12th Mar 2019 08:15
LONDON (Alliance News) - Domino's Pizza Group PLC on Tuesday reported a slump in its annual profit mainly due to charges related to a UK supply chain restructuring and international impairments.
Shares in the FTSE 250 pizza delivery company were trading down 2.6% at 227.12 pence each early Tuesday morning.
For the year ended December 30, the pizza company posted pretax profit down 24% to GBP61.9 million from GBP81.4 million a year prior, on a 53-week basis.
Domino's annual results a year ago covered the 53 weeks to the end of 2017.
On an adjusted basis, pretax profit dipped 1.1% to GBP93.4 million from GBP94.4 million on a 52-week basis and down from GBP96.2 million over 53 weeks.
The adjusted profit figure excludes net charges of GBP31.5 million relating mainly to International impairments and UK supply chain transformation and integration costs.
Revenue meanwhile, rose 15% to GBP534.3 million from GBP466.5 million a year ago, on a 52-week basis. Over 53 weeks, the firm's revenue in 2017 amounted to GBP474.6 million.
Group system sales, representing the sum of all sales by both franchises and stores, increased 9.0% in the year to GBP1.26 billion from GBP1.16 billion a year prior in the comparable 52 weeks period.
In the UK and Ireland, Domino's core geographies, system sales were up 7.0% to GBP1.16 billion from GBP1.08 billion. Like-for-like sales rose 4.6%.
International system sales increased 7.7% during the year.
"2018 was a mixed year. In the UK and Ireland, which account for around 90% of the business, we extended our excellent track record of growth and cash generation, responding well to the very challenging environment for the casual dining market," Chief Executive David Wild said.
He added: "Internationally, we have experienced some growing pains which have hampered our overall financial performance. These are all good markets, with more than 100 million population, good appetites for pizza and little, if any, global brand competition."
During the year, Domino's opened 81 new stores across all regions, with 58 of them in the UK.
The company recommended a total dividend of 9.50 pence per share, up 5.6% from last year's total payout of 9.0p.
Looking ahead, Domino's expects continued growth in the UK while the firm targets International breakeven.
"2018 has been a year of solid financial performance, but we are determined to improve operational and financial performance in our international businesses, and ensure a smoother relationship with some of our franchisees," Chair David Brandon said.
He added: "Despite some economic and political challenges, as the leading brand in the most popular cuisine in the market, supported by outstanding business partners and over 10 million customers, we are well set for profitable growth."
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