Domino's defies the snow for record sale

Published on Saturday 13 February 2010 12:40

DOMINO'S Pizza is set to outstrip City expectations this week yet again by showing that the pre-Christmas snowstorms failed to dent annual profits with revenues set to breached the £400 million barrier for the first time.

It is believed the takeaway chain, which has regularly outperformed expectations in the downturn as cash-strapped consumers have stopped going to restaurants, will have boosted earnings at least 25 per cent.

Domino's Pizza, which has 600-plus stores in the UK and Ireland, has revealed that like-for-like sales climbed 8.6 per cent in the 13 weeks to 27 December. That beat City forecasts, and the market expects Domino chief Chris Moore to say the improved performance has carried on into January.

Paul Hickman, travel and leisure analyst at broker KBC Peel Hunt, said: "This is not just a case of the company benefiting from people trading down in a recession. Domino's marketing of their brand is also very strong."

The company sponsors ITV's talent show Britain's Got Talent, and has benefited from other popular TV offerings such as Strictly Come Dancing and The X-Factor that encourage customers to stay indoors.

Hickman is forecasting underlying pre-tax profits of 29.5 million, up from 23.4m in 2008, with sales expected to jump to 407m from 350.8m in the previous year. He believes the total dividend will rise to 7.8p (5.9p).

"How their delivery vans got through the bad weather conditions is something the market will be interested in," Hickman said.

Moore is also expected to credit the company's 100 per cent franchise model for its success.

One analyst said: "There's a queue of franchisees to Domino's door, who will try any way to beat obstacles to deliver the product, including those recent icy roads."