Half Yearly Report

RNS Number : 2284U

Domino's Pizza Group PLC

28 July 2015

 

DOMINO'S PIZZA GROUP plc

INTERIM RESULTS FOR THE 26 WEEKS ENDED 28 JUNE 2015

Digital driving further growth at Domino's

Domino's Pizza Group plc ("Domino's", "DPG", the "Company" or the "Group"), the leading pizza company, announces its results for the 26 weeks ended 28 June 2015.

Financial Highlights	26 Weeks Ending 28 June 2015	26 Weeks Ending 29 June 2014	Change
System Sales 1	£426.7m	£375.0m	+14%
UK Like-for-Like Sales 2	£378.8m	£343.4m	+10%
Underlying 3Operating profit	£32.1m	£24.7m	+30%
Underlying Basic EPS	15.3p	11.6p	+32%
Net cash/(debt) balance	£19.2m	£(3.7)m	+£22.9m
Interim Dividend per share	9.00p	7.81p	+15%
Statutory Revenue 4	£157.3m	£145.6m	+7%
Statutory Profit After Tax	£25.4m	£19.7m	+29%

1. System sales represent the sum of all sales made by both Franchisee and Corporate stores in the United Kingdom, Republic of Ireland, Germany and Switzerland to consumers

2. Like-for-like sales are defined as sales from stores that were opened before 29 December 2013, compared to the corresponding 26 week period in 2014

3.Underlying is defined as excluding amounts in relation to onerous leases, impairments, acquisition of joint ventures, associates and subsidiaries, and other restructuring and one-off items, as reconciled on the income statement

4. Statutory revenues represent revenues directly attributable to DPG being derived from monies paid by Franchisees for foodstuffs together with royalty payments for use of the Domino's brand, rental income from freehold and leasehold property and corporate store sales in Germany and Switzerland

Highlights

·     UK market continues to underpin growth with another half of double-digit LFL sales

·     Successful new opening store programme

o  21 (2014: 8) stores opened in the period

o  System sales per store almost 12% ahead

·     Continued success of digital investment programmes in the UK

o  e-commerce system sales ahead by 24.4%

o  App based sales now represents the largest distribution channel driving 51.6% of online sales

·     Significant increase in franchisee profitability

o  EBITDA performance up from 12.9% to 15.1% ⁵

·     Improving performances in international businesses

o  Economic recovery and operational improvements in ROI

o  Losses in Germany narrowed from £4.7m to £1.8m

o  New corporate stores opened in Switzerland

·     Group underlying operating profit and EPS up by 30%

·     Strong cash flow and cash conversion - net cash of £19.2m

5. Franchisee data submissions to end of June 2015 based on stores opened before 31 December 2013

Commenting on the results, Chief Executive Officer David Wild, said:

"We've had a strong first half, driven by an excellent performance in our core UK business, which has again recorded double digit like-for-like sales growth. Our international operations have also shown improvements compared to last year.

Our success in the UK is a result of the investment we have made in market-leading e-commerce initiatives. Our App has now been downloaded over 10 million times and our App sales have overtaken desktop sales for the first time.

The 21 new stores opened in the period are performing better than ever. Our roll out is well supported by our franchisees, who are benefiting from increased profitability and are seeing a good reaction from the UK consumer to our bundle deals and other initiatives.

Whilst we are pleased with our performance in the first half, we face tougher comparators in the rest of the year. We have a continued programme of e-commerce initiatives and other marketing campaigns. The UK new store pipeline is solid and we are well-positioned for the future."

For further information, please contact:

Domino's Pizza Group plc
David Wild, Chief Executive Officer	020 3128 8100
Paul Doughty, Chief Financial Officer	020 3128 8100
MHP Communications
Tim Rowntree, Simon Hockridge, Naomi Lane	020 3128 8100
Numis Securities Limited
David Poutney, James Serjeant	020 7260 1000

A presentation to analysts will be held at 09.30 on 28 July 2015 at Numis Securities Ltd, The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT.

Notes to Editors:

Domino's Pizza Group plc is the leading player in the fast-growing pizza market and holds the exclusive master franchise to own, operate and franchise Domino's Pizza stores in the UK, Republic of Ireland, Germany, Switzerland, Liechtenstein and Luxembourg. The first UK store opened in Luton in 1985 and the first Irish store opened in 1991. In April 2011, the Group acquired a majority stake in the exclusive master franchise to own, operate and franchise Domino's Pizza stores in Germany (now fully owned). In September 2012, the Group acquired the master franchise for Switzerland, Luxembourg and Liechtenstein.

As at 28 June 2015, the Group had the following stores:

	UK	ROI	Germany	Switzerland	Total
As at 28 December 2014	813	48	22	11	894
New store openings	21	0	0	3	24
Store closures	0	1	1	0	2
As at 28 June 2015	834	47	21	14	916

Founded in 1960, Domino's is one of the world's leading pizza brands. Through its primarily franchised system, it operates a global network of more than 11,000 stores in over 70 international markets. Domino's has a singular focus - pizza made freshly to order with high quality ingredients.

Customers in the UK can order online at www.dominos.co.uk, in the Republic of Ireland at www.dominos.ie, in Germany at www.dominos.de and in Switzerland at www.dominos.ch. In addition, mobile customers can order by downloading Domino's free iPhone, iPad and Android Apps.

For photography, please visit the media centre at corporate.dominos.co.uk, contact the Domino's Press Office on [phone], or call MHP on [phone]

Overview

We have delivered a strong set of results for the 26 weeks ended 28 June 2015 ("the period"). The Group has continued to achieve double-digit system sales growth of 13.8% as Group system sales increased by £51.7m to £426.7m. This generated an increase of 29.9% (£7.4m) in underlying operating profit over the period through continued efficiencies in the UK and Republic of Ireland ('ROI') operations and a focus in Germany on store economics, which saw losses in the period reduced from £4.7m in 2014 to £1.8m. Cash conversion remains a key strength of the business and the Group closed the period with net cash balances of £19.2m (29 June 2014: net debt of £3.7m).

The momentum in the business gives the Board confidence in the full year outcome.

Financial Performance

The Group operates across a number of territories. The key performance indicators are shown below alongside the relative performance within each of the territories.

