Domino's Pizza Group (DOM) H1 2024 earnings summary

Executive summary

• H1 2024 saw system sales rise 0.2% to £767.7m, with Q2 showing improved trading momentum and a return to growth in delivery orders after ten quarters of decline.

• Franchisee profitability increased 6.6% year-over-year, even after absorbing the largest ever minimum living wage increase.

• Strategic focus on core growth, customer experience, and franchisee health, with a target of 2,000 stores and 1,400 expected next year.

• Completed disposal of London corporate stores for £35.1m, recycling capital for growth.

• Announced a new £20m share buyback and increased dividend, reflecting confidence in future prospects.

Financial highlights

• System sales: £767.7m (+0.2% year-over-year); group revenue: £326.8m (-1.8% year-over-year), mainly due to a 7.7% decrease in supply chain revenue.

• Underlying EBITDA: £69.0m (+0.4%); underlying EPS: 9.8p (+3.2%); interim dividend: 3.5p (+6.1%).

• Free cash flow: £30.5m, down from £56.2m in H1 23, mainly due to working capital outflow.

• Statutory profit after tax: £42.3m, including £11.2m profit on store disposal and £2.2m Shorecal acquisition costs.

• Net debt: £285.4m, leverage at 2.16x (within 1.5–2.5x target range).

Outlook and guidance

• FY24 underlying EBITDA guidance moved to the lower end of market expectations (£144.3m–£149.2m) due to a tough H1 and higher pass-through of food cost savings.

• Shorecal expected to contribute ~£5m to underlying EBITDA; depreciation & amortisation £18–20m; interest costs £17–20m.

• Capital investment for FY24 guided at c.£20m; year-end net debt expected between £250m and £270m.

• Store opening target remains at 70 for the year, with 22 opened in H1 and 26 YTD; strong pipeline for FY25.

• Underlying effective tax rate for FY24 estimated at c.24.5%.