Domino’s has capitalised on its 20% share of the UK foodservice delivery market with 2020 sales up 11.4% to £1.3bn, and like-for-like sales growth of 10.3%.
The UK & Ireland business made underlying profit before tax of £101.2m for the full year, and spent £9m in Covid-19 costs to support franchisees to trade safely.
Domino’s also announced a new strategic plan, which targets medium-term sales of £1.6bn-£1.9bn, and 200 new stores.
The company said it has made an “attractive offer” to franchisees on the benefits of the plan, but had yet to reach agreement.
Statutory profit after tax was £39.7m, up from £2.8m, with a loss on discontinued international operations of £42.5m, including £22.6m of impairments of international operations. Net debt was reduced by 26% to £171.8m.
The public listed group remained open throughout the year, reporting strong growth in its delivery business, offsetting the significant impact Covid-19 had on collection.
On its new strategic plan, Domino’s said it had maintained “constructive engagement” with its franchisees, and made an attractive offer in an attempt to “reset the relationship”, after a period of acrimony.
The group hopes to accelerate the growth of its delivery business, opening an additional 200 stores.
To achieve this, Domino’s will seek new franchisees, and undertake a review of future store formats, which will “unlock the next wave of growth in the system”.
It pointed to average store EBITDA for UK stores in 2020 approximately £229k, equivalent to a 20% EBITDA margin.
Meanwhile it aims to double the market share of its collection business. As part of this it will re-design its in-store collection and food offer, and also roll out an in-car collection service, with an aim to have 450 stores offering the service by the end of June.
Digital transformation was accelerated, with UK online sales up 23.9% and app sales up 26.2%. Online sales now account for 94.3% of delivery sales in the UK.
Capitalising on the “scale and depth” of its vertical integration, Domino’s plans to roll out new digital platforms.
“We have demonstrated we have a flexible and robust business model that has been able to adapt to the uncertain and changing market conditions throughout 2020,” the company said. “The current trends and demand expectations, in addition to the investment in capabilities we have and are making, gives us confidence in delivering further operational and financial progress in the coming year.”
Chief executive Dominic Paul said Domino’s had played its part in feeding the nation during the pandemic, while continuing to invest and innovate, with a new vegan pizza and consumer app.
He said the multi-year strategic plan would deliver powerful benefits to franchisees and the group.
Paul added: “As the economy begins to reopen, we have invested in our capabilities to enable us to capitalise on the substantial opportunities ahead. I am confident that we can achieve our vision of being the UK and Ireland’s favourite food delivery and collection brand, and deliver great results for our colleagues, our customers, our shareholders and our franchisees.”
Domino’s aims to ‘reset’ franchisee relationship
Domino’s has capitalised on its 20% share of the UK foodservice delivery market with 2020 sales up 11.4% to £1.3bn, and like-for-like sales growth of 10.3%. Domino’s also announced a new strategic plan, which targets medium-term sales of £1.6bn-£1.9bn, and 200 new stores. The company said it has made an “attractive offer” to franchisees on the benefits of the plan, but had yet to reach agreement.