Domino’s latest results show success of pizza disruptor, interested in acquiring Eagle Boys
Domino’s Pizza has reported record profit growth once again in announcing its 2016 financial year results whilst also confirming its interest in acquiring Eagle Boys.
For the 12-month period ended 30 June 2016, Domino’s overall network sales reached AUD $1, 964.1 million, a 32.7 per cent increase on its 2015 financial year results.
The takeaway pizza chain also achieved a record net profit after tax of AUD $92 million, up 43.6 per cent on the previous 12 months.
Domino’s attributed its results largely to “significant organic growth yielding strong same store sales” and “leveraging sophisticated digital platforms while adding 484 stores to the Group.”
Group Chief Executive Officer and Managing Director of Domino’s, Don Meji, also used the announcement of the financial results to confirm Domino’s was interested in acquiring Eagle Boys which entered into voluntary administration in July 2016 following years of dropping visitation rates. If Domino’s proceeds with the acquisition it would be part of plans to expand the number of its Australian and New Zealand stores to 1, 200 by 2025.
Technological innovation drives Australian and New Zealand profits
Australian and New Zealand Domino’s stores achieved an Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) 28 per cent larger than its 2015 financial year results.
Dominos reported that growth within the region was a result of launching a variety of disruptive technologies and initiatives including SMS ordering, ‘On Time Cooking’ (ensuring the pizza has just come out of the oven and is ready to go when the customer arrives) and Smart Watch ordering.
CEO Don Meji, said within the Australian and New Zealand market, the company is still focusing on using technology and innovation to win over customers.
“We are focused on improving technology, pushing safer, more efficient delivery, whilst investing in world class ordering platforms,” Meji said.
Meji stated that Domino’s Australia and New Zealand will continue to focus on its ‘Project 3/10’ which aims to have takeaway pizza ready in 3 minutes and deliveries at a customer’s door within ten minutes.
“We expect ‘Project 3/10’ to continue to be a significant sales stimulus over the next 3-5 years, with 10-minute delivery attracting drive-thru customers from our largest competitors,” Meji said.
Accounting for European tastes leads to success
Domino’s stores across Europe achieved a EBITDA 122.8 per cent larger than the previous year, which the company attributes to network sale growth and technology were also behind its European growth.
“This growth was largely attributed to ‘One Digital’ driving online sales and improved convenience and usability,” Meji said.
Pizzas catering for local tastes, such as Bitterballen and Beignets in Belgium, were also behind the strong results said Meji.
“Europe’s Development Chef introduced exciting, culturally relevant products to the menus in each market,” he said.
Domino’s rapidly expanding its presence across Japan
Japan achieved EBITDA growth of 25.5 per cent on the previous 12 months due to 69 new stores opening across the country.
“Japan made a number of changes and improvements to its menu in FY16, including the first ever upgrade to hand-tossed dough, a new pan pizza, an expanded chicken range and the winter campaign product, Quattro Rich,” Meji said.
Plans for the future
Moving forward, Domino’s says within Australia and New Zealand it will not only continue to focus on technology and Project 3/10, but it will soon undertake its broadest menu expansion since 2008.
“We will continue to target the drive-thru customer with ‘Project 3/10’ which offers customers faster, safer delivery and world-class ordering platforms,” Menji said.
“We are already seeing some incredible early results in stores with the goal to have more than 300 stores enabled to achieve ‘Project 3/10’ in FY17,” he said.
Internationally, Menji said the company will continue to transform Pizza Sprint outlets into Domino’s branded stores and it will continue to expand its stores and innovation technology.
In the 2017 financial year, Domino’s says it will also continue to work on removing artificial preservatives from its products.
Domino’s Australia is the franchisee of the American based Domino’s. Within the US, Domino’s has a market value of US $8.2 billion.