DOMINO'S CHASES GROWTH WITH RECORD PROFIT
Written on the 17 February 2016
DOMINO'S Pizza Enterprises (ASX:DMP) has cooked up ambitious growth targets off the back of another record profit.
The Brisbane-based business posted a net profit of $45.6 million in the first half, up 56.7 per cent compared to the previous period.
The results were driven by organic growth across the group's markets in Australia, New Zealand, Belgium, France, the Netherlands and Japan, with revenue up 29.6 per cent to $445.3 million.
Domino's has upgraded both its earnings and profit guidance from 30 per cent to 35 per cent for the full year as a result.
The group has also confirmed plans to open 4250 stores by 2025, with its presence in Europe set to more than double the number of stores in Australia.
Technology underpinned a 27 per cent lift in earnings in Australia, with the introduction of the GPS Driver Tracker, SMS ordering, electric pushbike rollout and Smart Watch ordering.
Domino's CEO and managing director Don Meij says improving speed of service across its network of stores will be a key focus in the second half of FY16.
He says the goal for the next three to five years will be to deliver pizzas within 10 to 12 minutes nationally.
"Our commitment is to a philosophy of being 'slow where it matters, fast where it counts'," Meij says.
"Slow in the careful preparation of high quality pizzas, safe delivery and friendly service at the door. Fast in that we are cutting the cook time in half, hustling to and from cars and using faster ovens and improved technology.
"The significant investment in our digital pipeline, as well as the opening of more than 50 new stores for FY16 will continue to improve productivity and drive sales in the second half and beyond."
Europe delivered EBITDA growth of 108.1 per cent compared to previous half, attributed to digital innovation, strong margin growth and record franchisee profitability.
Sales growth was supported by the rollout of point-of-sale platforms Pulse and OneDigital, with the Netherlands leading the way.
Meij says Domino's has more than 60 stores in the pipeline for FY16 excluding acquisitions.
"The next six months are set to be just as strong with the company set to achieve a record number of organic new store openings and franchisee profitability at record highs which is stimulating strong organic growth," he says.
"The focus will also be on the integration of the Pizza Sprint and Joey's Pizza stores into the Domino's business, with the rollout of Pulse and OneDigital expected to be completed in early 2017."
The group acquired 89 Pizza Sprint stores in France last month, as well as 212 Joey's Pizza stores across Germany in a joint venture with Domino's Pizza Group. Both are expected to contribute to earnings in the second half.
Sales in Japan were impacted by softer Christmas trading conditions, but bolstered by record store openings in the first half. The group added another 48 stores in the region, taking the total to 432.
DMP will pay a dividend of 34.7 cents per share on March 15.