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Domino’s Pizza U.K. First-Half Profit Rises on Internet

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July 25 (Bloomberg) -- Domino’s Pizza U.K. and Ireland Plc, the U.K.’s biggest pizza-delivery company, said first-half profit rose 7.4 percent, led by Internet sales.

Net income was 13 million pounds ($21 million), or 8.08 pence per share, in the 26 weeks ended June 26, from 12.1 million pounds, or 7.62 pence a share, a year earlier, the Milton Keynes, England-based company said in a statement.

Internet sales gained 51 percent, to 85 million pounds. The company got 42 percent of its revenue on the web, up from 33 percent a year earlier, and each online order was as much as 15 percent larger on average, according to Chief Financial Officer Lee Ginsberg.

“We had a very strong first half and will have strong momentum going into the second,” Ginsberg said in a telephone interview. “We’ll have TV and lots of promotional support.”

Domino’s said it opened a net 21 outlets in the half, giving it a total of 688.

The shares rose 23.3 pence, or 5.1 percent, to 482.4 pence in London. They have fallen 13 percent so far this year, giving the company a market value of 781.5 million pounds.

Domino’s will triple its marketing expenditure in the second half from a year earlier, as it begins promoting a new gourmet pizza line on “Red or Black,” a television game show backed by “X Factor” creator Simon Cowell. Full-year marketing expenditure will increase to 45 million pounds, up from last year’s 40 million pounds, Ginsberg said.

Same-Outlet Sales

First-half sales at outlets open at least a year gained 2.4 percent, slowing from 13.7 percent in the year-earlier period. Such sales declined in Ireland in that country’s economic slump.

Domino’s said such sales should accelerate in the rest of the year, partly because comparisons with last year will become easier.

In April, Domino’s acquired a majority interest in the master German franchisee, and the company plans to open at least 400 outlets in Germany in the next 10 years. German demographics suggest the country could support as many as 1,700, Ginsberg said.

Domino’s raised its dividend by 22.2 percent to 5.5 pence.

To contact the reporter on this story: David Altaner in London at daltaner@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge in London at Ckeatinge@bloomberg.net

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