Domino's Pizza smashes annual profits by 51%

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Domino Pizza increased annual after tax profit by 51% to $64.048 million, smashing expectations as the fast food chain drives revenue with digital innovation and rapid growth in the number of stores.

The pizza chain had forecast a 33% increase on the $42 million posted in 2014. Compared to underlying results, the profit is a 40% increase.

Investors sold down the company despite the result. A short time ago, Domino was trading at $38.00, down 7.6%.

Growth for the year was on the back of record store growth, strong operations in all six markets and digital innovation including GPS tracking of orders, easier online ordering, electric push bikes to cut local noise pollution and a 15 minute and 20 minute delivery guarantee.

Revenue was up 19.33% to $702.437 million.

CEO Don Meij says the company delivered another year of strong earnings growth.

“Product innovation continued to be core to our business with the ANZ menu inspired by the street food trend with flavours such as the launch of Pulled Pork, Pulled Beef and the popular oven baked Churros,” Meij says.

The company expects net profit to grow 20% in 2016.

“We plan on opening 180-200 new stores across the Group over the next 12 months,” Meij says. “This includes upgrading our Japan store count forecast from 700 to 850 stores.”

The plan is for 3,100 stores by 2025, including 850 in Japan.

“In ANZ we have in excess of 40 exciting digital projects in the pipeline for FY16,” Meij says.”This includes many that will make the ordering process even faster and easier for our customers with a 15 and 20 Minute Delivery Guarantee and Fast Favourites which allows customers to order in fewer clicks.”

Meij says new GPS tracking technology will continue to be the linchpin of the business and
drive sales, take operational execution and customer service to a new level.

“We have only just fired up the ovens on what is possible with GPS Driver Tracker,” he says. “The rollout of the 15 and 20 Minute Service Guarantee, a QSR first, means customers will reap the benefits of piping hot, fresh pizzas, reduced waiting times and increased convenience.

“The algorithm behind the 15 and 20 Minute Delivery Guarantee, as well as GPS Driver Tracker,
means it’s only activated when we can do this safely from an operations perspective.

“This move will see us compete in a new market, taking share from the convenient fast food drive-thru outlets.”

The company will pay a final fully franked dividend of 27.2 cents, bringing the full year dividend to 51.8 cents, up 41.1%.

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