Domino’s to expand Irish unit despite slowing sales

Domino’s to expand Irish unit despite slowing sales

By Geoff Percival

Domino’s Pizza is set to open another two outlets here before the end of the year, taking the number of restaurants/delivery outlets it operates in Ireland past 50.

The quick-service restaurant chain said it remains on track for group underlying pre-tax profit of £95.9m (€107m) and £101.4m this year despite the cost of overseas investments damaging its first half profits. Underlying pre-tax profits amounted to £96.2m last year.

Sales in Ireland increased 2.5% in a year in the first half but slowed considerably due to this year’s wildly changeable weather conditions.

Sales rose over 10% in the corresponding period last year.

“Our first campaign of the year impacted on value perception, which has not yet been recovered. In addition, prolonged periods of adverse weather have also affected sales.

“Online continues to grow strongly, with sales up 15.1% in the first half, and the [Irish] market remains highly profitable for the group and our franchisees,” it said.

In the last month Domino’s has opened its 50th outlet in Ireland, opening an outlet in Ringsend in Dublin. The company plans to open two more in the second half of the year.

Group sales for Domino’s covering the UK, Ireland, Switzerland, Iceland, Norway and Sweden increased 22.6% in a year to £259.1m in the first half.

However, profits were weighed down by investments overseas, sending Domino’s shares down almost 12% to a more than 11-month low.

The company has been investing in its online operations, which accounts for 79% of UK sales and over 55% of Irish sales.

In addition, Domino’s has been focusing on its overseas operations, specifically Norway, where costs have eaten into profits.

First-half, group pre-tax profit increased 2.5% to £45.7m, offset by investments in Norway and Sweden, and rising interest costs from higher debt, the company said.

However, international sales rose especially in Norway which recorded sales growth of more than 180%.

Additional reporting Reuters

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