INNOVATION HELPS DRIVE DOMINO'S PROFIT TO $64M

Written on the 11 August 2015

INNOVATION HELPS DRIVE DOMINO'S PROFIT TO $64M

DIGITAL innovation and a raft of new store openings has helped Domino's Pizza Enterprises (ASX:DMP) cook up a full-year profit of $64 million.

The result represents a 40 per cent lift from the previous year, with EBITDA up 34.4 per cent to $127.8 million.

Domino's opened 59 new stores in Australia and New Zealand during FY15, while achieving same-store sales growth of 11.3 per cent, fuelled by new customers using the Pizza Mogul app.

The company also launched a Live Pizza Tracker in July to track delivery drivers using GPS, and it also rolled out 4 Click Ordering and payment tokenisation.

There are more than 40 digital initiatives to speed up ordering in the pipeline, including a 15 and 20-minute delivery guarantee.

Domino's CEO and managing director Don Meij says connecting with customers through the use of technology will maintain the company's growth.

"We have continued the positive sales momentum right across the group in each of our six markets and in ANZ we delivered another year of strong earnings growth driven by double-digit SSS and record store openings," Meij says.

"The algorithm behind the 15 and 20-minute delivery guarantee, as well as GPS Driver Tracker, means it's only activated when we can do this safely from an operations perspective.

"This move will see us compete in a new market, taking share from the convenient fast-food drive-thru outlets. These revolutionary projects will also assist us in reaching our record store growth in ANZ in FY16."

The company's operations in Europe delivered a record EBITDA growth of 92.3 per cent, after opening another 54 new stores across the continent.

Corporate stores in France are starting to lead the growth, despite a VAT increase presenting a challenging macro environment.

Domino's Pizza Japan grew 14.8 per cent on a full-year basis, adding 64 stores in new markets.

Meij says Domino's franchise model has contributed to its success, with 75 per cent of the business franchised.

"We can be agile, stay ahead of the curve, innovate and improve because our franchisees are world class," he says.

"The commitment in this space, to stay ahead of the curve and be at the forefront of digital innovation is demonstrated by our significant investment of the 40-plus new and exciting digital projects in the pipeline for the year ahead.

"As part of this focus, we continue to assess opportunities to further leverage our capabilities in new and existing markets which includes reviewing strategic acquisitions if relevant to our growth strategy."

Domino's will pay a final dividend of 27.2c a share on September 11. This brings the full-year dividend to 51.8c up 41.1 per cent compared to the previous year.

 


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