Domino's Pizza Group PLC Trading Statement (2782M)

TIDMDOM

RNS Number : 2782M

Domino's Pizza Group PLC

12 October 2016

12 October 2016

Domino's Pizza Group plc

Q3 Trading Statement

Strong trading continues

Domino's Pizza plc ("Domino's" or the "Group"), the UK's number one pizza company, issues the following scheduled trading update relating to the period from 27 June 2016 to 25 September 2016.

The Group continued to trade well during the quarter building on the very strong first half. The breakdown of sales performance by market is shown in the table below.

 
                                 13 weeks      13 weeks     % change     Year        Year      % change 
                                   to 25         to 27                  to date     to date 
                                 September     September                  2016        2015 
                                    2016          2015 
-------------  --------------  ------------  ------------  ---------  ----------  ----------  --------- 
                System sales 
                 LFL sales       GBP220.9m     GBP200.0m               GBP684.9m   GBP597.0m 
 UK              growth            +3.9%         +14.9%      +10.5%      +8.6%       +11.8%     +14.7% 
-------------  --------------  ------------  ------------  ---------  ----------  ----------  --------- 
                System sales 
                 LFL sales       EUR14.9m      EUR13.8m                EUR45.2m    EUR40.9m 
 ROI             growth            +7.6%         +14.1%      +7.6%       +11.0%      +9.0%      +10.6% 
-------------  --------------  ------------  ------------  ---------  ----------  ----------  --------- 
                System sales     CHF 4.8m 
                 LFL sales         +0.0%       CHF 4.1m                CHF15.0m    CHF12.1m 
 Switzerland     growth              *           +5.3%       +16.7%      +7.6%       +3.6%      +23.6% 
-------------  --------------  ------------  ------------  ---------  ----------  ----------  --------- 
 Group          System sales     GBP237.0m     GBP212.6m     +11.5%    GBP731.5m   GBP635.1m    +15.2% 
-------------  --------------  ------------  ------------  ---------  ----------  ----------  --------- 
 

* Underlying Q3 LFL for Switzerland is 7.6%, and underlying YTD LFL is 10.7%

Trading in the core UK business was strong, driven by continued investment in our digital platform and store opening programme. System sales in the UK increased by 10.5%, supported by the 21 new stores opened in the period, bringing the total year to date to 51. Of these, 34 were stores where the trading area was split between units. Working with our franchisees on their store openings remains one of the key planks of our strategy, with our current total of 920 stores still leaving substantial growth capacity.

As indicated at our half year results, we are facing some very tough comparators in the second half of the year, with LFLs in Q3 2015 at 14.9% and Q3 2016 at 3.9%. Our two year LFL sales growth in Q3 was robust at 19.4%.

System sales through digital channels were strongly ahead, up 18.1% compared to Q3 last year. Over 81% of delivered sales in the year to date have been online, with 64% placed through the app or mobile website.

We continue to be encouraged by the third quarter results in Ireland where the strong LFL sales growth of 7.6% is benefitting from the increasing trend towards digital ordering and the growing economy.

In Switzerland, total sales have increased by 16.7%. This increase came despite being unable to offer carry-out due to a local licensing issue in two stores. Excluding these, we showed strong LFL sales growth of 7.6%, although with them included, LFL sales were flat. We expect this license issue to be resolved soon.

Iceland and Norway continue to perform strongly in the period with system sales growth of 17.5% and 124.8% respectively. Expansion continues with one store opened in Iceland and three new units in Norway in the year. We expect to open our first Swedish store before the end of the year.

The German JV continues to perform in line with expectations.

Outlook

The comparatives remain challenging, but the continued strong sales performance means the Board is confident our forecast full year results will be in line with market expectations.

Given the strong new store performance of the business in the third quarter, we raise our UK openings expectation from 70 to up to 80 new outlets in 2016.

Commenting on the results, Chief Executive Officer David Wild, said:

"The business continues to trade well with a strong sales uplift across the Group during the period. As highlighted at our interim results in July, we face tough comparatives in the second half of the year, but our continued investment in e-commerce, our international expansion and the launch of our new Italiano range taking us to new customers, will help to drive performance for the remainder of the year. Our new store programme provides a strong platform for future growth.

"On 10(th) October we welcomed to the group Rachel Osborne as an executive director and Chief Financial Officer of the Company.

"We shall provide a more detailed update on our long term plans at our Capital Markets Day in London on 24(th) November 2016."

For further information, please contact:

Domino's Pizza Group plc:

 
 David Wild, Chief Executive 
  Officer                       020 7379 5151 
 

Maitland:

 
 James Devas, Robbie Hynes    020 7379 5151 
 

Conference Call

There will be a conference call for investors and sell-side analysts at 8.30am today. The participant dial-in is [phone]. The PIN is 6802111#. A recording of the call will also be available afterwards at http://corporate.dominos.co.uk/

This information is provided by RNS

The company news service from the London Stock Exchange

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October 12, 2016 02:00 ET (06:00 GMT)