Domino's shrugs off 'World Cup' effect to boost half-year sales

The UK's demand for pizza remains undimmed this year as Domino's revealed profits were up 15 per cent and management shrugged off fears that its popularity was on the wane.

The fast-food group forecast a strong second half and added that its plan to go digital was continuing to gain ground.

Domino's reported yesterday that pre-tax profits were up to £20.1 million in the 26 weeks to 26 June, up from £17.5m a year earlier. This came despite revenue growth slowing to 2.4 per cent.

Its outgoing chief executive Chris Moore hailed the performance of Britain's biggest pizza delivery company against "one of the toughest starts to the year" for some time. He pointed to an especially tough comparison with a year earlier when the football World Cup had boosted sales. Other issues included the tough economic climate as "people realised they have less money in their pay packet" as well as the warm weather which sends potential customers out of the house.

Geetanjali Sharma, an analyst at Execution Noble, said: "There have been concerns around the like-for-like slowdown and maturity in the business model. However, today's results should go some way in alleviating these concerns."

Mr Moore said that without the World Cup effect in the second half, revenue growth should improve. The company will also triple its marketing budget over a year earlier, which includes the sponsorship of Britain's Got Talent, and launch new types of pizza.

He pointed out the group was "close to the tipping point" as it grew its online business to 48.5 per cent of sales. It is working towards two-thirds of sales being generated online by 2015.

Mr Moore is set to quit the group some time next year, to be replaced by Lance Batchelor, a non-executive at the group and former head of Tesco Mobile. The company would not give an exact departure date yesterday.

The company has a total of 688 stores across the UK and has pledged to continue expanding, and will hit its target of 60 new stores in 2011.

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