		28 June 2015		29 June 2014		Variance (%)
System Sales (£'m)		426.7		375.0		13.8
UK		397.0		344.7		15.2
ROI		20.0		20.9		(4.3)
Germany		4.1		4.7		(12.8)
Switzerland		5.6		4.7		19.1
Like-for-like sales growth1
UK		10.3%		11.3%
ROI		6.5%		3.2%
Germany		3.0%		(1.7)%
Switzerland		2.8%		2.9%
Underlying2  Operating Profit/(Loss) (£'m)		32.1		24.7		29.9
UK & ROI		34.6		29.8		16.0
Germany		(1.8)		(4.7)		61.7
Switzerland		(0.7)		(0.4)		(75.0)
Underlying Basic EPS (pence)		15.3		11.6		31.9

1. In local currency

2. Underlying is defined as excluding amounts in relation to onerous leases, impairments, acquisition of joint ventures, associates and subsidiaries, and other restructuring and one-off items, as reconciled on the income statement

UK & ROI

UK

The UK business delivered another set of excellent results over the half from the 834 stores that were trading at the period end (29 June 2014: 780). System sales were 15.2% ahead driven by a strong like-for-like performance with growth of 10.3%.  Like-for-like order volumes were ahead by 7.4% whilst average basket size grew by 2.9%, helped by bundle deals aimed at value-for-money for the family.

Underlying the strong UK performance have been the three key drivers set out in our preliminary results announcement in February this year.

1.    e-commerce - we have continued to invest in our digital offering driving an increased number of customer visits, improved conversion rates and higher order values.

2.    New Store Openings - The rate of store openings accelerated in the period and the UK opened 21 stores (29 June 2014: 8) and these continue to perform ahead of previous years providing a foundation for future growth confirming our long term growth opportunity.

3.    Franchisee Profitability - The Group has continued to focus on franchisee profitability by passing on cost savings and in enthusing them to invest in further growth.

The Group has improved its e-commerce platforms, investing an additional £1.4m compared to last year. In the UK they now represent 77.0% of all delivered sales, up from 69.7% in the prior period, with App based sales accounting for 51.6% of online sales, representing our largest distribution channel. The UK business is now truly digital enabled.

Digital channels deliver a number of benefits for both the consumer and our Franchisees.  From a consumer perspective, orders are more accurate and offers more easily accessed, ensuring that they get the best value. Franchisees benefit through store labour efficiencies and being better able to target local marketing campaigns, particularly through eCRM.

The results of this strategy are clear, with online orders in the UK 21.8% ahead and average order value 2.1% ahead of the prior period. App based sales continues to drive much of our success, with orders 63.3% ahead and order value 2.5% ahead. Ten million consumers have now downloaded our Mobile App in the UK.

Although we have a first class digital platform, there remains a lot of headroom to improve the customer experience further. In particular, our mobile web offering has been upgraded and improved in July 2015 with a new responsive design. This is an approach to design aimed at crafting sites to provide an optimal viewing and interaction experience-easy reading and navigation with a minimum of resizing, panning, and scrolling-across a wide range of devices (from desktop computer monitors to mobile phones). This enhances the usability for consumers on mobile devices, accessing the website improving engagement, conversion and ultimately sales and profitability. Early results have been encouraging.  Over the half year we have also remained focused on simplifying the ordering process, allowing consumers to order food quickly through a few clicks on our website or mobile App. We have already introduced 'saved payments', using secure software which enables consumers to pay without re-entering their details. We will work in the second half of the year to deliver saved favourite baskets all towards the ultimate aim of 'one touch' ordering.

We also have continued to innovate our product range, introducing interesting and new initiatives.  During the period we launched 'Pizza Legends', giving consumers the ability to 'create their own' pizza. This was supported by a dedicated advertising campaign, supported by both online and offline media as well as franchisee local marketing.  This has proved extremely popular and to date consumers have devised approximately 280,000 different pizzas.

The 'basket' composition has continued to evolve in the UK, as the Group has focused on providing value orientated, full meal solutions to families through bundle offers. Pizza volumes are 6.1% ahead, side orders 8.4% ahead whilst dessert and drink volumes are 24.0% and 43.1% ahead of the prior period respectively. The profitability of drinks and some desserts are much lower as they are delivered to stores by the major brands on behalf of Franchisees. The Group will continue to seek to provide a complete meal to families moving forward.

During the period, the UK opened 21 new stores (29 June 2014: 8). The performance of the new stores has been very pleasing, with average weekly unit sales ('AWUS') 11.8% ahead of similar openings in the prior period. These include both virgin territories and those existing areas which have been 'split', increasing density, improving service for customers, and increasing sales and profitability for the Franchisees.  10 of the 21 stores opened during the period were splits. The success of 'splitting' is expected to drive further store openings in urban areas. We expect to open at least 50 stores over the full year and have a very strong pipeline of identified sites for further openings. 4 'Extra' stores were closed during July 2015, which were located at a number of service stations in the UK. The format was initially launched as a trial in 2013 but has not proved popular with customers. A full provision was made in 2014 for the costs associated with closing these stores.

Our Franchisees sit at the heart of everything we do. They have both driven and shared in our success. The Group is committed to ensuring they are successful, and during the period we have seen their relative profitability rise through their own efficiencies and marketing efforts, but also through the benefit of lower food prices secured by the  Group. During the period, the Group passed on savings in the region of £6m from lower food costs in cheese and dough. Moving forward for the balance of the year, the Group does not anticipate significant price changes in its food prices from its suppliers.

Republic of Ireland

ROI delivered a good set of results. The Group operates 47 stores (29 June 2014: 48) in ROI. Like-for-like system sales in local currency were ahead by 6.5%, but in sterling were 4.3% behind reflecting the relative strength of sterling against the euro. Sales have generally benefitted from the continued economic recovery in Ireland. Dublin in particular has performed very well.

Our digital channels continue to improve in ROI. Online sales are 29.2% ahead and now represent 51.0% of delivered sales, up from 43.1% in the prior period. App based growth continues to drive digital adoption and now accounts for 59.8% of online sales, up from 40.3% in the prior period.

We maintain a positive outlook in Ireland given the continued economic recovery and will look to open further stores in the coming months and years.

