Promotion push helps boost Domino's Pizza first-half profit

Tue Jul 29, 2014 2:43am EDT

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LONDON, July 29 (Reuters) - Britain's Domino's Pizza posted a 10 percent rise in first half profit as improved marketing and promotions drove up sales, though the firm said its expansion in Germany was still proving troublesome.

The group, which has most of its 868 stores in the UK but also operates in Ireland, Switzerland and Germany, said on Tuesday pretax profit for the 26 weeks to June 29 rose to 24.5 million pounds ($42 million), in line with analyst expectations.

Sales at UK stores open over a year rose 11.3 percent over the period as the firm benefited from later trading hours, growing online sales, demand for new bundled offers and an extra boost from the World Cup.

The group said it was also seeing improved consumer confidence in its sector, with discretionary spend on the rise.

In Germany, where Britain's biggest pizza delivery firm's much-anticipated expansion plans have been hampered by restructuring costs and weak trading, the firm said conditions continued to prove challenging.

The firm has slowed German expansion while it gets to grips with store formats, overheads and growing sales and said it had yet to transfer all of its poorly-trading own-managed stores there to franchisees - a move Domino's hopes will boost sales.

Chief Executive David Wild said the firm was committed to its plans for the fledgling division, which closed four outlets in the half and posted an operating loss of 4.7 million pounds.

Shares in Domino's closed at 542.5 pence on Monday, down 8.3 percent on a year ago, valuing the business at 900 million pounds. ($1 = 0.5889 British Pounds) (Reporting by Neil Maidment; editing by Kate Holton)

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