Domino's sees profits rise by 27%

Pizza delivery firm Domino’s has served up a 27% rise in annual profits, but revealed its record of double-digit sales growth came to a halt in January.

The group reported a slowdown in sales growth since the start of the new year, with like-for-like sales up 4.7% in the first seven weeks.

This marks a sharp drop on the rate of 10.3% seen in the previous quarter when the snow and hit TV shows such as The X Factor and Strictly Come Dancing kept customers at home.

Its recent sales slowdown was met with disappointment in the City after the 11% rise seen in the same period a year earlier.

Shares dropped more than 6% despite underlying pre-tax profits rising to £38 million in the year to December 26, up from £29.9 million.

Hugh-Guy Lorriman, an analyst at Seymour Pierce, said Domino’s had continued to produce “stellar” results, but added: “After reporting double digit like-for-likes in the first six weeks over the last two years, the market may feel less positive, especially after recent positive trading newsflow from casual dining operators.”

Domino’s said the current sales performance came against a “backdrop of exceptional comparatives from the same period in 2010 and the current difficult economic climate”.

It confirmed aims to meet a ramped-up store opening programme of 60 new outlets a year and said its recent deal with Moto motorway services would deliver benefits this year.

Domino’s saw like-for-like sales rise 11.9% in the year to December 26, with online orders up 63% to £128 million. Internet sales growth has picked up further since the year end – to 72.9% in the most recent seven weeks. E-commerce has been helped by the recent launch of iPhone apps and will be driven further by new applications for products such as the iPad.

The group, which operates a franchise-based model after it begin life in 1960, now has 665 stores in the UK and Ireland. It opened a record 57 sites last year and wants to increase store numbers to at least 1,200.