £000 £000 £000 Group turnover United Kingdom - Royalties and sales to franchisees 38,295 34,427 69,327 37,698 33,895 68,253 - Rental income on leasehold and freehold property 3,430 2,923 6,003 3,430 2,923 6,003 - Finance lease income 148 143 280 148 143 280 ------- ------- ------- ------- ------- ------ Total United Kingdom 41,873 37,493 75,610 41,276 36,961 74,536 Republic of Ireland - Royalties and sales to franchisees 3,071 2,819 5,688 3,668 3,351 6,762 - Rental income on leasehold and freehold property 170 190 362 170 190 362 ------- ------- ------- ------- ------- ------ Total Republic of Ireland 3,241 3,009 6,050 3,838 3,541 7,124 ------- ------- ------- ------- ------- ------- Total Group 45,114 40,502 81,660 45,114 40,502 81,660 Share of Joint Ventures' turnover - United Kingdom 1,774 1,278 3,344 1,774 1,278 3,344 ------- ------- ------- ------- ------- ------- Total Turnover 46,888 41,780 85,004 46,888 41,780 85,004 ======= ======= ======= ======= ======= ======= 3. TAXATION The taxation charge is made up as follows: (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 £000 £000 £000 UK & Republic of Ireland corporation tax: Profit for the period 1,827 1,389 3,082 Joint Venture taxation charge 23 20 49 Adjustment in respect of the previous period (238) - (213) Republic of Ireland corporation tax - 12.5% 62 29 60 ------- ------- ------- Total corporation tax 1,674 1,438 2,978 ======= ======= ======= UK deferred tax Origination and the reverse of timing differences in respect of: Profit in the period - - (56) ------- ------- ------- Total deferred tax - - (56) ------- ------- ------- Tax on profit on ordinary activities 1,674 1,438 2,922 ======= ======= ======= 4. DIVIDENDS PAID AND PROPOSED (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 £000 £000 £000 Declared and paid during the year Final dividend for 2004 3.05p (2003: 2.18p) - 1,536 1,531 Interim dividend for 2005 3.10p (2004: 2.20p) - - 1,638 Final dividend for 2005 4.15p (2004: 3.05p) 2,115 - - ------- ------- ------- 2,115 1,536 3,169 ======= ======= ======= The Directors propose an interim dividend of 4.15p per share of £2,119,000 (2005: 3.10p £1,593,000). The liability in respect of the 2006 interim dividend has not been accrued for at 2 July 2006, in accordance with FRS 21 Events after the balance sheet date. 5. EARNINGS PER SHARE The calculation of basic earnings per ordinary share is based on earnings of £4,622,000 (2005: £4,093,000) and on 50,363,976 (2005: 51,379,161) ordinary shares. The diluted earnings per share is based on 52,687,922 (2005: 52,337,175) ordinary shares which takes into account theoretical ordinary shares that would have been issued, based on average market value if all outstanding options were exercised. Reconciliation of basic and diluted earnings per share (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 £000 £000 £000 Ordinary shares - basic earnings per share 50,363,976 51,379,161 50,810,785 Dilutive share options 1,736,459 958,014 832,056 Reversionary interests 587,487 - 1,725,937 ------- ------- ------- Ordinary shares - diluted earnings per share 52,687,922 52,337,175 53,368,778 ======= ======= ======= On 27 February 2006, 2,825,000 reversionary interests vested and 1,909,334 shares were transferred from the Employee Benefit Trust to satisfy the vesting of the interests. These shares are included in the basic earnings per calculation for the 26 weeks ending 2 July 2006. Reversionary interests have been granted over. 2,075,000 shares, which have not vested at 2 July 2006. 6. RECONCILIATION OF SHAREHOLDERS' FUNDS AND MOVEMENTS ON RESERVES Share Capital Treasury Profit Total Share Premium Redemption Shares held & Loss Shareholders' Capital Account Reserve by EBT Account Funds £000 £000 £000 £000 £000 £000 At 1 January 2006 2,645 4,677 171 (7,500) 12,013 12,006 Proceeds from share issue 13 250 - - - 263 Profit for the 26 weeks ending 2 July 2006 - - - - 4,622 4,622 Share option and LTIP charge - - - - 193 193 Vesting of LTIPs - - - 3,284 (3,284) - Dividends - - - - (2,115) (2,115) ------- ------- ------- ------- ------- ------- At 2 July 2006 2,658 4,927 171 (4,216) 11,429 14,969 ======= ======= ======= ======= ======= ======= On 27 February 2006, 2,825,000 reversionary interests vested and 1,909,334 shares were transferred from the Employee Benefit Trust to satisfy the vesting of the interests. These shares had a historical cost of £1.72 per share (total historical cost - £3,284,054). 7. NOTES TO THE STATEMENT OF CASHFLOWS Reconciliation of operating profit to net cash flows from operating activities (Unaudited) (Unaudited) 26 weeks 26 weeks 52 weeks ended ended ended 2 July 3 July 1 January 2006 2005 2006 £000 £000 £000 Operating profit 6,263 4,690 10,214 Depreciation charge 850 752 1,508 Amortisation charge 77 76 131 Share option and LTIP charge 193 479 963 (Increase)/decrease in debtors (406) (452) 337 (Increase)/decrease in stocks (13) 304 489 Increase/(decrease) in creditors 349 (1,844) (968) ------- ------- ------- 7,313 4,005 12,674 ======= ======= ======= 8. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information contained in this statement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory accounts for the fifty-two weeks ended 1 January 2006. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. This report is being sent to all registered shareholders. Copies can also be obtained from the Registered Office at Domino's House, Lasborough Road, Kingston, Milton Keynes MK10 OAB. INDEPENDENT REVIEW REPORT TO DOMINO'S PIZZA UK & IRL PLC Introduction We have been instructed by the company to review the financial information forthe twenty-six weeks ended 2 July 2006, which comprises the Group Profit andLoss Account, the Group Balance Sheet, the Group Cash Flow Statement and therelated notes 1 to 8. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the company having regard to guidance contained inBulletin 1999/4 'Review of interim financial information' issued by the AuditingPractices Board. To the fullest extent permitted by the law, we do not accept orassume responsibility to anyone other than the company, for our work, for thisreport, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report as required by the AIM Rulesissued by the London Stock Exchange. Review work performed We conducted our review having regard to the guidance contained in Bulletin 2004/1 'Review of interim financial information' and in accordance withInternational Standards on Auditing (UK and Ireland) issued by the AuditingPractices Board for use in the United Kingdom. A review consists principally ofmaking enquiries of management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies and presentation have beenconsistently applied, unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with United Kingdom Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the twenty-sixweeks ended 2 July 2006. Ernst & Young LLPRegistered AuditorLuton24 July 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Dominos