Domino’s delivers on profit

 

dominos cheltenhamDomino’s Pizza has delivered a 28.2 per cent rise in first half profit, due largely to a successful entry into the Japanese fast food market.

The pizza maker on Wednesday served up an $18.644 million net profit for the six months to December 29, up from $14.543 million in the previous corresponding period.

Domino’s CEO Don Meij said last August’s expansion into the Japanese market had exceeded expectations, achieving a record sales month of 3.6 billion yen ($A38.9 million) in December 2013, up from a previous record of 2.9 billion yen ($A31.4 million).

“We are also extremely excited to report that we have surpassed Pizza Hut in total network sales to become number two in the Japanese market,” he said.

Meij also attributed the solid results to a record number of new stores and a boost in online and mobile sales.

Domino’s opened 60 new outlets across the group, boosting network sales 39.9 per cent to $576.2 million, up from $411.8 per cent a year ago.

In Australia, almost 60 per cent of total sales now come from online, with more than 50 per cent of those from mobile devices, Mr Meij said.

First-half same-store sales (SSS) grew 4.6 per cent overall, compared to 1.5 per cent a year ago.

Meij said the company expected SSS growth in Australia, New Zealand, and Europe to remain steady over the full year at two to four per cent.

But in Japan it expected SSS growth at five to seven per cent, up from one to two per cent last August.

Domino’s forecast it would have a total of 2,000 new stores within the next five years.

It therefore increased its net capital expenditure guidance for 2013/2014 in the Australia, New Zealand and Europe regions to $30-35 million from $20-25 million six months ago.

In Japan that was increased to 1.5-2 billion yen ($A16.2-21.6 million) from 1.2-1.7 billion ($A13-18.4 million) in August last year.

The company will pay shareholders an interim fully-franked dividend of 17.7 cents per share, up 14.2 per cent on the last comparative period.

The company’s shares were up 92 cents, or 5.37 per cent, at $18.05 at 1208 AEDT.

AAP

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