The UK and ROI business combined operations generated an increase of 16.0% in underlying profits against an increase in system sales of 14.1%. The improvement in operational gearing has been delivered largely through efficiencies in the supply chain and Head Office.

Germany

We have seen some improvement in the performance of our German operations. At the period end, the Group had 21 stores (29 June 2014: 26) of which 12 were corporate stores (29 June 2014: 13).  System sales for the period were 5.6m euros, which represents a decline of 1.7% on a constant currency basis. Like-for-like sales were, however, ahead by 3% in local currency.

Underlying operating losses in the period were reduced to £1.8m from £4.7m. At the 2014 period end, a review of receivables was undertaken relating to amounts due from Franchisees. As a result of this review, a charge of £2.3m was included in the prior period operating loss. At constant exchange rates, reported underlying losses in the current period would have been £0.2m lower.

The Group has continued to focus its efforts on local store economics, rationalising local store marketing, delivery area radius and labour costs in its corporate stores. This has driven both the increase in like-for-like sales, together in part with the reduced operating losses reported above.

Looking forward into the second half of the year, there remains much to do, but the first half of the year demonstrates some stemming of the losses in Germany.

Switzerland

We generated an increase in system sales of 17.6% or 14.0% in local currency to £5.6m (8.0m CHF). Like-for-like sales were 2.8% ahead in local currency. The Group operates 14 stores in Switzerland (29 June 2014: 10), which are all corporate.

Underlying operating losses for the period were £0.7m (2014: £0.4m).  The Group opened 3 new corporate stores during the period and, as expected, the investment in training, food and labour increased the reported loss for the period despite profits generated from existing stores having improved significantly. We remain encouraged by the improving performance of our existing stores, which provides a solid foot print for the future.

Taxation

Excluding the taxation effect of the non-underlying items in Note 5, the effective tax rate is 20.5% (2014: 23.0%), reflecting the impact of the decrease in the UK corporation tax rate from 23% to 21% from 6 April 2014, and from 21% to 20% from 6 April 2015. The effective tax rate including non-underlying items was 20.5% (2014: 21.1%). We are expecting the effective tax rate for the full year to be consistent.

Earnings per Share

Underlying basic earnings per share for the period was 15.3p, representing 31.9% growth over last year (2014: 11.6p). Underlying diluted earnings per share for the period was 15.2p, up 32.2% on the prior year (2014: 11.5p).

Statutory basic earnings per share for the period was 15.3p, up 27.5% on the prior year (2014: 12.0p). Statutory diluted earnings per share for the period of 15.2p was up 26.7% on the prior year (2014: 12.0p).

Cash Balance and Dividend

As at 28 June 2015 the Group had net cash of £19.2m (29 June 2014: net debt of £3.7m). The Group had total banking facilities of £35m, of which £26.7m was undrawn, and also had £30.1m of cash in hand.  The facilities include a £30m five-year facility attracting an interest rate of 135bpts over LIBOR, which expires on 10 August 2017, together with an overdraft of £5.0m, which remained undrawn at 28 June 2015.   The Directors are confident that the Group will continue to have sufficient liquidity and headroom.

Having reviewed the cash required by the business including capital expenditure requirements and the performance of the Group, the Board has decided to increase its interim dividend by 15% to 9.00p per ordinary share.

The ex dividend date is 6 August 2015 with a record date of 7 August 2015 and a payment date of 4 September 2015.

Outlook

We have had an excellent start to the year, with like-for-like sales up more than 10% in the UK.  While we are delighted with this performance, we face some very tough comparatives in the second half.  The Group is well positioned for the remainder of 2015. We are confident about the future. Our expectations for the current year remain unchanged.

A further statement on trading will be provided in the middle of October.

Forward-looking statements caution These half-yearly results, our Annual Results, Annual Report and the Domino's Pizza website may contain certain "forward-looking statements" with respect to Domino's Pizza Group plc and the Group's financial condition, results of operations and business, and certain of Domino's Pizza Group plc and the Group's plans, strategy, objectives, goals and expectations with respect to these items and the economies and markets in which Domino's Pizza Group plc operates. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", "due", "could", "may", "should", "expects", "believes", "intends", "plans", "targets", "goal" or "estimates". By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many of these assumptions, risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely. There are a number of such factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the legal, regulatory and competition frameworks in which the Group operates; changes in the markets from which the Group raises finance and changes in interest and exchange rates; the impact of legal or other proceedings against or which affect the Group; changes in accounting practices and interpretation of accounting standards under IFRS, and changes in our principal risks and uncertainties. Any written or verbal forward-looking statements, made in these half-yearly results, our Annual Results, Annual Report, or the Domino's website or made subsequently, which are attributable to Domino's Pizza Group plc or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Each forward-looking statement speaks only as of the date of these half-yearly results, our Annual Results, Annual Report, or on the date the forward-looking statement is made. Domino's Pizza Group plc does not intend to update any forward-looking statements.

 GROUP INCOME STATEMENT

						(Unaudited) 26 weeks ended 28 June 2015		(Unaudited) 26 weeks ended 29 June 2014 (restated)	52 weeks ended 28 December 2014
						£000		£000	£000
Revenue						3	157,328	145,584	294,378
Cost of sales							(95,953)	(92,694)	(184,645)
							----	----	----
Gross profit							61,375	52,890	109,733
Distribution costs							(9,367)	(8,088)	(16,465)
Administrative costs							(20,764)	(20,913)	(40,289)
							----	----	----
							31,244	23,889	52,979
Share of post tax profits of associates and joint ventures							868	389	1,047
							----	----	----
Operating profit							32,112	24,278	54,026
Other gains and losses							-	1,276	1,147
							----	----	----
Profit before interest and taxation							32,112	25,554	55,173
Finance income							153	179	620
Finance expense							(251)	(768)	(1,996)
							----	----	----
Profit before taxation							32,014	24,965	53,797
Taxation						7	(6,568)	(5,267)	(11,059)
							----	----	----
Profit for the period							25,446	19,698	42,738
							----	----	----
Profit for the period attributable to:
Owners of the parent							25,446	19,898	42,938
Non-controlling interests							-	(200)	(200)
							----	----	----
							25,446	19,698	42,738
							----	----	----
Earnings per share
- Basic (pence)						9	15.3	12.0	25.9
- Diluted (pence)						9	15.2	12.0	25.8
Non-GAAP measure: underlying profit before tax
Profit before tax							32,014	24,965	53,797
-       Onerous leases							-	(126)	492
-       Impairments							-	741	1,036
-       Other restructuring and one-off items							-	(162)	(102)
							----	----	----
Amounts included in operating profit							-	453	1,426
Other gains and losses							-	(1,276)	(1,147)
Discount unwind included in finance expense							-	356	722
							----	----	----
Underlying profit before tax							32,014	24,498	54,798
							----	----	----
Underlying operating profit							32,112	24,731	55,452
							----	----	----
Underlying earnings per share
-       Basic (pence)						9	15.3	11.6	26.6
-       Diluted (pence)						9	15.2	11.5	26.4

