Domino's Pizza delivers first quarter growth

-Adds broker comment

Domino's Pizza Group has delivered tasty first quarter numbers, with like-for-like sales ahead 6.6 per cent thanks to new products such as its Hot Dog Stuffed Crust.

Overall sales across the UK, Ireland, Germany and Switzerland rose 12.3% to £164.1m in the first three months of 2013 despite potential disruption from snowy conditions thanks to short-time promotional activity and weak comparatives in the previous year.

The roll-out of new stores continues apace, with five opened in the UK and one in Germany, with a further 60 planned for the UK this year and 18 more in Germany.

Margins are likely to be benefiting from the growth in online sales, with ecommerce rising from 49.8% to 61.9% of all UK delivered sales.

Sales received through all online platforms were up 38.4% to £82.4m, with a quarter of this figure derived from mobile devices.

Chief Executive Officer Lance Batchelor said: "Domino's continues to show that there are still significant opportunities in our core UK and Republic of Ireland markets as well as the new territories of Germany and Switzerland, and we are in a great position to seize those opportunities."

Like-for-like sales in the six mature German stores were up 40.3% in the period from just 3.7% last year, with the 10 Swiss stores up 9.3% as a new training regime begins.

Batchelor added that the ongoing economic pressures were "leading to a tough trading environment" and as well as food cost increases coming through during the year.

Moreover, he noted that the company faced "extremely tough" comparatives in the second quarter, as 2012 saw the group enjoy the the wettest second quarter on record, and the benefits of the Queen's Diamond Jubilee celebrations and the Euro 2012 football tournament.

He concluded: "I expect, at this early stage in the year, that trading will be in line with market expectations for 2013". Consensus forecasts for the current year stand at £51.2m pre-tax profits and 23.9p earnings per share.

Analyst Simon French at Panmure Gordon was encouraged by the progress the group is making in Germany but said "it will be 2015 before the country moves into profit" there.

OH

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