Domino’s Pizza...Domino’s Pizza UK & Irl plcFinancial Highlights contd. • E-commerce sales up 64.0% to £6.5m (2004: £4.0m) • A record 23 stores opened in the period (2004:

Domino’s Pizza UK & IRL plcInterim Results for the 26 weeks ended 3 July 2005

Domino’s Pizza UK & Irl plc

Stephen Hemsley, Chief Executive

Lee Ginsberg, Finance Director

1


Financial Highlights

• PBT pre-exceptionals increased 22.6% to £5.0m (2004: £4.1m) and post-exceptionals by 34.7% to £5.5m (2004: £4.1m)

• Earnings per share:- Basic EPS up 38.1% to 7.97 pence (2004: 5.77 pence)- Diluted EPS up 42.7% to 7.82 pence (2004: 5.48 pence)

• Interim dividend increased 40.9% to 3.10 pence per share (2004: 2.20 pence)

• System sales increased 19.1% to £97.1m (2004: £81.5m)

• Like for like sales in 317 mature stores up 8.4% (2004: up 4.9% in 268 stores)

2


Financial Highlights contd.• E-commerce sales up 64.0% to £6.5m (2004: £4.0m)

• A record 23 stores opened in the period (2004: 19 stores) resulting in a total of 380 stores at period end (2004: 337 stores)

• Sale of 13 corporate stores for £4.0m, generating £0.8m profit

• Strong cash generation with cash on hand of £8.5m (2004: £2.9m)

• Further 400,000 share buybacks at a cost of £1.1m (2004: 100,000 shares: £0.2m)

3

Financial PerformanceProfit and Loss

26 weeks to 26 weeks to % 53 weeks to3 Jul 2005 27 Jun 2004 Increase 2 Jan 2005

£’000 £’000 £’000

System sales 97,090 81,504 19.1 174,292Statutory sales 40,502 34,736 16.6 74,215Operating profit pre-exceptionals 5,082 4,259 19.3 9,138Exceptional LTIP amortisation (313) ___-__ - ___ -__ Operating profit 4,769 4,259 12.0 9,138Profit/(loss) on sale of fixed assets _ 812_ (45) ___- ___ (47) Profit before interest and tax 5,581 4,214 32.4 9,091Net interest payable (50) (109) - (270)Profit before tax 5,531 4,105 34.7 8,821Taxation (1,438) (1,170) - (2,058)Profit after tax 4,093 2,935 39.5 6,763

Dividends 3.10p 2.20p 40.9 5.25pEarnings per share

- Basic 7.97p 5.77p 38.1 13.23p- Diluted 7.82p 5.48p 42.7 12.67p

4

Financial PerformanceStore Openings

0

10

20

30

40

50

60

2002 H1 2003 H1 2004 H1 2005 H1

18 21 19

Openings

5

23

16

29

21

RECORD OPENINGS IN FIRST HALF

3440

50

Financial PerformanceStore Count

0

50

100

150

200

250

300

350

400

2001 H1 2002 H1 2003 H1 2004 H1 2005 H1

237269

318

337380N

umber of stores

6

MARKET POTENTIAL OF 800 – 1,000 DOMINO’S PIZZA STORES

Financial PerformanceMature Store Sales up 8.4%

1 2 3 4 5 6 7 8 9 10 11 12

20042005

7

Financial PerformanceBalance Sheet

8

At At At3 Jul 2005 27 Jun 2004 2 Jan 2005

£’000 £’000 £’000

Fixed assets 15,332 15,855 16,498

Current assets 24,386 18,866 20,980

Creditors due within one year (13,941) (14,353) (15,121)

Net current assets 10,445 4,513 5,859

Creditors due after more than one (8,060) (7,032) (8,102)year

Deferred tax (623) (630) (857)

Net assets 17,094 12,706 13,398

Financial PerformanceAnalysis of Shareholder Funds


£’000 £’000 £’000

At beginning of year 13,316 10,680 10,680Share issues 302 399 1,071Share buyback (1,096) (200) (1,610) EBT shares - - (1,200)Profit for year 4,093 2,917 6,731 LTIP charge 479 - 332Dividends - (1,158) (2,688)

17,094 12,638 13,316 Minorities - 68 82

17,094 12,706 13,398

9

Financial PerformanceAnalysis of Borrowings


£’000 £’000 £’000

Cash at bank 8,480 2,914 4,824

DP Capital (2,617) (2,730) (2,640)

EBT loans (6,360) (5,160) (6,360)

Other (43) (72) (42)

Net debt (540) (5,048) (4,218)

Shareholders funds 17,094 12,706 13,398

Gearing % 3.2% 39.7% 31.5%10

Financial PerformanceNet Cash Inflow From Operating Activities


£’000 £’000 £’000

Operating profit 4,769 4,207 9,033Depreciation 752 644 1,386Amortisation 76 71 133LTIP charge 479 - 333Decrease/(Increase) in stocks 304 (329) (857)(Increase) in debtors (452) (1,877) (1,505)Decrease/(Increase) in creditors (1,923) 676 1,420