GROUP STATEMENT OF COMPREHENSIVE INCOME

		(Unaudited)	(Unaudited)
		26 weeks	26 weeks	52 weeks
		ended	ended	ended
		28 June	29 June	28 December
		2015	2014	2014
		£000	£000	£000
Profit for the period		25,446	19,698	42,738
Other comprehensive expense:
Exchange differences on retranslation of foreign operations		(994)	(199)	(188)
Other comprehensive expense for the period, net of tax to be reclassified to profit or loss in subsequent periods		(994)	(199)	(188)
Total comprehensive income for the period		24,452	19,499	42,550
Total comprehensive income for the period attributable to:
Owners of the parent		24,452	19,699	42,750
Non-controlling interests		-	(200)	(200)
		24,452	19,499	42,550

 

 

GROUP BALANCE SHEET
		(Unaudited)		(Unaudited)
		At	At	At
		28 June	28 December	29 June
	Notes	2015	2014 (Restated)	2014 (Restated)
		£000	£000	£000
Non-current assets
Intangible assets		11,003	10,561	10,733
Property, plant and equipment	10	57,135	57,374	57,766
Prepaid operating lease charges		1,058	1,072	1,099
Trade and other receivables		7,273	5,618	6,708
Net investment in finance leases		1,679	1,285	1,992
Investments in associates and joint ventures		7,558	7,170	6,547
Deferred tax asset		7,738	8,507	9,172
		93,444	91,587	94,017
Current assets
Inventories		5,437	4,826	4,568
Prepaid operating lease charges		214	198	195
Trade and other receivables		29,628	34,735	31,250
Net investment in finance leases		1,038	900	1,063
Cash and cash equivalents	6	30,134	33,743	43,611
		66,451	74,402	80,687
Total assets		159,895	165,989	174,704
Current liabilities
Trade and other payables		(41,906)	(47,523)	(38,878)
Deferred income		(4,686)	(4,584)	(4,381)
Financial liabilities	11	(1,093)	(16,054)	(16,112)
Deferred and contingent consideration		(5,685)	(3,841)	(1,590)
Current tax liabilities		(4,472)	(5,072)	(4,716)
Provisions		(1,010)	(1,270)	(1,760)
		(58,852)	(78,344)	(67,437)
Non-current liabilities
Trade and other payables		(381)	-	-
Financial liabilities	11	(9,836)	(6,731)	(31,233)
Deferred income		(2,976)	(2,938)	(2,814)
Deferred and contingent consideration		-	(2,483)	(5,268)
Deferred tax liabilities		(104)	(95)	(172)
Provisions		(1,733)	(2,000)	(1,224)
Total liabilities		(73,882)	(92,591)	(108,148)
Net assets		86,013	73,398	66,556
Shareholder's equity
Called up share capital		2,604	2,592	2,586
Share premium account		28,780	25,597	23,981
Capital redemption reserve		425	425	425
Capital reserve - own shares		(2,238)	(2,238)	(1)
Currency translation reserve		(422)	572	561
Retained earnings		56,864	46,450	39,004
Equity shareholder's funds		86,013	73,398	66,556

 

GROUP STATEMENT OF CHANGES IN EQUITY

		Share	Capital	Capital	Currency			Equity	Non-
	Share	Premium	Redemption	Reserve -	Translation	Other	Retained	Shareholder's	Controlling	Total
	Capital	Account	Reserve	Own shares	Reserve	Reserve	Earnings	Funds	Interests	Equity
	£000	£000	£000	£000	£000	£000	£000	£000	£000	£000
At 29 December 2013	2,570	20,156	425	(1)	760	3,432	37,236	64,578	(4,424)	60,154
Profit for the period	-	-	-	-	-	-	19,898	19,898	(200)	19,698
Other comprehensive expense - exchange differences	-	-	-	-	(199)	-	-	(199)	-	(199)
Total comprehensive income for the period	-	-	-	-	(199)	-	19,898	19,699	(200)	19,499
Proceeds from share issue	2	407	-	-	-	-	-	409	-	409
Issue of ordinary shares on acquisition of non-controlling interest	14	3,418	-	-	-	(3,432)	-	-	-	-
Share transaction charges	-	-	-	-	-	-	(142)	(142)	-	(142)
Tax on employee share options	-	-	-	-	-	-	649	649	-	649
Share options and LTIP charge	-	-	-	-	-	-	538	538	-	538
Equity dividends paid	-	-	-	-	-	-	(14,551)	(14,551)	-	(14,551)
Acquisition of non-controlling Interest	-	-	-	-	-	-	(4,624)	(4,624)	4,624	-
At 29 June 2014 (unaudited)	2,586	23,981	425	(1)	561	-	39,004	66,556	-	66,556
Profit for the period	-	-	-	-	-	-	23,040	23,040	-	23,040
Other comprehensive income - exchange differences	-	-	-	-	11	-	-	11	-	11
Total comprehensive income for the period	-	-	-	-	11	-	23,040	23,051	-	23,051
Proceeds from share issues	6	1,616	-	-	-	-	-	1,622	-	1,622
Purchase of own shares	-	-	-	(2,237)	-	-	-	(2,237)	-	(2,237)
Vesting of LTIP grants	-	-	-	-	-	-	(2,769)	(2,769)	-	(2,769)
Tax on employee share options	-	-	-	-	-	-	(257)	(257)	-	(257)
Share options and LTIP charge	-	-	-	-	-	-	361	361	-	361
Equity dividends paid	-	-	-	-	-	-	(12,929)	(12,929)	-	(12,929)
At 28 December 2014	2,592	25,597	425	(2,238)	572	-	46,450	73,398	-	73,398
Profit for the period	-	-	-	-	-	-	25,446	25,446	-	25,446
Other comprehensive expense - exchange differences	-	-	-	-	(994)	-	-	(994)	-	(994)
Total comprehensive income for the period	-	-	-	-	(994)	-	25,446	24,452	-	24,452
Proceeds from share issue	12	3,183	-	-	-	-	-	3,195	-	3,195
Share transaction charges	-	-	-	-	-	-	(9)	(9)	-	(9)
Share option and LTIP charge	-	-	-	-	-	-	664	664	-	664
Tax on employee share options	-	-	-	-	-	-	352	352	-	352
Equity dividends paid	-	-	-	-	-	-	(16,039)	(16,039)	-	(16,039)
At 28 June 2015 (unaudited)	2,604	28,780	425	(2,238)	(422)	-	56,864	86,013	-	86,013

