INTERVIEW - Domino's restarts share buybacks after World Cup success

29th Jul 2014 13:31

The World Cup kick-started summer sales at Domino's Pizza, prompting the chain to restart its share buyback programme and hike its dividend, its boss said on Tuesday.The football in Brazil contributed 1% to sales in the six months to June 29th, which rose 14.9% to £375m.Domino's cashed in on people staying at home to watch the tournament by offering promotions such as a Football Fanfeast and a new Carnivale range of pizzas.Chief Executive David Wild said the early exit of England did not affect sales, adding that the match between Spain and Holland provided one of its busiest periods."People enjoyed the World Cup not just when England were playing," Wild told ShareCast in an interview.Domino's group pre-tax profit lifted 10.1% to £24.5m. Basic earnings per share increased 7.4% to 11.6p.Wild said the chain would resume the buyback programme, although he declined to give more detail. It also increased its half-year dividend to 7.81p from 7.1p a year ago.Domino's suspended its share buybacks three years ago as it ploughed cash into launching overseas operations in Switzerland and Germany.Wild, who became Chief Executive earlier this year after a spell as interim CEO, said the group was determined to make a success of its German business, whose sales dropped 1.7%.He said German consumers had different tastes to people in the UK and other markets, although Germany still has successful independent pizza takeaways and a number of chains.Domino's also needs to establish a business model in Germany that allows franchisees to make money despite higher labour and social costs relative to the UK and other markets, he said."They have to be convinced it's going to be profitable," he said.Wild said an economic upturn in the UK had increased demand for takeaways as people were more confident about splashing out on what he described as "affordable treats", although they were still cautious."I think consumers have got more money to spend but they're being very careful about how they spend it," he said.Shares in Domino's fell 0.5p to 542p by 13:07 in London.PW