Domino’s Pizza Enterprises (DMP) got a big cheer from investors yesterday with the 2013-14 result getting a double digit lift from the market.
Domino’s boosted total 2013-14 dividends by nearly 19% to 36.7c a share after the company confirmed that its expansion into Japan was paying off.
The company declared a final fully franked dividend of 19c a share, in addition to the interim dividend of 17.7c.
What is clear from the results is that its cheap pizza model home delivered, but ordered more and more from mobile devices, is a big success.
And there was another confident outlook from the company with a forecast 20% rise in earnings before tax, interest, depreciation and amortisation.
The shares have been on a roll in 2014, especially after the better than expected interim figures were released in February.
Yesterday the shares jumped 13.5% to $23.39. The shares jumped more than 5% in afternoon trading on top of the big start to the day.
DMP 5Y – Domino’s delivers again
So much so, that its new low price cheap pizza deal has helped give the company a bang up start to 2014-15 with double-digit sales growth for the first five weeks of of the year across its European, Australian and New Zealand markets.
In its first full year of owning a controlling 75% stake in the Domino’s chain in Japan, the Australian based company reported a 50.4% lift in underlying net profit to $45.8 million as revenue nearly doubled – thanks to the acquisition of the Japanese franchise – to $588.7 million for 2013-2014.
Actual net profit for the year was $42.3 million against a profit of $28.7 million in 2012-13, a rise of more than 50%.
The company reported a 70% lift in underlying earnings before interest, tax, depreciation and amortisation to $95.1 million, which its newly acquired stake in the Japanese Domino’s chain contributed boosted by $27.4 million.
The strong trading results in Australia and New Zealand, structural changes gaining momentum at its European stores as well as a store relocation strategy and new advertising push across Japan had bolstered the full year results for the group. (No sign of any softness in consumer demand in the June quarter.)
Same store sales across the group grew by 5.8% in the year to June, including a very strong 6.3% rise in Australia and New Zealand.
Same store sales in Japan for the first full year under its control was 10.7% (which was very solid given the rise in the country’s sales tax to 8% from 5% on April 1).
CEO Don Meij said in yesterday’s statement the outlook for fiscal 2015 was good as momentum from 2014 continued.
He said in the first five weeks of 2014-2015 double digit sales growth of 14.8% had been recorded in Europe against a fall of 5% for the same period last year.
Australia and New Zealand had shown same store sales growth of 10.3% so far, against 4.7% in the first five weeks of 2013-2014. Japan had recorded a 6.9% increase in same store sales in the same period.
Mr Meij said its flagship Australia and New Zealand market was ‘’far from mature’’ with target store counts for the region upgraded from 800 to 900 stores, or 50% more than the number open today.
He said the company was continuing to attract greater orders from customers online, pushing to more than 60% of orders coming via laptops, iPhones, tablets and other devices.
Looking to the current year, Mr Meiji said: “We are confident of continuing the current strong momentum to deliver EBITDA growth in the region of 20% and add approximately 175-185 new stores to the Group,” Mr Meij said.
“These numbers include the biggest pipeline of new stores we have had in Europe, giving us confidence across all three countries.
"Pizza Mogul, an interactive new website and app dedicated to pizza lovers was also launched in Australia in August to help drive sales, increase average ticket and improve customer engagement.
"As online sales continue to strengthen, the Company will continue to invest in new initiatives including GPS tracking solutions, digital payment options and the continued evolution and growth of Pizza Mogul.
“This platform is set to catch the next wave of social retailing and will continue to drive sales and deliver a new level of user generated content – with thousands of Moguls and pizzas created already, the potential is exciting.
“In Europe we will continue to roll out our global online ordering system, and the existing point of sale system will also be converted to the global point-of-sale system in Belgium with expected completion for November.
"France begins its rollout in February with a significant part of the project expected to be completed by June 2015,” Mr Meiji added.
This could prove to be the result of the June 30 reporting round, just as its interim result earlier this year stood out for the half year reporting season.
It shows that it’s not just the Americans who can build and run a fast food group.
