26th Feb 2015 08:39
LONDON (Alliance News) - Domino's Pizza Group PLC Thursday said strong profit and revenue performance in its last financial year, driven by its UK business and successful meal-deal bundles, prompted a more than 10% increase in its dividend for the year, while it highlighted a confident outlook for the year ahead.
The pizza delivery company said it served up more than 75 million pizzas during 2014. It declared a 10.1% increase in its total dividend for the year to 17.50 pence per share, as it reported a pretax profit of GBP53.8 million for the year to December 28, up from GBP21.6 million a year earlier, driven by a 10.3% increase in revenue to GBP294.4 million. System sales were up close to 15% at GBP766.6 million.
The group said its profit was also supported by lower administrative expenses, which decreased to GBP40.3 million, from GBP61.5 million the year before.
Domino's said the growth was driven by its UK business, online sales, and its meal-deal promotions.
"It has been another strong year for Domino's, particularly in our core UK market, confirming the strength of our customer offer. Both UK like-for-like sales and new store performance were excellent and this has largely been driven by our sector-leading e-commerce initiatives. Our renewed focus on franchisee profitability has also provided an impetus to continued growth," said Chief Executive David Wild in a statement.
Underlying profit before tax for UK and the Republic of Ireland increased by 14.3% to GBP63.1 million, as online system sales increased by over 30% to GBP440.0 million, almost half of which it said were taken through a mobile device.
"The UK business achieved sales growth of 16% including 11.3% like-for-like sales growth. This was a strong and pleasing performance, which reflects not only the strength of the business, but also the opportunity for further expansion," the company said.
"Part of our success in 2014 can be attributed to recovery in the UK economy, as well as the benefits of an effective football World Cup campaign. The sales growth was boosted especially by the continued stream of family meal bundles and the execution of our e-commerce programmes," it added.
During 2014, the group opened 40 stores in the UK. The group also said that it is "optimistic" it will see new store opportunities in the Republic of Ireland in 2015.
Domino's said its sales performance in Germany disappointed in 2014, although it said it saw some modest improvement towards the end of the year.
"The financial performance continues to be a concern, but losses narrowed sharply in the second half, compared to 2013 and we expect this trend to continue into 2015," the company said.
Domino's said like-for-like sales in the first eight weeks of 2015 are up 9.5% in the UK, 4.8% in the Republic of Ireland and up 7% in Switzerland. Its said sales were up 0.1% for its fledgling German business during the period.
"We look forward with continued optimism. We have a great brand and a strong plan; the year has started promisingly, but there are tough comparators to beat," said Wild.
Domino's Pizza shares were up 2.5% at 710.00 pence Thursday morning, one of the best-performing stocks on the FTSE 250.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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