DOMINO'S RESULTS HEAT UP
Written on the 12 August 2014
DOMINO’S Pizza Enterprises (ASX:DMP) has delivered impressive full year results, lifting net profit after tax by 50.4 per cent to $48.5 million.
The company’s foray into Japan is paying off, reporting an underlying EBITDA of $95.1 million – representing an increase of 70 per cent from the previous corresponding period.
DMP acquired 75 per cent of Domino’s Pizza Japan (DPJ) in August last year, which has contributed $27.4 million to the EBITDA.
It follows a record number of new stores for the group, including 61 new stores in Japan, 27 in Europe and 44 in Australia and New Zealand.
CEO and managing director Don Meij says store growth has been complemented with digital advancements, including the Offers app, Pizza Chef and PayPal as a payment method.
“During the past 12 months in particular, we have invested in our electronic commerce capabilities to ensure we remain relevant to our customers changing preferences,” Meij says.
“We continue to invest in this area and have successfully implemented our global point-of-sale and online ordering systems from Australia into The Netherlands as a first step to updating all of the company’s European territories.”
Meij says product innovation has been “a big driver of increased sales” in Europe and Japan, introducing cheese stuffed crust, seafood pizza and chicken tandoori pizza in the regions.
He says the domestic market is still maturing, upgrading the target store count to 900 locations – almost 50 per cent more than the number open today.
In the first five weeks of FY15, DMP has already opened 14 new stores.
“We are confident of continuing the current strong momentum to deliver EBITDA growth in the region of 20 per cent and add approximately 175 to 185 new stores to the group,” Meij says.
“These numbers include the biggest pipeline of new stores we have had in Europe, giving us confidence across all three countries.
“We are working closely with the DPJ management team on a strategy which will see us continue to relocate stores to higher profile locations in FY15.
“We are confident this will assist in our goal to be the number one competitor in the Japanese market within 18 months.”
Meij says the company will invest in new initiatives as online sales strengthen, including GPS tracking and digital payments, as well as the Pizza Mogul app.
DMP will pay a fully-franked dividend of 19 cents per share, on top of the interim dividend of 17.7 cents, on September 12.
Shares are trading up 5.97 per cent at $21.84 each at time of press.