Domino’s profits up 16.9% on sales and expansion

Posted by Nicole Eckersley on 16th March 2011

Domino’s Square Puff PizzaAustralian pizza maker Domino’s Pizza Enterprises Limited (DMP) has been riding high, after announcing a $10.2 million half-year Net Profit After Tax – up 16.9% on the corresponding period last year – at its half-yearly results.

The company attributed the robust profit to strong core operations which saw the company achieve same store sales (SSS) growth of 9.1% above the same corresponding period last year.

The ANZ market experienced double digit SSS growth of 10.9% for the first half of the 2011 financial year with Australia achieving its strongest SSS in the last eight years.

Domino’s European market also recorded solid SSS growth of 4.7% compared to the first half of last year.

In addition, the company added 57 new stores over the two half-years, bringing the total Domino’s outlets to 844, including 536 in Australia and New Zealand and 308 across France, Belgium and The Netherlands.

Domino’s CEO and MD Don Meij said the strong first half results were supported by successful product launches in Australia and New Zealand.

“We have recorded a strong performance for the first half of the 2011 financial year, particularly in Australia and New Zealand where innovative new product launches, such as our Square Puff pizza and Prawn Pizza Range, have significantly contributed to strong sales and customer count growth,” Meij said.

“In Europe, network sales were up 14.4% on the same corresponding period last year, while core operating profits were up 52.3% before non-recurring items.”

An increase in the dividend payout ratio to 70% has given shareholders an interim fully-franked dividend of 10.4 cents per share, up 73.3% on the dividend paid in the corresponding period last year.

Meij said Domino’s strong focus on quality, choice, value and product innovation contributed to the success of recent promotions in Australia and New Zealand.

“We have seen significant results from our focus on improving the quality of our core pizzas and offering them at great value prices to our customers. We also know our commitment to offering greater choice on our menu is bringing more customers into our stores,” Meij said.

Across in Europe, Meij said the same store sales continued to be strong, while the brand continued its growth strategy in the first half by adding new stores and driving its online presence.

“We added ten new stores to our European market during the first six months of the 2011 financial year. Domino’s France is now the leading pizza company in terms of store count, sales and brand awareness. In The Netherlands, online ordering continues to grow with 38% of orders now placed through the website.”

Looking forward, Meij said the company had a well-developed product rollout plan for the remainder of 2011, including adapting Australian and New Zealand programs for the European market.

He also said record franchisee enquiries in Australia meant the company was confident of solid growth in the second half of 2011.

“We are on track to open 60 new stores this financial year and we are very impressed with the number of new franchisee enquires we are getting in Australia in particular. This interest will help spearhead our corporate store sell down and new store openings over the next six months,” Meij said.

“In terms of new product promotions, we will be launching our ‘Better Meatlovers’ promotion in Australia later this month and are confident we have the right product pipelines across the group to continue the momentum we have seen so far this year.”