Domino’s profit jumps as online sales continue to surge

Pizza group Domino's said profits rose in the first half of the year as its UK and Ireland business put in a strong performance.

The company recorded underlying pre-tax profit of £60.8 million (€71.3 million), almost 28 per cent up on the same period a year earlier, as the core business remained strong and Covid-19-related costs fell. Profit after tax more than doubled from £19 million to £41.3 million in the first six months of the year.

System sales, which includes all sales made by both franchised and corporate stores to consumers, were £752.3 million for the period, up 19.6 million. Domino’s saw some benefit from the Euro 2020 tournament during the period.

The digital business continued to surge for the pizza group, with online sales accounting for 80 per cent of its Irish business in the first half of 2021. That was a two percentage point increase on the same period in 2020.

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In the UK, online sales were up by a quarter per cent to account for 93 per cent of system sales, or 96 per cent of delivery sales.

Total orders were up 3.5 per cent, as collection orders rose 27.1 per cent. Covid-19 restrictions saw the collection business closed for much of the second quarter in 2020. Collection orders traded at 71 per cent of 2019 levels during the half.

Investment

"We have continued to invest in the business as we focus on delivering our strategy with the opening of a new state-of-the-art supply chain centre in Scotland, the launch of our redesigned mobile ordering app, and the roll out of our supercharged marketing campaign, which has strengthened our brand and significantly boosted awareness levels," said chief executive Dominic Paul.

“The strong trading in the first half of the year provides us with the firm foundations for the delivery of our strategic growth objectives, which build upon our strengths in both delivery and collection. This will enable us to deliver strong system sales growth and increase our store numbers in the UK and Ireland.

Domino’s also expanded its share buyback programme, adding £35 million to its existing £45 million buyback.

Looking ahead, Mr Paul noted the ongoing uncertainty in the wider market, but said Domino’s had started the second half of the year well.

“I believe our agile business model leaves us well placed to capitalise on the significant opportunities ahead, while continuing to invest in our strategy, which will deliver benefits for franchisees and shareholders alike.”