______ ______Net cash inflow from operating 4,005 3,392 _9,943 activities

11

Financial PerformanceCash Flow Statement


£’000 £’000 £’000

Net cash inflow from operating activities 4,005 3,392 9,943Servicing of finance + returns on investment 66 (25) (215)Taxation paid (518) (1,028) (2,021)Capital expenditure + financial investment (1,102) (1,918) (3,428)Disposal/ (acquisitions) of subsidiaries 3,586 (280) (280)Dividends paid (1,536) (1,112) (2,235)Net cash inflow/(outflow) before financing 4,501 (971) 1,764Financing (829) 164 (661)Increase/(decrease) in cash 3,672 (807) 1,103

12

Financial PerformanceBasic Earnings Per Share up 38.1% to 7.97p

0

1

2

3

4

5

6

7

8

9

2002 H1 2003 H1 2004 H1 2005 H1

2.34

3.70

5.77

Penc

e

13

7.97

Financial PerformanceDividend per share up 40.9% to 3.10p

0

0.5

1

1.5

2

2.5

3

3.5

2002 H1 2003 H1 2004 H1 2005 H1

0.781.32

2.20

Penc

e

14

3.10

INCREASING CASH RETURNED TO SHAREHOLDERS


Share price vs Sector

178

198

218

238

258

278

298

318

Jul04

Aug04

Sep04

Oct04

Nov04

Dec04

Jan05

Feb05

Mar05

Apr05

May05

Jun05

DOMINO'S PIZZA UK & IRLRelative to FTSE A LL-SHA RE (GBP)Relative to FTSE A ll Share Leisure & Hotels

15


Building the Brand• FIRST HALF INITIATIVES:

• TV• Simpsons on Sky One• New product launches

• Direct marketing• Driving frequency and supporting new products

• New pizza menu development• Thin Crust Pizza• Cheese Steak Melt• Beef on the Barbie

• Technological advances• Web based ordering • Interactive services on digital TV• One number solution – 08712 12 12 12

16


E-Commerce Growth

• Sales of £6.5m in 2005• Growth of 64.0% over 2004

• 10.6% of all delivered pizza sales in the UK• Up from 7% a year ago

• Sky + Ntl interactive platforms re-launched• First half of this year

• Higher order value of e-commerce platforms• Circa 30% higher than telephone orders

17


New Products Launched

Cheese Steak Melt launched and provedvery popular – representing up to 17 % of

salesBeef on the Barbie recently launched

18


Building the Brand

19


Investment in Infrastructure• Three main areas of strengthening:

• Regionalisation of operations• To better source and support growing franchise network• Correlation between better standards and higher store sales

• Store opening + business development teams• Benefits already manifested in stronger store openings

• Franchisee performance related rebate scheme• Linked to store sales performance• Helps address franchise cost increases • Incentivise strong sales • Higher than budgeted cost this year

CONSISTENT AND SUSTAINABLE DEVELOPMENT OF FRANCHISEE NETWORK FOR YEARS TO COME

20


Continuing Strategy

• Maintain robust new store openings• Well on track for 800 – 1,000 Domino’s Pizza stores in UK and Ireland

• Drive like-for-like sales growth• New menu development• Continuation of superior standards and service

• Drive operational leverage• Infrastructure in place to support franchisee network• Control costs

• Focus on franchisee model• Sale of majority of corporate stores

• Maintain cash generation

• Return cash to shareholders

21


Trading & Prospects

• Store openings on track• Confident of achieving market forecast openings

• Solid like-for-like sales expected• Challenging to match first half performance

• Overheads under control as anticipated

• Continuing strong cash generation

POSITIVE OUTLOOK FOR THE REMAINDER OF 2005

22


The Market *• Home delivery food market in UK estimated at £1.2 billion

• Growth of 62% from 1999-2004• Pizza currently 43% of market• Domino’s deliver 1 in 10 home delivered meals

• Time poor consumers• Technological advances facilitate ease of ordering

• Market highly fragmented• Over 4,000 pizza delivery companies in UK

• Domino’s market leader in terms of: • Stores• Sales• Brand awareness• Technology

24* Mintel Report October 2004


Key Growth Drivers

• Significant increase in at-home eating predicted

• Greater in-home entertainment options - homes are leisure destinations in their own right

• Wider access to interactive technologies - advantageous for home-delivered food companies

• Increased development of residential property - new customers, more delivery areas

• Continued time pressure - consumers seeking convenience

• Ageing population sees pizza customers maturing with the market

25


The Competition

• Strengthened market leadership

Stores Sales

- Domino’s 380 £174m- Pizza Hut * 220 £ 95m- Perfect Pizza * 120 £ 24m - Papa Johns * 80 £ 20m

• Highest sales per store in industry

* Domino’s Pizza estimates

26

Documents

Domino’s Pizza...Domino’s Pizza UK & Irl plcFinancial Highlights contd. • E-commerce sales up 64.0% to £6.5m (2004: £4.0m) • A record 23 stores opened in the period (2004: