Companies: DOM   

Domino's, the pizza delivery group, continues to excel, reporting a 41.5% increase in pre-tax profits to £4.1m at the interim stage. Total turnover rose 14.4% to £36.2m and like-for-like sales were up by 4.9%. System sales (which includes turnover from operated and franchise stores) jumped 18% to £81.5m. During the period 19 new stores were opened, bringing the total to 337 outlets, of which 318 are franchised. 40 to 50 stores will be opened during the current year, slightly less than anticipated because a change in planning uses categories has yet to be implemented by local councils. Overall, the company aims to reach 800 stores in order to get a 0.3% royalty discount from US-based parent Domino's, but the current infrastructure can support 500 stores before further major investment is needed. Net debt rose slightly to £5m (£4.9m) but chief executive Stephen Hemsley explained there are no core borrowings and the debt reflects the 3m shares bought by the Employee Benefit Trust and the transactions of its equipment leasing subsidiary DP Capital. Current like-for-like sales growth is exceeding that experienced up to the interim stage. Believing that unrequired cashflow should be returned to investors, the company bought back 100,000 shares and the dividend has improved 66.7% to 2.2p per share. House broker Numis has increased its pre-tax forecast from £8m to £8.7m. Worth holding for further growth.