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Domino’s Delivers Solid Full Year Results

Domino’s Delivers Solid Full Year Results Including Double Digit Profit Growth

Domino’s Pizza Enterprises Limited (DMP) today announced an underlying** Net Profit After Tax to shareholders of $30.4 million, an increase of 13.0% on the previous year, with results revealing the leaders in the Australian pizza industry continue to deliver value for money through accessible ordering platforms.

The year’s profit was generated from Total Network Sales of $848.6 million.

The Company achieved Same Store Sales (SSS) growth of 2% rolling 6.5% from last year. The Company will pay shareholders a final fully-franked dividend of 15.4 cents per share, in addition to the interim dividend of 15.5 cents per share. This brings the full year dividend to 30.9 cents.

In addition to the dividends, a $30 million capital return was made to shareholders during FY13, bringing the total return to shareholders in the year to 73.7c per share.

The final dividend will be paid on Friday 13 September 2013 with a record date of Tuesday 27 August 2013.

Full Year 13 StatutorySignificant Charges**Full Year 13 Underlying**Full Year 12 Actual+ / -
Store count970970908
Total Network Sales$848.6m$848.6m$805.3m5.4%
Same Store Sales2.0%2.0%6.5%
Net Profit After Tax$28.7m$1.8m$30.4m$26.9m13.0%
Dividend (fully-franked)30.9c30.9c27.1c14.0%

*Figures in the above table have been rounded to one decimal. Percentages (%) have been calculated on actual figures.

** Underlying profit is the Statutory profit contained in Appendix 4E of the Domino’s FY13 Annual Report adjusted for significant items specific to the 2013 Financial Year. Significant charges included transaction, acquisition and additional legal charges relating to acquisition activity and costs associated with ongoing legal claims in France

Domino’s CEO and Managing Director Don Meij said the solid full year results, including the double digit profit growth, were attributed to successful new product innovations across both markets and a significant increase in sales coming from continued advancements in digital platforms.

“Our solid performance for the 2013 full year is the result of product innovation, rolling out new products including the biggest product launch in 20 years with the addition of our new Chef’s Best range and the successful launch of the Artisan pizza range in France,” Mr Meij said.

“The results also reflect our commitment to providing our customers greater accessibility and flexibility around ordering platforms, particularly in the current global environment.

“We have made it a strategic priority over the past 12 months to be more accessible to our customers through a comprehensive range of online ordering interfaces, including improved platforms to showcase our product range, all using HTML5 technology, a new iPad and Facebook App.

Mr Meij said innovations such as these will help drive the Domino’s digital growth over the coming year.

“Our determination to be the market leader for digital innovation has already seen us achieve over 50% of sales and customers are now accessing Domino’s faster, easier and with more control than ever before.”

DMP reported strong underlying** EBITDA of $55.9 million, an increase of 16.2% over the corresponding period last year.

“The Australian and New Zealand market continued to benefit from a combination of improved margins, economies of scale and the continued sell down of corporate stores, recording EBITDA growth of 17.5%.”

During the 12 months to 30 June 2013, Domino’s Pizza Enterprises added a record 67 new stores to the network, comprised of 27 stores in Australia and New Zealand and a record number of 40 new organic stores in Europe, taking the year-end store count for the Group to 970.

“We also opened our 500th Australian store during the year, a milestone we are extremely proud of,” Mr Meij said.

Acquisition - Global Growth

Today, Domino’s Pizza Enterprises (DMP) also announced that it has executed a share sale agreement with Bain Capital Partners (“Bain Capital”), to acquire a 75% equity interest in Domino’s Pizza Japan (DPJ) for ¥12.0 billion. Including new debt of ¥9.0 billion, this price is equivalent to a ¥25.0 billion enterprise value on a 100% basis.

DPJ is the third largest pizza delivery chain in Japan with 259 stores, comprising 216 corporate stores and 43 franchise stores. DPJ operates under a 20 year Master Franchise Agreement with Domino’s Pizza Inc. that commenced in March 2011, with an option to extend for a further 10 years.

Mr Meij said the acquisition represents an exciting opportunity to leverage the proven track record of successfully growing the Domino’s network to deliver shareholder value.

“We look forward to the ability to introduce DMP’s product expertise, innovation and digital leadership to Japanese customers. The acquisition increases DMP’s total store network to over

1,200 stores, further cementing DPE as the leading international Domino’s franchisee.”

*For more information about the DPJ acquisition please refer to the separate ASX Announcement posted by DMP today. (see here for this release)

Outlook for FY14

Outside of the Domino’s Japan acquisition, the Company has a busy year ahead with the recent upgrade to HTML5 technology in ANZ meaning a bigger push towards digital to drive sales and customer count further.

The European market will be similarly busy with the continued rollout of the Pulse POS system, as well as the move to HTML5 technology which will see the majority of ANZ systems implemented into The Netherlands business by December 2013.

“Looking forward to the 2013/14 Financial Year, we are confident of continuing the current momentum and we expect to deliver an EBITDA in the region of 15%, and to add approximately 70 to 80 new stores to the network during this time,” Mr Meij said.

“We expect to have a record number of organic new store openings, particularly in our three European countries, and we will continue to push ourselves to reach new milestones in this area.”

DMP continues to work towards the goal of reaching 80% of business through online sales and we are committed to new digital platforms to help facilitate expected sales growth.

“Our digital business continues to set Domino’s apart from our peers and we will strive to grow this area even further in H1 14 through aggressive online, print, point of sale and our biggest television and marketing campaign in two years.”

DMP was Australia’s first publicly-listed pizza company and is the master franchisor for the Domino’s Pizza brand in Australia, New Zealand, France, Belgium and The Netherlands.


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