 

 

 

GROUP CASHFLOW STATEMENT

	(Unaudited) 26 weeks ended	(Unaudited) 26 weeks ended	52 weeks ended
	28 June 2015	29 June 2014 (Restated)	28 December 2014 (Restated)
Cash flows from operating activities	£000	£000	£000
Profit before taxation	32,014	24,965	53,797
Net finance costs	98	589	1,375
Share of post tax profits of associates	(868)	(389)	(1,047)
Amortisation and depreciation	3,027	2,693	5,824
Impairment	47	741	1,036
Loss / (profit) on disposal of non-current assets	36	194	(1,147)
Release of contingent consideration	-	(1,082)	-
Share option and LTIP charge	664	538	899
(Increase)/decrease  in inventories	(641)	(344)	(616)
Decrease /(increase) in receivables	2,144	2,263	(1,626)
(Decrease)/increase  in payables	(5,275)	3,140	11,447
Increase/(decrease) in deferred income	140	(301)	(339)
Decrease  in provisions	(546)	(1,384)	(1,100)
Cash generated from operations	30,840	31,623	68,503
UK corporation tax paid	(5,273)	(2,672)	(7,499)
Overseas corporation tax paid	(28)	(298)	(612)
Net cash generated by operating activities	25,539	28,653	60,392
Cash flows from investing activities
Interest received	81	496	186
Dividends received from associates	62	-	45
Decrease in loans to associates and joint ventures	245	264	582
Decrease in loans to franchisees	1,305	1,745	3,275
Payments to acquire finance lease assets	(697)	(953)	(741)
Receipts from repayment of franchisee finance leases	580	490	1,121
Purchase of property, plant and equipment	(2,342)	(1,774)	(4,412)
Deferred consideration for Domino's Leasing Limited	(631)	(615)	(1,208)
Purchase of other non-current assets	(2,555)	(1,123)	(2,532)
Receipts from the sale of non-current assets	-	(265)	1,059
Settlement of deferred consideration	-	-	(132)
Net cash used by investing activities	(3,952)	(1,735)	(2,757)
Cash inflow before financing	21,587	26,918	57,635
Cash flow from financing activities
Interest paid	(183)	(671)	(807)
Issue of ordinary share capital	3,195	409	2,038
Purchase of own shares	-	-	(2,243)
Payments under LTIP schemes	(7)	(140)	(2,914)
New bank loans and facilities draw down	3,765	2,685	31,912
Repayment of borrowings	(15,595)	(2,576)	(56,253)
Equity dividends paid	(16,039)	(14,551)	(27,480)
Net cash used by financing activities	(24,864)	(14,844)	(55,747)
Net increase in cash and cash equivalents	(3,277)	12,074	1,888
Cash and cash equivalents at beginning of period	33,743	31,597	31,597
Foreign exchange (loss) / gain on cash and cash equivalents	(332)	(60)	258
Cash and cash equivalents at end of period	30,134	43,611	33,743

 

 

NOTES TO THE GROUP INTERIM REPORT

1.   GENERAL INFORMATION

Domino's Pizza Group plc (the "Company") is a public limited company incorporated in the United Kingdom under the Companies Acts (registration number 03853545).  The Company is domiciled in the United Kingdom and its registered address is Domino's Pizza Group plc, 1 Thornbury, West Ashland, Milton Keynes, MK6 4BB.  The Company's ordinary shares are traded on the London Stock Exchange.   Further copies of the Interim Report and Annual Report and Accounts may be obtained from the address above.

2.   BASIS OF PREPARATION

This interim report has been prepared in accordance with IAS 34 'Interim Financial Reporting'. The financial information contained in this interim report does not constitute statutory accounts as defined by Section 435 of the Companies Act 2006.

The interim results for the 26 weeks ended 28 June 2015 and the comparatives to 29 June 2014 are unaudited, but have been reviewed by the auditors. A copy of their review report has been included at the end of this report.

The financial information for the 52 weeks ended 28 December 2014 has been extracted from the Group financial statements for that period.  These published financial statements were reported on by the auditors without qualification or an emphasis of matter reference and did not include a statement under section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

In the Group's 2014 Annual Report sales and cost of sales for the 52 weeks ended 29 December 2013 were re-presented for the Switzerland segment to more accurately present the classification of internal sales. The corresponding re-presentation for the 26 weeks ended 29 June 2014 has resulted in an adjustment between revenue and cost of sales for £1,164,000 and does not have a profit impact on either the operating results of the segment or the Group as a whole (see note 4).

As at 29 June 2014 quarterly rent in advance received from franchisees of £4,297,000  (28 December 2014: £4,548,000) has been reclassified within current deferred income to better represent the nature of the liability, having previously been disclosed as part of trade and other payables.

As at 29 June 2014 some credit balances in respect of rent-free periods received from landlords and payable to franchisees have been restated resulting in an increase of £876,000 (28 December 2014: £1,039,000) in non-current deferred income and £198,000 (28 December 2014: £247,000) in current deferred income; previously £876,000 (28 December 2014: £1,039,000) of these amounts were netting within non-current trade and other receivables and £198,000 (28 December 2014: £247,000) in current trade and other receivables. These adjustments had no effect on the income statement of the respective periods.

