Domino’s Pizza’s (DOM) sales growth slowed in the UK and Ireland to 4.8 per cent in 2019 from 7 per cent the year prior. Pre-tax profits tumbled as the company exited its overseas businesses over the course of the year – hardly surprising given losses from discontinued operations amounted to £56.5m.
Like-for-like sales in the UK grew, but the pizza delivery group’s orders dipped by 2 per cent on the same basis. Online sales in the UK were up by 8.6 per cent, and now account for 91.1 per cent of total delivery revenue. But chief executive David Wild identified collection as a key point of growth, which rose by 5.3 per cent in 2019. The company is now looking at items suited to collection rather than delivery, such as smaller pizzas.
Management said that it aims to target growth in the London area, as it is “currently under-penetrated” there compared to the rest of the UK. The pizza group opened 32 stores in the UK and Ireland, of which 29 were franchised. But Domino's continues to butt heads with its franchisees over profit-share, a serious strategic issue given they operate more than a third of its stores throughout the countries.
Broker Peel Hunt forecasts an adjusted EPS of 17.6p and adjusted pre-tax profits of £99.8m in 2020, compared with 17.8p and £98.8m in 2019.
| DOMINO'S PIZZA (DOM) | ||||
| ORD PRICE: | 292p | MARKET VALUE: | £1.35bn | |
| TOUCH: | 291-292p | 12-MONTH HIGH: | 336p | LOW: 219p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 23 | |
| NET ASSET VALUE: | * | NET DEBT: | £232.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 317 | 73.2 | 11.9 | 6.9 |
| 2016 | 361 | 82.5 | 13.1 | 8.0 |
| 2017 | 475 | 81.4 | 13.8 | 9.0 |
| 2018 | 493 | 87.1 | 15.1 | 9.5 |
| 2019 | 508 | 75.1 | 12.9 | 9.8 |
| % change | +3 | -14 | -15 | +3 |
| Ex-div: | 19 Mar | |||
| Payment: | 27 Apr | |||
| *Negative shareholders' funds | ||||
