DOMINO'S AIMS FOR DOMINATION
16 August 2016, Written by James Perkins
DOMINO'S Pizza (ASX: DMP) has reported record sales and record profit for FY16.
Network sales were $1.96 billion, up 32.7 per cent, while underlying net profit after tax (NPAT) was $92.0 million, up 43.6 per cent.
Statutory NPAT was up 28.7 per cent to $82.4 million, which was below expectations, largely due to extra costs related to the company's European expansion.
This could explain the 5.09 per cent drop in the DMP share price this morning, to $73.06 per share.
The company says the growth was organic, through increased same store sales (up 10.9 per cent), its digital platforms and the addition of 484 stores to the group.
Technology was a driving force for the company, as it slashed waiting times for both delivered and pick-up product in both Australia and Europe, allowing the company to compete with other quick service restaurants that have drive-throughs.
"We are focused on improving technology, pushing safer, more efficient delivery, while investing in world class ordering platforms," says Group CEO and Managing Director Don Meij (pictured).
The company has targeted delivery times of 10-12 minutes and pick up times of between 5-6 minutes.
The company acquired more than 300 Joey's Pizza and Pizza Sprint stores in Germany and is converting them to DMP stores. The company says delivery times in the converted stores have improved by three times.
This year, the company expects to open between 175-195 stores across the entire group.
And it will continue to aggressively target market share in Australia and New Zealand, and plans to increase the number of ANZ stores from 900 to 1,200.
"Due to the extraordinary growth being experienced in ANZ, the returns from investment in our program of digital initiatives and the capacity restraints in some areas of the region, we are confident that ANZ has the capacity for 1,200 stores, up from our previous guidance of 900 stores," says Meij.
The company expects a 30 per cent plus increase in NPAT in FY17 and EBITDA growth of more than 25 per cent.
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