The interim financial information has been prepared on the going concern basis. This is considered appropriate, given the considerable financial resources of the Group including the current position of the banking facilities, together with long-term contracts with its master franchisor, its franchisees and its key suppliers.

The interim financial information is presented in sterling and all values are rounded to the nearest thousand pounds (£000), except when otherwise indicated.

Changes in accounting policy

The consolidated accounts for the 52 weeks ended 28 December 2014 were prepared in accordance with IFRS as adopted by the EU. The accounting policies applied by the Group are consistent with those disclosed in the Group's Annual Report and Accounts for the 52 weeks ended 28 December 2014. There are no new standards and interpretations effective for the first time in 2015 that have a material impact on this interim report.

3.   REVENUE

Revenue recognised in the income statement is analysed as follows:

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	ended
	28 June	29 June	28 December
	2015	2014 (restated)	2014
	£000	£000	£000
Royalties, corporate store sales and sales to franchisees	149,506	137,226	277,305
Rental income on leasehold and freehold property	7,746	8,296	16,945
Finance lease income	76	62	128
	157,328	145,584	294,378

4.   SEGMENT INFORMATION

For management purposes, the Group is organised into four geographical business units based on the territories governed by the Master Franchise Agreements ("MFA"): the United Kingdom, Ireland, Germany and Switzerland. These are considered to be the Group's operating segments as the information provided to the Executive Directors of the Board, who are considered to be the chief operating decision makers, is based on these territories. Revenue included in each includes all sales (royalties, Supply Chain Centre sales, rental income and finance lease income) made to franchise stores and sales by corporate stores located in that segment. Segment results for the Ireland segment include both the Republic of Ireland and Northern Ireland as both of these territories are served by the same Supply Chain Centre.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss. Group financing (including finance costs and finance revenue) and income taxes are managed on a group basis and are not allocated to operating segments.

Unallocated assets include cash and cash equivalents and taxation assets. Unallocated liabilities include the bank revolving facility, bank loans, deferred consideration and taxation liabilities.

Following the representation of sales and cost of sales in the Group's Annual Report and Accounts for the 52 weeks ended 28 December 2014 for the Switzerland segment, a representation has now been made for the 26 weeks ended 29 June 2014 for the Switzerland segment to more accurately present the classification of internal sales. This has resulted in an adjustment between revenue and cost of sales for £1,164,000 and does not have a profit impact on either the operating results of the segment or the Group as a whole.

Operating Segments

	(Unaudited) 26 weeks ended 28 June 2015
	Switzerland	Germany	Ireland	United Kingdom	Total
	£000	£000	£000	£000	£000
Segment revenue
Sales to external customers	5,541	2,852	10,495	138,440	157,328
Results
Segment result	(670)	(1,800)	2,618	31,096	31,244
Non-underlying items	-	-	-	-	-
Share of profit of associates	-	-	-	868	868
Group operating profit	(670)	(1,800)	2,618	31,964	32,112
Net finance costs					(98)
Profit before taxation					32,014
Assets
Segment assets	9,340	1,737	2,800	100,587	114,464
Equity accounted investments	-	-	-	7,558	7,558
Unallocated assets					37,873
Total assets	9,340	1,737	2,800	108,145	159,895
Liabilities
Segment liabilities	1,699	4,744	1,224	47,622	55,289
Unallocated liabilities					18,593
Total liabilities	1,699	4,744	1,224	47,622	73,882

	(Unaudited) 26 weeks ended 29 June 2014 (restated)
	Switzerland	Germany	Ireland	United Kingdom	Total
	£000	£000	£000	£000	£000
Segment revenue
Sales to external customers	4,723	3,239	10,716	126,906	145,584
Results
Segment result	(386)	(4,714)	2,502	26,940	24,342
Non-underlying items		(208)	-	(245)	(453)
Share of profit of associates	-	-	-	389	389
Group operating profit	(386)	(4,922)	2,502	27,084	24,278
Profit on sale of non-current assets					194
Other gains and losses					1,082
Net finance costs					(589)
Profit before taxation					24,965
Assets
Segment assets	7,162	4,089	3,501	100,622	115,374
Equity accounted investments	-	-	-	6,547	6,547
Unallocated assets					52,783
Total assets	7,162	4,089	3,501	107,169	174,704
Liabilities
Segment liabilities	1,464	3,057	1,010	46,074	51,605
Unallocated liabilities					56,543
Total liabilities	1,464	3,057	1,010	46,074	108,148

Operating Segments

		52 weeks ended 28 December 2014
	Switzerland		Germany	Ireland	United Kingdom	Total
	£000		£000	£000	£000	£000
Segment revenue
Sales to external customers	9,590		5,687	21,461	257,640	294,378
Results
Segment result	(1,019)		(7,348)	5,034	57,738	54,405
Non-underlying items	-		(957)	(863)	394	(1,426)
Share of profit of associates	-		-	-	1,047	1,047
Group operating profit	(1,019)		(8,305)	4,171	59,179	54,026
Other gains and losses	949		-	-	198	1,147
	(70)		(8,305)	4,171	59,377	55,173
Net finance costs						(1,376)
Profit before taxation						53,797
Assets
Segment assets	8,077		1,940	3,395	103,157	116,569
Equity accounted investments	-		-	-	7,170	7,170
Unallocated assets						42,250
Total assets	8,077		1,940	3,395	110,327	165,989
Liabilities
Segment liabilities	1,532		4,692	1,706	52,723	60,653
Unallocated liabilities						31,938
Total liabilities	1,532		4,692	1,706	52,723	92,591

5.     ITEMS EXCLUDED FROM NON-GAAP MEASURE: UNDERLYING PROFIT BEFORE TAX

 

(a) Included within operating profit

	26 weeks	26 weeks	52 weeks
	Ended	ended	ended
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Onerous leases	-	(126)	492
Corporate stores		302	-
Property, plant and equipment		439	1,036
Impairments	-	741	1,036
Restructuring and reorganisation costs		(162)	(102)
Other restructuring and one-off items	-	(162)	(102)
	----	----	----
	-	453	1,426
	----	----	----

Onerous Lease Provision

The credit in H1 2014 related to a net release of UK and Irish rent obligations.

