8th Mar 2018 08:51
LONDON (Alliance News) - Domino's Pizza Group PLC on Thursday reported a dip in annual pretax profit, but a rise on adjusted basis, and said that it intends to return an additional GBP32 million via a share buyback program in the new year.
A planned GBP50 million share repurchase program for 2018 includes GBP18 million already completed by the company.
The pizza retailer also said that it recorded 7.1% same store sales growth and 10.9% growth in system sales in the first eight weeks of 2018. The company plans to open between 65 to 75 stores in the UK during the year and expects to spend around GBP30 million for store openings and in supply chain investments.
Domino's Pizza recorded pretax profit of GBP81.2 million for the 53 weeks ended December 31, 2017, down from GBP82.5 million pretax profit in the 52 weeks period ended in December 31, 2016, on a revenue of GBP474.6 million and GBP360.6 million, respectively.
Group system sales for the year totaled GBP1.18 billion versus GBP1.16 billion. The core UK and Ireland division recorded system sales of GBP1.10 billion, up from GBP988.8 million in 2016. System sales represent the sum of all sales made by both franchised and corporate stores in the UK, Republic of Ireland, Switzerland, Sweden, Norway and Iceland to consumers.
The 2.0% year-on-year decline in pretax profit was attributed to higher non-underlying expenses, which totaled GBP15.0 million in 2017 versus GBP3.1 million in 2016. The expenses were related to provisions for potential employment tax liabilities on a historic share scheme, acquisition expenses, store conversion costs, and an impairment charges, partly offset by a net gain on acquisitions in the Nordics region.
The company's profit before tax and exceptional items grew to GBP96.2 million from GBP85.7 million.
"2017 has been a year of significant progress for Domino's, despite the weaker consumer demand and cost inflation affecting the sector. Given this backdrop, I am particularly pleased with our performance. In the UK, system sales broke through GBP1 billion for the first time, helped by a record 95 new store openings," said Chief Executive David Wild.
"Our international operations are becoming a more material part of the group. In Ireland and Switzerland, system sales growth accelerated, supported by very strong digital performance. In the Nordics, the move to majority control and the acquisition in Norway demonstrate our increasing confidence in the opportunity," Wild said, adding that he remains confident in the long term growth potential of the business."
Domino's Pizza raised its final dividend by 17% to 5.25 pence per share, giving a total payout of 9.00p, up from 8.00p paid a year ago.
Shares in the company were up 3.4% at 329.10 pence in early trade.
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