Domino’s Pizza Group has reported that system sales increased by 14.6% to £766.6m in 52 weeks to 28 December 2014, driven by like-for-like sales growth of 11.3% in its 724 UK mature stores.
The group reported underlying pre-tax profit of £54.8m, up 15.1% (2013: £47.6m). Underlying pre-tax profit for its UK & ROI operation increased by 14.3% to £63.1m (2013: £55.2m). The UK business achieved sales growth of 16% including 11.3% like-for-like.
During the year, its UK and ROI business sold, on average, over 1.4 million pizzas each week.
It said that like-for-like sales in the first eight weeks of 2015 in the UK increased 9.5%.
During 2014, the company opened 40 stores in the UK. It said that these units performed “very well”, achieving average weekly unit sales (‘AWUS’) of £13,555, 6.9% better than those opened the previous year. It said that equally encouraging was the performance of its immature stores opened in 2013. On average their AWUS was £13,279, 27.9% better than the 2012 cohort delivered the previous year.
UK & ROI online system sales increased by 30.2% to £440.0m (2013: £338.0m) with online sales accounting for 69.4% of UK & ROI delivered sales (2013: 61.5%). Of this, 44.2% of online orders were taken through a mobile device (2013: 30.9%).
The company opened 44 new stores in the period (2013: 57 stores) with eight closures (2013: four) resulting in a total of 894 stores across four countries as at 28 December 2014.
The group said: “We are particularly pleased with the performance of our new UK stores; in 2014 we opened successfully in smaller territories and are confident that our model generates a profitable return for franchisees in lower address count communities. This gives further confidence that our long-term target of 1,200 UK outlets is achievable over the coming years.”
In the UK in 2014, 53.3% of total orders were made by customers online, up from 47.2% in 2013. Expressed as a total of delivered orders, e-commerce customers represented 70.6%.
During 2014, the group enhanced its mobile app and launched a new website. It said that the changes, coupled with further diversion of marketing funds from conventional media into digital, drove significant growth in its online sales.
It said that customers who shop online have a higher rate of conversion, buy “from us more frequently, spend more per visit, hold the brand in high regard and are less costly for our franchisees to service”. By the end of 2014, 8.2m customers had downloaded its app, up from 3.2m at the start of the year.
David Wild, chief executive, said: “It has been another strong year for Domino’s, particularly in our core UK market, confirming the strength of our customer offer. Both UK like-for-like sales and new store performance were excellent and this has largely been driven by our sector-leading e-commerce initiatives. Our renewed focus on franchisee profitability has also provided an impetus to continued growth.
Outside the UK, we are pleased with progress in Ireland and Switzerland, both of which showed improvement. In Germany, there remains much work to do, but underlying losses have reduced, in the second half and we remain optimistic about the opportunity in this market.
These results are a tribute to the entire Domino’s team, including the franchisees and their colleagues, who work in the stores and served our customers with more than 75 million pizzas during 2014. I would like to thank them for their amazing efforts.
We look forward with continued optimism. We have a great brand and a strong plan; the year has started promisingly, but there are tough comparators to beat, so we will not get complacent and will continue to ensure Domino’s remains the Number One pizza brand in the UK.”
The Board recommended a final dividend for 2014 of 9.69p (2013: 8.80p).