Impairments

Impairments in H1 2014 related to store assets in Germany following restructuring activities that carried on into the first half of the year, and an unsuccessful new format (Extra stores) in the UK.

Other Restructuring and one-off items

The credit in H1 2014 related to the release of the unused part of the provision for German restructuring costs recognised in 2013.

 (b) Included below operating profit

Other gains and losses

In H1 2014, this included a £1.1m credit in relation to the release of contingent consideration in respect of Domino's Pizza Switzerland following final settlement with the vendor and a £0.2m credit in respect of the sale of store assets. 

Discount unwind on items included in finance expense

£nil net charge has been recognised in respect of discount unwind on items included in finance expense (29 June 2014: £0.4m).

6.   CASH AND CASH EQUIVALENTS

	(Unaudited)	(Unaudited)
	At	At	At
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Cash at bank and in hand	10,228	8,364	16,229
Short term deposits	19,906	35,247	17,514
	30,134	43,611	33,743

7.   INCOME TAX

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	ended
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Current income tax
Current income tax charge	5,616	5,033	10,043
Deferred income tax
Origination and reversal of temporary differences	952	234	1,802
Adjustments in respect of prior periods			(786)
Income tax expense	6,568	5,267	11,059

The calculation of the Group's tax position necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority.  The final resolution of certain these items may give rise to material income statement and or cash flow variances.

8.   DIVIDENDS PAID AND PROPOSED

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	ended
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Declared and paid during the period:
Final dividend for 2013 8.80p (2012: 7.90p)	-	-	14,551
Interim dividend for 2014 7.81p (2013: 7.10p)	-	-	12,929
Final dividend for 2014 9.69p (2013: 8.80)	16,039	14,551	-
	16,039	14,551	27,480

The directors declare an interim dividend of 9p per share of £14,924,000 (29 June 2014: 7.81p £12,855,000).

9.   EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share are calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	ended
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Profit for the period	25,446	19,698	42,738
Adjusted for - non-controlling interests	-	200	200
Profit attributable to owners of the parent	25,446	19,898	42,938

	(Unaudited) At	(Unaudited) At	At
	28 June	29 June	28 December
	2015	2014	2014
	No.	No.	No.
Reconciliation of basic and diluted weighted average number of shares:
Basic weighted average number of shares (excluding treasury shares)	165,823,987	165,084,656	165,471,079
Dilutive potential ordinary shares:
Share options	1,328,336	586,001	547,979
Reversionary interests	394,136	243,094	582,848
Diluted weighted average number of shares	167,546,459	165,913,751	166,601,906

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	Ended	Ended	ended
	28 June	29 June	28 December
	2015	2014	2014
Basic earnings per share (pence)	15.3	12.0	25.9
Diluted earnings per share (pence)	15.2	12.0	25.8

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these interim financial statements.

In addition, the performance conditions for share options granted over 262,070 (29 June 2014: 3,143,856; 28 December 2014: 1,087,596) shares have not been met in the current financial period and therefore the dilutive effect of the number of shares that would have been issued at the period end have not been included in the diluted earnings per share calculation.

Underlying earnings per share

The Group presents as non-underlying items below the income statement, those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better the trends in financial performance.

To this end, basic and diluted earnings from continuing operations per share is also presented on this basis and using the weighted average number of shares for both basic and diluted amounts as per the table above. The amounts for earnings per share from continuing operations on an underlying basis are as follows:

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	Ended
	28 June	29 June	28 December
	2015	2014	2014
Underlying basic earnings per share (pence)	15.3	11.6	26.6
Underlying diluted earnings per share (pence)	15.2	11.5	26.4

Underlying profit and attributable to equity holders of the parent is derived as follows:

	(Unaudited)	(Unaudited)
	26 weeks	26 weeks	52 weeks
	ended	ended	ended
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Profit for the period	25,446	19,698	42,738
Adjusted for - non-controlling interests	-	200	200
Profit attributable to owners of the parent	25,446	19,898	42,938
Amounts excluded from underlying profit - attributable to equity holders of the parent	-	(821)	1,026
Amounts included in operating profit	-	453	1,426
Other gains and losses	-	(1,276)	(1,147)
Discount unwind	-	356	722
Taxation impact	-	62	25
Prior year adjustment - impact on deferred tax asset	-	(416)	-
Attributable to owners of the parent	25,446	19,077	43,964

10.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment additions in the period

During the 26 weeks ended 28 June 2015, the Group acquired assets with a cost of £2.6m (29 June 2014: £1.8m; 28 December 2014: £4.4m).

Capital commitments

At 28 June 2015, the Group had capital commitments of £nil (29 June 2014 and 28 December 2014: £nil).

11. INTEREST-BEARING LOANS AND BORROWINGS

Bank revolving facility

On 31 January 2014, the Group increased the existing revolving credit facility with Barclays Bank plc to a £45,000,000 facility (being a £30,000,000 revolving credit facility and £15,000,000 term loan) in order to repay the Employee Benefit Trust loan.  On 31 January 2015, the term loan was repaid by the Group. Interest charged on the term loan was 1.10% per annum above LIBOR. Interest charged on the revolving credit facility is 1.35% per annum above LIBOR in addition to a 0.5% utilisation fee. The facility expires on 10 August 2017. Arrangement fees of £298,000 (29 June 2014: £372,000; 28 December 2014: £372,000) directly incurred in relation to the facility are included in the carrying value of the facility and are being amortised over the term of the facility; at 28 June 2015, amortisation of £207,000 (29 June 2014: £134,000; 28 December 2014: £208,000) had been recognised against the carrying value of the facility. The facility is secured by an unlimited cross-guarantee between the Company, Domino's Pizza UK & Ireland Limited, DPG Holdings Limited, DP Realty Limited, DP Pizza Limited and DP Group Developments Limited.

Bank overdraft facility

On 5 October 2012, the Company obtained an overdraft facility from Barclays Bank plc for a maximum limit of £5,000,000 for working capital purposes.  The interest is charged at 1.25% per annum above LIBOR.  At 28 June 2015, there was £nil drawdown on the facility (29 June 2014 and 28 December 2014: £nil).

