REG - Domino's Pizza Grp - Interim Results <Origin Href="QuoteRef">DOM.L</Origin> - Part 3
25/07/2017 07:06
- Part 3: For the preceding part double click ID:nRSY9508Lb
and Pizza Pizza Norway AS non-controlling interests were recognised of £20,424,000.
Further contributions from the non-controlling interests on the hive out of PPS Foods AB, dividends and results from
companies resulted in closing non-controlling interests of £21,186,000.
18. RELATED PARTY TRANSACTIONS
During the 26 weeks ended 25 June 2017, the Group entered into transactions, in the ordinary course of business, with
related parties. Transactions entered into and trading balances outstanding at 25 June 2017, with related parties, are as
follows:
Amounts Loans
Sales to owed by owed by
related related related
party party party
£000 £000 £000
Associates and joint ventures
25 June 2017 15,444 1,640 13,024
26 June 2016 13,339 1,120 10,592
26 December 2016 28,178 2,300 11,456
NOTES TO THE GROUP INTERIM REPORT
19. WORKING CAPITAL AND NON-CASH MOVEMENTS
(Unaudited) (Unaudited)
At At At
25 June 26 June 25 December
2017 2016 2016
£000 £000 £000
Decrease/(increase) in inventories 1,822 1,260 (2,866)
Increase in receivables (4,838) (7,284) (17,382)
Increase in payables 446 2,888 8,216
Increase in deferred income 692 310 1,338
Working capital movements (1,878) (2,826) (10,694)
Profit on disposal of non-current assets - (350) (137)
Share of post-tax profits/(losses) of associates (1,099) (1,098) 85
Share option and LTIP charge 1,744 1,040 2,264
Decrease in provisions (146) (5,279) (4,868)
Operating (loss)/profit on discontinued operations (454) 2,286 1,359
Non-cash movements 45 (3,401) (1,297)
Total movement (1,833) (6,227) (11,991)
20. ANALYSIS OF NET DEBT
(Unaudited) (Unaudited)
At At At
25 June 26 June 25 December
2017 2016 2016
£000 £000 £000
Cash and cash equivalents 33,057 17,874 23,091
Bank revolving facility (88,157) (27,329) (56,719)
Finance leases (263) (56) (72)
Other loans (5,597) (1,378) (857)
Net debt (60,960) (10,889) (34,557)
NOTES TO THE GROUP INTERIM REPORT
21. PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the Group in terms of preventing or restricting execution of our strategy
during the period under review and for the remainder of the financial period have not materially changed from those set out
on pages 19 to 22 of the Domino's Pizza Group plc Annual Report and Accounts 2016.
In summary, the Group is exposed to the following main risks:
Strategic risks
· People-related risks
· Failure to respond to and overcome competitive pressures
· Inability to react to changes in the health debate and public desire for healthier food
· Failure to achieve UK growth through new store openings
· Commercial leverage of large franchises
Operational risks
· Food safety
· Interruption of raw material supplies
· Supply Chain Centres unable to supply the stores
· Failure of online ordering systems for a prolonged or critical
· Loss of personal data relating to customers, employees or others; loss of corporate data
· Implementation of enterprise resource planning ('ERP') system
As the Group expands its International presence there is increasing exposure to fluctuations in foreign currency. This will
be mitigated where possible through treasury activity.
A copy of the Annual Report and Accounts 2016 is available at corporate.dominos.co.uk
ALTERNATIVE PERFORMANCE MEASURES
The performance of the Group is assessed using a number of Alternative Performance Measures (APMs).
The Group's results are presented both before and after non-underlying items. Adjusted profitability measures are presented
excluding non-underlying items as we believe this provides both management and investors with useful additional information
about the Group's performance and aids a more effective comparison of the Group's trading performance from one period to
the next and with similar businesses. Adjusted profitability measures are reconciled to unadjusted IFRS results on the face
of the income statement with details of non-underlying items provided in note 4.
In addition, the Group's results are described using certain other measures that are not defined under IFRS and are
therefore considered to be APMs. These measures are used by management to monitor on-going business performance against
both shorter term budgets and forecast but also against the Group's longer term strategic palms. The definition of each APM
presented in this report and, also, where a reconciliation to the nearest measure prepared in accordance with IFRS can be
found is shown below.
APMs used to explain and monitor Group performance:
Measure Definition Location of reconciliation to GAAP measure
Statutory revenues Revenues directly attributable to DPG derived from monies paid by franchisees for foodstuffs together with royalty payments for use of the Domino's brand, rental income from freehold and leasehold property, and corporate store sales in Switzerland and the Nordics Group income statement
Underlying operating profit Group operating profit before tax excluding non-underlying items Group income statement
Net interest before non-underlying items Group finance costs excluding non-underlying items Group income statement
Underlying profit before taxation Group profit before tax excluding non-underlying items Group income statement
Underlying profit for the period from continuing operations Group profit from continuing operations excluding non-underlying items Group income statement
Non-underlying items Items that are material in size, unusual or infrequent in nature, and are disclosed separately as non-underlying items in the notes to the accounts. Note 4
Underlying basic EPS Group EPS excluding non-underlying items Note 7
Net (debt)/cash Group cash less Group loan and financing liabilities Note 20
Group system sales System sales represent the sum of all sales made by both franchised and corporate stores to consumers. Not applicable
UK like-for-like (LFL) sales growth LFL sales performance is calculated against a comparable 26 week period in the prior year for mature stores opened before 27 December 2015 and which were not in territories split in the year Not applicable
Free cash flow Underlying Profit before depreciation and amortisation and after working capital and on-going business as usual capital expenditure, tax and interest. Not applicable
RESPONSIBILITY STATEMENT
Each of the Directors, whose names and functions appear below, confirm to the best of their knowledge that the condensed
interim financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting', as issued by the
IASB and adopted by the European Union and that the interim management report herein includes a fair review of the
information required by the Disclosure and Transparency Rules (DTR), namely:
· DTR 4.2.7 (R): an indication of important events that have occurred during the six month period ended 25 June 2017
and their impact on the condensed interim financial statements, and a description of the principal risks and uncertainties
for the remaining six months of the financial year; and
· DTR 4.2.8 (R): any related party transactions in the six month period ended 25 June 2017 that have materially
affected, and any changes in the related party transactions described in the Annual Report and Accounts 2016 that could
materially affect the financial position or performance of the enterprise during that period.
The Directors of Domino's Pizza Group plc as at the date of this announcement are as set out below:
Stephen Hemsley*, Non-executive Chairman
Colin Halpern*, Non-executive Vice-Chairman
David Wild, Chief Executive Officer
Rachel Osborne, Chief Financial Officer
Kevin Higgins*
Ebbe Jacobsen*
Helen Keays*
Steve Barber*
*Non-executive Directors
A list of the current Directors is maintained on the Domino's Pizza Group plc website at: corporate.dominos.co.uk.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information
differs from the legislation in other jurisdictions.
This responsibility statement was approved by the Board of Directors on 24 July 2017 and is signed on its behalf by David
Wild, Chief Executive Officer.
By order of the Board
David Wild
Chief Executive Officer
24 July 2017
INDEPENDENT REVIEW REPORT TO DOMINO'S PIZZA GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report
for the 26 weeks ended 25 June 2017 which comprises the Group Income Statement, Group Statement of Comprehensive Income,
Group Balance Sheet, Group Cash Flow Statement, Group Statement of Changes in Equity and related notes 1 to 21. We have
read the other information contained in the half yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in International Standard on Review
Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European
Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 25 June 2017 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
Birmingham
24 July 2017
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