Domino’s Pizza’s half-year profit climbs 80.6%
Monday 20 February 2006
Domino’s Pizza’s half-year profit climbs 80.6%
Listed pizza maker Domino’s Pizza Australia New Zealand Ltd today announced a $6.5 million half year net profit after tax, up 80.6% on the first half of 2005. The strong result has also prompted the Company to upgrade its full-year guidance. The profit for the 26 weeks ending 1 January 2006 was generated from total network sales of $176.6 million, an increase of 18.8% on the first half of 2005.
Same store sales for the half year grew 5.01% on the first half of 2005. During the half-year, Domino’s Pizza added 28 stores to its network ending the period with 415 stores across Australia and New Zealand. Of these, 365 stores were in Australia and 50 were in New Zealand. Domino’s Pizza Chairman Ross Adler said the Company would pay shareholders an interim fully-franked dividend of 4.1 cents per share.
This represents an increase of 20.6% over the Prospectus forecast interim dividend of 3.4 cents per share. The dividend will be paid on 12 April 2006 with a record date of 5 April 2006. Mr Adler said today the Company operated 418 stores (including one store opening today) and planned to open another 18 stores, before the end of the financial year. This will give a financial year end total of 436 stores.
This represents an 18 store increase on the 2006 Prospectus forecast. “Over the past six months, sales have been driven by the launch of new products and innovative marketing campaigns to drive customers to our door.
Domino’s Pizza has also reinforced its position as a consumer staple, demonstrated by the 5.01% jump in same store sales during the period – a very strong result in today’s retail environment,” he said.
“We are also starting to see the benefit of our technology innovations, including the delivery of mobile phone ordering nationally, the phased roll-out of internet ordering and the ongoing adoption of PULSE, our state-of-the-art point of sale system, by stores to increase ordering efficiency. H106 Actual H105 Actual + / - F/Y 06 IPO Forecast
Store count 415 333 - 418 Total Network Sales $176.6m $148.6m +18.8% $350.5m Same Store Sales 5.01% - - 2.6% Revenue $87.8m $62.0m +41.6% $151.9m EBITDA $12.2m $8.7m +40.2% $21.4m EBIT $9.2m $6.1m +50.8% $15.5m NPBT $8.4m $5.1m +64.7% $14.6m Net Profit After Tax $6.5m $3.6m +80.6% $10.2m EPS 10.9c 7.6c 17c
“Based on current trading conditions and our expectations for the next six months, we have now upgraded our full-year net profit after tax forecast from $10.2 million to be in excess of $12 million. “We have upgraded our full year same store sales forecast from 2.6% to 3.9%.
“We have also upgraded our full year earnings per share forecast from 17 cents to be in excess of 20 cents. “ Domino’s Pizza CEO Don Meij said the Company’s current target was to develop a network of at least 620 stores across Australia and New Zealand. “New Zealand stores have seen significant sales and revenue growth in recent months as the operation began to develop critical mass. The New Zealand market is on-track to deliver its full-year IPO forecast,” he said.
“At the same time, the performance of the Australian stores remains strong and is growing. In Melbourne, our newest Australian market, Domino’s Pizza is building its footprint and finished the half-year with 46 stores.
“In the next six months, we will be looking to exploit the opportunity to grow faster in new markets with the opening of more corporate stores. We are also targeting expansion into smaller regional towns, satellite cities and smaller suburban areas through the trial of a new small store concept and a Jetstar alliance.”
To promote the brand in regional areas, Domino’s Pizza recently launched its ‘Puff Plane’– a Jetstar Boeing 717 fully covered by Domino’s Pizza advertisement for Puffection, Australia’s first puff pastry pizza base. Mr Meij said Domino’s Pizza had cemented its position as a staple for Australian consumers.
“Industry trends show that pizza is an affordable, regularly-consumed family meal and that demand for pizza is less likely to be impacted by economic factors, such as rising fuel costs and interest rates,” he said.
“As Australian households increasingly seek more affordable meal options, we are actively researching and providing innovative menu items and bundling deals to meet their demands.” Domino’s Pizza Australia New Zealand Ltd and its franchisees operate 418 stores across Australia and New Zealand, employing more than 11,000 staff and making more than 40 million pizzas each year. Domino’s Pizza (DMP) is Australia’s first publicly-listed pizza chain, making its debut on the Australian Stock Exchange in May 2005.