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Domino's Pizza Group FY Pre-tax Profit Down

Domino's Pizza Group plc (DOM.L) reported that its profit before tax for the 52 weeks ended 30 December 2018 was 61.9 million pounds, down 24.0% year-on-year.

Profit attributable to equity holders of the parent decreased to 49.0 million pounds from 67.5 million pounds in the previous year. On a statutory basis, earnings per share was 10.2 pence , compared to 13.6 pence in the prior year.

Underlying basic earnings per share for 2018 was 16.1 pence, representing 2.5% growth over last year. Earnings per share growth was driven largely by a 3.1% reduction in the average share count as a result of share buybacks over the last two years.

Underlying profit before tax was 93.4 million pounds, down 1.1% on a 52 week basis. The slight decline reflects the continued sales and profit growth in the UK, ROI and Iceland, offset by losses in Norway, Sweden and Switzerland.

Revenue for the year rose 12.6% to 534.3 million pounds compared to last year's 53 week period. The drivers of revenue growth were store openings, like-for-like growth from existing stores, food cost inflation, the full year benefits of 2017 acquisitions, and slightly offset by foreign exchange effects.

Group system sales were up 9.0% in the year to 1.26 billion pounds. Excluding the impacts of foreign exchange movements and acquisitions, Group system sales were up 7.0%.

During the year our CFO Rachel Osborne decided to leave Domino's to pursue other interests. In October we announced the appointment of a new CFO, David Bauernfeind, who comes with significant PLC experience and has already made a positive impact in the business. Steve Barber, the Chairman of the Audit Committee, also informed the Board of his intention to step down at the Annual General Meeting in April 2019. I would like to thank both Rachel and Steve, on behalf of the Board, for their contributions to the business.

The company expects further growth in the UK and ROI in 2019, both from like-for-like growth and new store openings. There are likely to be fewer new stores this year given the ongoing discussions with franchisees on commercial terms, but it is confident that the strong commercial rationale will drive decision-making in the medium term.

In international businesses, it is investing in new stores and improved capabilities to sharpen execution, and, while recognising a heightened risk profile in delivery in the Nordics, it anticipates a break-even result for International as a whole in 2019. Overall group capex is expected to be 25 million pounds -30 million pounds.

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