Domino’s Pizza Group, the leading pizza delivery company, has announced strong results for the 52 weeks ended 29 December 2013, leading Douglas Jack of Numis to comment:
“Underlying PBT rose 15% to £54.8m (vs £54.2m; consensus £54.3m), with UK LFL sales up 11.3% (volume 10.4%; price 0.9%), and franchise profitability up 26%. Given this, record sales from new sites and UK LFL sales being up 9.5% (vs 13.8% comp) over the last eight weeks, we expect the pace of expansion to accelerate by 32% in 2015E. Reflecting strong growth prospects and the P/E being in line with the historic average, we are moving our recommendation to Buy from Add.”
Commenting on the results, Interim Chief Executive Officer, David Wild, said:
“It’s been another strong year for Domino’s and I am particularly delighted by the sales performance in our core UK business, which has continued into 2014, confirming the strength of our offer for both new and existing customers. The recovery in the Republic of Ireland is also pleasing. Whilst we have learnt some hard lessons in Germany, we now have a clear way forward and must focus on the delivery of this change in direction.
”We sold 65.5 million pizzas across the Group during the year and created over 1,500 jobs, which is no mean feat. I’d therefore like to give a big thank you to my colleagues and franchisees who have all been crucial in delivering this result, through their commitment to this great brand.
”We remain focused on delivering our strategy into 2014 and beyond and I am excited by the numerous initiatives I see in all areas of the business. By working with the franchisees and my colleagues at Domino’s, I look forward to fulfilling my role over the coming months to progress the Group’s exciting growth plans for the future.”
Financial Highlights
- System sales increased by 14.0% to £668.8m (2012: £586.5m)
- Profit before tax, including Germany and Switzerland, of £47.6m, up 1.9% (2012: £46.7m)
- Profit before tax, excluding Germany and Switzerland, increased 11.6% to £55.2m (2012: £49.5m)
- Adjusted diluted earnings per share, excluding Germany and Switzerland up 10.3% to 25.6p (2012: 23.2p)
- Like-for-like sales growth of 7.0% in 670 UK mature stores (2012: 5.2% in 612 mature stores)
- Earnings per share (pre-exceptional items):
- Diluted earnings per share up 8.6% to 23.9p (2012: 22.0p)
- Basic earnings per share up 8.1% to 24.0p (2012: 22.2p)
- Statutory basic earnings per share 10.7p (2012: 19.0p)
- Pre-tax exceptional costs of £27.5m of which £26.5m relates to impairments and other exceptional charges within German business
- Final dividend increased by 11.4% to 8.80p per share (2012: 7.90p) bringing the total dividend for the year to 15.90p per share up 9.7% (2012: 14.50p)
- 57 new stores opened in the period (2012: 69 stores) with four closures (2012: two) resulting in a total of 858 stores in four countries as at 29 December 2013
- Online system sales increased by 28.2% to £338.0m (2012: £263.7m) with online sales accounting for 61.5% of UK delivered sales (2012: 56.1 %). Of this, 30.9% of online orders were taken through a mobile device (20122: 19.7%)
- Strong balance sheet with adjusted net debt to EBITDA of 0.3:1 (2012: 0.5:1)
Current Trading
Like-for-like sales in the first seven weeks of 2014 are as follows:
| UK (£) | 14.6% |
| ROI (€) | 4.6% |
| Germany (€) | 3.8% |
| Switzerland (CHF) | -0.4% |
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