Other loans

Other loans include loans entered into to acquire assets which are then leased onto franchisees under finance lease arrangements. The Group has an asset finance facility of £5,000,000 (29 June 2014 and 28 December 2014: £5,000,000) with a term of 5 years. The balance drawn down on this facility and held within 'other loans' as at 28 June 2015 is £2,599,000 (29 June 2014: £2,455,000; 28 December 2014: £2,278,000). The loans are repayable in equal instalments over a period of up to five years. The loans are secured by a limited guarantee and indemnity by the Company and Domino's Pizza UK & Ireland Limited (limited to an annual sum of £300,000) and a mortgage charge over the assets financed. The interest rate on these loans is fixed at an average of 5.7% (29 June 2014: 5.8%; 28 December 2014: 5.5%).

12.  SHARE-BASED PAYMENTS

The expense recognised for share-based payments in respect of employee services received during the 26 weeks to 28 June 2015 is £664,000 (29 June 2014: £538,000; 28 December 2014: £899,000). This all arises on equity settled share-based payment transactions.

13.  RELATED PARTY TRANSACTIONS

During the 26 weeks ended 28 June 2015, the Group entered into transactions, in the ordinary course of business, with related parties. Transactions entered into and trading balances outstanding at 28 June 2015, with related parties, are as follows:

			Amounts
		Sales to	owed by
		related	related
		party	party
		£000	£000
Associates and joint ventures
28 June 2015		11,517	1,855
29 June 2014		9,688	571
28 December 2014		19,157	1,445

14.  ANALYSIS OF NET DEBT

	(Unaudited) At	(Unaudited) At	At
	28 June	29 June	28 December
	2015	2014	2014
	£000	£000	£000
Cash and cash equivalents	30,134	43,611	33,743
Bank revolving facility	(8,301)	(29,797)	(5,447)
Bank loan EBT	-	(15,000)	(15,000)
Finance leases	(29)	(93)	(60)
Other loans	(2,599)	(2,455)	(2,278)
Net cash / (debt)	19,205	(3,734)	10,958

15.  PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the Group in terms of preventing or restricting execution of our strategy during the period under review and for the remainder of the financial period have not materially changed from those set out on pages 20 to 24 of the Domino's Pizza Group plc Annual Report and Accounts 2014.  However, the Company has appointed a new Chief Financial Officer and, therefore, this is no longer considered to be a risk for the remainder of the financial period.

In summary, the Group is exposed to the following main risks:

o  Business Strategy

o  Strategic direction - the risk of implementing a strategy in newer markets such as Germany, Switzerland, Liechtenstein and Luxembourg that does not achieve the desired outcomes

o  Germany - Germany remains a challenge and the Group is dedicated to focusing on its success and growth

o  Food Production, Storage and Suppliers

o  Failure of a critical supplier - we are reliant upon the continued operation of various third-party suppliers who provide raw materials

o  Food safety and compliance - The Supply Chain Centres must comply with applicable food safety rules and regulations and our franchisees must ensure that all stores are also compliant

o  Production issues or destruction on Supply Chain Centres - One of the key functions of the business is production of dough and the distribution of food and other store items by our Supply Chain Centres

o  Competition

o  Competitors and consumer trends - failure to compete on product, service and quality and changes in consumer tastes, brand relevance and demographic trends

o  Franchisees

o  Material deterioration in relationships with franchisees - relationships with franchisees are key to the Group's success as the franchisees drive a large part of the business

o  Commercial leverage of large franchisees - certain  franchisees are now of considerable scale and therefore there is a risk that should these franchisees be allowed to expand further they could attempt to leverage off their size with a view to gaining preferential treatment from the Group

o  Brand Reputation

o  Reputational damage or loss of confidence in the brand - any significant act, omission or harmful allegation that is made in public in relation to the brand could lead to significant media interest and potentially bad publicity

o  Information Technology and Security            

o  Data protection and security - significant failure in, or successful attacks on, our IT infrastructure, systems and processes could impact online sales and place customer data at risk of loss or theft

o  Property

o  Store growth - continuing acquisition and development of property sites carries inherent risk as challenges exist in relation to finding new sites, obtaining planning permission (or other consents and compliance) in the countries in which the Group operates

o  People

o  Employees - failure to attract, retain, develop and motivate the best people at all levels

o  Corporate Governance

o  Internal controls, fraud and compliance - ensuring the Group has the appropriate internal controls and policies

A copy of the Annual Report and Accounts 2014 is available at corporate.dominos.co.uk

RESPONSIBILITY STATEMENT

Each of the Directors, whose names and functions appear below, confirm to the best of their knowledge that the condensed interim financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting', as issued by the IASB and adopted by the European Union and that the interim management report herein includes a fair review of the information required by the Disclosure and Transparency Rules (DTR), namely:

·      DTR 4.2.7 (R): an indication of important events that have occurred during the six month period ended 28 June 2015 and their impact on the condensed interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      DTR 4.2.8 (R): any related party transactions in the six month period ended 28 June 2015 that have materially affected, and any changes in the related party transactions described in the Annual Report and Accounts 2014 that could materially affect the financial position or performance of the enterprise during that period.
 

The Directors of Domino's Pizza Group plc as at the date of this announcement are as set out below:

Stephen Hemsley, Non-executive Chairman

Colin Halpern*, Non-executive Vice-Chairman

David Wild, Chief Executive Officer

Paul Doughty, Chief Financial Officer

Kevin Higgins*

Ebbe Jacobsen*

Michael Shallow*

Helen Keays*

Steve Barber*

*Non-executive Directors

A list of the current Directors is maintained on the Domino's Pizza Group plc website at: corporate.dominos.co.uk.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from the legislation in other jurisdictions.

This responsibility statement was approved by the Board of Directors on 27 July 2015 and is signed on its behalf by Paul Doughty, Chief Financial Officer.

By order of the Board

Paul Doughty

Chief Financial Officer

28 July 2015

INDEPENDENT REVIEW REPORT TO DOMINO'S PIZZA GROUP PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 June 2015 which comprises the Group Income Statement, Group Statement of Comprehensive Income, Group Balance Sheet, Group Statement of Changes in Equity, Group Cash Flow Statement and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

Birmingham

28 July 2015

 

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