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Domino’s Nail Another Financial Period

Domino’s Nail Another Financial Period
Aug 11, 2015 By Ben Visser

Domino’s Pizza Enterprises Ltd (ASX:DMP) released its full year FY15 results this morning, recording a significant increase in net profit after tax.

On the back of record store growth, strong operations in all six markets and industry-shifting digital innovation, Domino’s has delivered a Net Profit after Tax of $64.0 million, an increase of 40 per cent on the previous corresponding period. I addition to the increase in profit, the company has announced the final, fully franked dividend will be 27.2 cents, bringing the full year dividend to 51.8 cents, up 41.1 per cent on the previous corresponding period. The final dividend will be paid on the 11th September with a record date of 25 August.

Australia and New Zealand recorded a strong Same Store Sales (SSS) growth of 11.3 per cent, largely driven by success of digital and product innovation and the interactive Pizza Mogul platform which continue to grow digital sales, increase lunch sales and attract new customers.

The European market recorded strong SSS growth of 6.4 per cent, driven by innovative marketing, strong management and traction in digital developments. This was despite a VAT increase in France and facing a tough macro environment.

Domino’s Pizza Japan (DPJ) continues to trade to expectations during this phase of investment. Network Sales grew 14.8 per cent on a full year bases and SSS growth of 1.8 per cent was recorded. This was despite the implementation of the new sales tax in the 2014 calendar year and a tough economic environment.

In 2016 the company plans on driving and delivering innovation at an increased pace, fuelling growth and taking market share from other categories.

Group CEO and Managing Director, Don Meij commented, “We plan on opening 180-220 new stores across the Group over the next 12 months. This includes upgrading our Japan store count forecast from 700 to 850 stores. This is based on territory optimisation as well as continued expansion across the country. The ANZ and Europe store count targets remain unchanged. The updated Group plan now reaches 3,100 stores by 2025, including the upgrade of the outlook for Japan being in excess of 850 stores”

Financial year 2016 SSS guidance going for is set in the region of 6-8 per cent for ANZ, 4-6 per cent for Europe and 1-2 per cent got Japan. EBITDA and Net Profit after Tax growth guidance is estimated at around 20 per cent.

Following strong half year results earlier this year, the share price for Domino’s rallied. The company has experienced strong growth in its share price for several years now and the company continues to perform well. Following this morning’s announcement Domino’s opened trading down 7 per cent. This may largely be due to the smaller expected growth rate going forward, however a full day of trading will give a better indication of investor sentiment towards the company.

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Ben Visser Author: Ben Visser Aug 11, 2015

Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.

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