Profits surge at pizza chain
Pizza chain Domino’s yesterday reported a 33 per cent rise in first-half profits, as cash-strapped customers save money by getting a takeaway instead of dining in a restaurant.
The country’s largest pizza delivery firm said that pre-tax profit for the first half of the year was £10.9m, compared to £8.2m last year while sales at the company’s 526 outlets rose by 19.5 per cent to £170.2m.
Domino’s has also increased its marketing spend, with funds set aside for advertising lifted to £18m compared to £13.5m the year before. Part of this was used to secure high profile sponsorships of Sky 1’s The Simpsons and ITV’s Britain’s Got Talent.
Lee Ginsberg, chief financial officer at Domino’s, said that customers were trading down from restaurants because of economic pressures.
Domino’s opened 25 new stores in the first half of this year, which it says are trading well, and plans to open around 50 a year until it has 1,000 outlets – virtually doubling its footprint.
The pizza delivery firm said that it faces “very strong” comparatives in the second half of the year, but maintained that it could still achieve strong growth in sales and profits, and is well-placed.
“If the first half trading momentum continues into the second half then we see scope for further 2008 and 2009 upgrades,” said Numis analyst Richard Carter.
