Domino's Pizza (DOM) full-year results suggest UK consumers can't get enough of pizza delivery. Shares in the company rose 6 per cent after it reported an 11 per cent increase in like-for-like sales in Britain and an equally encouraging performance in Ireland.
Taken together, underlying pre-tax profit in the UK and Ireland grew 14 per cent to £63.1m. Chief executive David Wild said new products and pizza meal deals, complete with sides and desserts, helped fuel demand. Domino's big investment into digital also seems to be paying off. Online sales in the UK now account for 70 per cent of total delivered sales, and most online sales come via mobile phones.
Unfortunately, the German business is still soggy. The franchise model hasn't worked out, so management will stop expanding the network until it finds an economically viable operating structure. Losses totalled £7.3m, but Mr Wild still thinks Domino's can break into the German market. Despite this weak spot, group underlying pre-tax profit grew 15 per cent to £54.8m, while strong cash flow has left the company with net cash balances.
Peel Hunt is looking for pre-tax profit of £62.4m this year, giving EPS of 30p, up from £55.3m and 26p.
| DOMINO'S PIZZA (DOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 740p | MARKET VALUE: | £1.2bn | |
| TOUCH: | 739-741p | 12-MONTH HIGH: | 751p | LOW: 497p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 44p | NET CASH: | £11m | |
| Year to 28 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 188 | 45.2 | 15.4 | 10.2 |
| 2011 | 210 | 38.8 | 16.7 | 12.3 |
| 2012 | 241 | 42.4 | 19.0 | 14.5 |
| 2013 | 267 | 21.6 | 10.7 | 15.9 |
| 2014 | 294 | 53.8 | 25.9 | 17.5 |
| % change | +10 | +149 | +142 | +10 |
Ex-div: 05 Mar Payment: 27 Apr | ||||
