Domino’s profits rocket as ‘Freedom Day’ ushers in more consumer cash
Domino’s has seen its sales and profits rocket in the past six months, as the end of restrictions in the UK ushered in greater consumer spending power.
The pizza group’s profits after tax pulled in £41.3m in the six months to 27 June, surging 117.4 per cent from its just £19m profit in 2020.
Sales were up 19.6 per cent to £752.3m, over £100m more than in the same period in 2020 – due in part to the easing of lockdown measures and opening of pubs and bars.
After opening higher, shares remained up 2.7 per cent at 431.8p per share in its afternoon trading.
Consumers have regained spending power outside of restrictions, with less job and financial insecurity than in the UK’s first national lockdown last year.
Domino’s also benefited from the Euros and the return of pub nights which has allowed the pizza group to slice its net debt by around £24.5m to a total of £177.6m.
While digital momentum continues, Domino’s UK online sales were up 25 per cent – meaning 93 per cent of its UK system sales came in from its website and delivery apps.
Although it has posted an upbeat first half of the year, and its second half is off to a good start, the pizza group expects less growth in the latter half of 2021.
Having now passed the anniversary of the lower VAT rate, which was introduced in July 2020, Dominio’s said as the scheduled VAT rate increases its system sales growth will be lower.
“Whilst the external landscape remains uncertain, the second half has started well. I believe our agile business model leaves us well placed to capitalise on the significant opportunities ahead while continuing to invest in our strategy,” CEO Dominic Paul said.