Online demand helps profits jump at UK's Domino's Pizza

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By Neil Maidment

LONDON, Feb 26 (Reuters) - Bundle promotions and an increasingly popular app used by its army of teenage to 30-something fans helped Domino's Pizza serve up over 1.4 million pizzas a week in Britain and Ireland (Other OTC: IRLD - news) in 2014, helping send profits up 15 percent.

A strong start to 2015 with like-for-like sales up 9.5 percent in the first eight weeks also pleased investors, with shares in Britain's biggest pizza delivery firm up 7.5 percent to 744 pence at 0943 GMT on Thursday, the top FTSE 250 riser.

"A strong set of from Domino's this morning with a pretax profit beat, improving trend in Germany and a strong start to 2015, which leaves risks to forecasts firmly on the upside," analysts at N+1 Singer said, putting a hold rating under review.

Domino's said 8.2 million customers had downloaded its app in 2014, up from 3.2 million at the start of the year, with others ordering the likes of its Mighty Meaty and Veggie Supreme pizzas direct from their Xbox consoles.

Sales at UK stores open over a year rose 11.3 percent in 2014, the firm said, with a revamped app and website pushing online orders up to 70 percent of delivered sales year-on-year.

Full-year underlying pretax profit rose to 54.8 million pounds ($85.2 million), slightly ahead of analysts' average forecast of 54 million.

"It has been another strong year for Domino's," its chief executive David Wild said, adding the group would continue in 2015 to invest online, where customers order more frequently, spend more per visit and cost less to service.

In the fourth quarter of this year Domino's will trial a one-touch ordering service, where customers will be able to click just once to repeat a previous order, paying for it instantly using stored details.

Domino's, which has over 800 UK stores, said 2014 sales had also grown at its smaller Irish and Swiss businesses but had struggled in Germany, where expansion plans are faltering while it works through wrong store formats and menus and higher wages.

German operating losses reduced significantly in the second half of 2014 year-on-year, however, finishing at 7.3 million pounds overall. Wild said losses would fall again in 2015 but that the German business would not break even this year.

($1 = 0.6435 pounds) (Editing by James Davey and William Hardy)