DOMINO'S SHARES TAKE A HIT AS FY RESULTS FALL SHORT OF EXPECTATIONS
Written on the 15 August 2017 by Janelle Alawabdeh
Domino's Pizza (ASX: DMP) has boosted its full year net profit by 24.8 per cent to $102.9 million, but its share price has taken a battering as its full year results fell short of its guidance provided early this year.
At around 10.40am (AEST) DMP shares were down by 15 per cent to $43.49 even though it reported double digit sales growth in Australia, New Zealand, Europe and steady gains in Japan.
Domino's lifted its full year earnings forecast in February, saying it anticipated net profit and underlying earnings would increase by 32.5 per cent.
Revenue for the year to July 2 rose 15.4 per cent to $1.07 billion, while underlying net profit after tax for the 12 months to June 30 was $118.5 million at a 28.8 per cent increase on the prior corresponding period.
Group CEO and managing director Don Meij says despite the solid results, management did not reach its own expectations.
"I acknowledge our results, while strong, did not reach the guidance we set," Don Meij says.
"This was largely due to the delay in rectifying some issues with our online platform in France, and the initial response in H2 to our value range offering in France, which did not meet our expectations both have now been addressed," he says.
"We set high standards and we did not reach those high standards. I am confident we have the right strategy and structure, in place this has delivered, and will continue to do, increasing sales and improving profitability in what is high-growth business."
In FY15, the earnings before interest, tax, depreciation and amortisation rose 28.3 per cent to $230.9 million.
The company announced $300 million of a share buyback will be funded through new and existing debt facilities.
Domino's will pay a partially franked final dividend of 44.9 cents per share bringing it to a full year payout to 93.3 cents per share at a 26.9 per cent increase over the past financial year.
Domino's also plans to open approximately 180 to 280 new stores and expects NPAT to rise up to 20 per cent in FY18.
Business News Australia
Author: Janelle Alawabdeh Connect via: Twitter