February 5, 2020 / 7:23 AM / 2 months ago

UK's Domino's posts higher quarterly sales, warns on impairment charges

(Reuters) - Britain’s biggest pizza delivery company Domino’s Pizza Group Plc (DOM.L) on Wednesday reported a rise in fourth-quarter group system sales, helped by higher demand in UK and warned that it expects significant impairment charges for 2019.

The company expects impairment charges of around 20 million pounds for corporate stores, and between 20 million pounds and 40 million pounds related to its international businesses.

Domino’s Pizza Group, which is looking for buyers for its loss-making international operations, said group system sales rose 3.7% to 352 million pounds ($458.09 million) in the fourth quarter ended Jan. 29.

The company, itself a franchise of U.S.-based Domino’s Pizza Inc (DPZ.N), expects capital expenditure slightly below its prior outlook range of 25 million pounds to 30 million pounds.

It expects full-year UK and Ireland operating profit to be within the range of market expectations of between 102.1 million pounds and 104.1 million pounds, but expects to report an operating loss of around 20 million pounds for its directly operated international market.

On the international business disposal, Domino’s Pizza Group said its focus has been on Norway given the significant operating losses there.

“Once we have agreed a transaction for Norway, we will focus on progressing transactions for our businesses in Sweden, Switzerland and Iceland,” the company said.

The company expects net debt of around 233 million pounds, slightly above the previous forecast range of 220 million pounds to 230 million pounds.

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta

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