domino’s pizza · 2014-02-14 · analysis of shareholder funds at at 2 jan 2005 28 dec 2003...
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Domino’s Pizza UK & IRL plcPreliminary Results for the 53 weeks ended 2 January 2005
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Domino’s Pizza UK & Irl plc
Stephen Hemsley, Chief Executive
Lee Ginsberg, Finance Director
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Domino’s Pizza UK & Irl plc
Financial Highlights
• PBT of £8.8m, an increase of 34.9% (2003: £6.5m)
• Earnings per share:- Basic up 46.7% to 13.23 pence (2003: 9.02 pence)- Diluted up 51.0% to 12.67 pence (2003: 8.39 pence)
• Total dividends up 50.0% to 5.25 pence for the year (2003: 3.50 pence)
• System sales up by 22.5% to £174.3m (2003: £142.3m)
• 40 new delivery stores opened and 1 closed during the year (2003: 50 openings, 1 closure)
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Domino’s Pizza UK & Irl plc
Financial Highlights contd.
• Like-for-like sales up 6.6% (2003: 7.4%)
• Store count now up to 357 (2003: 318 stores)
• Net interest covered 33.7 times (2003: 29.3 times)
• Strong cash generation with cash on hand of £4.8m (2003: £3.7m)
• Share buy-back commenced during year- 800,000 shares at cost of £1.6m (2003: nil)
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Financial PerformanceProfit and Loss
53 weeks to 52 weeks to %2 Jan 2005 28 Dec 2003 Increase
£’000 £’000
System sales 174,292 142,265 22.5Statutory sales 74,215 61,557 20.6Operating profit * 9,138 6,498 40.6(Loss)/profit on FA & exceptionals (47) 243Profit before interest and tax 9,091 6,741 34.5Net interest payable (270) (204) Profit before tax 8,821 6,537 34.9Taxation (2,058) (1,958)Profit after tax 6,763 4,579 47.7Dividends 5.25p 3.50p 50.0Earnings per share
- Basic 13.23p 9.02p 46.7- Diluted 12.67p 8.39p 51.0
* Before sale of assets and exceptional charges4
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Financial PerformanceSystem Sales
0
20
40
60
80
100
120
140
160
180
200
2000 2001 2002 2003 2004
+20%+29%
+21%
+20%
+23%
COMPOUND ANNUAL GROWTH IN SALES OF 23%
£m
76.1
98.4
118.9
142.3
174.3
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Financial PerformanceStore Openings
0
10
20
30
40
50
60
2000 2001 2002 2003 2004
22(2)*
24(0)*
34(2)*
50(1)*
40(1)*
Openings
* Negative = Store closures
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Financial PerformanceStore Count
0
50
100
150
200
250
300
350
2000 2001 2002 2003 2004
215 237
269
318 357
Num
ber of stores
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Financial PerformanceMature Store Sales
Period1
Period2
Period3
Period4
Period5
Period6
Period7
Period8
Period9
Period10
Period11
Period12
2000 2001 2002 2003 2004
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Financial PerformanceLike-for-like Sales Growth
0
5
10
15
20
25
2000 2001 2002 2003 2004
0
50
100
150
200
250
300
4.8%
21.4%
11.2%7.4% 6.6%
LFL store population
% G
row
th
LFL
stor
e po
pula
tion
Solid growth from a largergroup of stores
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Financial PerformanceBalance Sheet
At 2 Jan 2005 At 28 Dec 2003£’000 £’000
Fixed assets 16,498 14,062
Current assets 20,980 17,797
Creditors due within (15,121) (13,380)one year
Net current assets 5,859 4,417
Creditors due after (8,102) (7,119) more than one year
Deferred tax (857) (630)
NET ASSETS 13,398 10,730
Fixed Assets:At 02 Jan 05 At 28 Dec 03
£’000 £’000
Intangible 1,520 1,430Tangible 14,595 12,293Investment 383 339
in JV’s16,498 14,062
Current Assets:
Stock 2,700 1,843Debtors 13,456 12,233Cash 4,824 3,721
20,980 17,797
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Financial PerformanceAnalysis of Shareholder Funds
At At2 Jan 2005 28 Dec 2003
£’000 £’000
At beginning of year 10,680 11,701Share issues 1,071 1,009Share buyback (1,610) 0 EBT shares (1,200) (5,160)Profit for year 6,731 4,559LTIP charge 332 328Dividends (2,688) (1,757)
13,316 10,680 Minorities 82 50
13,398 10,730
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Financial PerformanceAnalysis of Borrowings
At At2 Jan 2005 28 Dec 2003
£’000 £’000Cash at bank 4,824 3,721
DP Capital (2,640) (2,739)
EBT loans (6,360) (5,160)
Other (42) (65)
Net debt (4,218) (4,243)
Shareholders funds 13,398 10,730
Gearing % 31.5% 40.9%
Interest cover 33.7 times 29.3 times12
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Financial PerformanceNet Cash Inflow From Operating Activities
53 weeks ended 52 weeks ended2 Jan 2005 28 Dec 2003
£’000 £’000
Operating profit 9,033 5,866Depreciation 1,386 1,210Amortisation 133 180LTIP charge 333 328Increase in stocks (857) (433)Increase in debtors (1,505) (707)Increase in creditors 1,420 1,566
9,943 8,010
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Financial PerformanceCash Flow Statement
53 weeks ended 52 weeks ended2 Jan 2005 28 Dec 2003
£’000 £’000
Net cash inflow from operating activities 9,943 8,010Servicing of finance + returns on investment (215) (110)Taxation paid (2,021) (1,407)Capital expenditure + financial investment (3,428) 1,037Acquisitions (280) 30Dividends paid (2,235) (1,297)Net cash inflow before financing 1,764 6,263Financing (661) (6,427)INCREASE/(DECREASE) IN CASH 1,103 (164)
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Domino’s Pizza UK & Irl plcBasic Earnings Per Share Growth
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2000 2001 2002 2003 2004
Basic EPS Linear (Basic EPS)
2.614.00
5.60
9.02
13.23
Penc
e
Compound Annual Growth of 50%
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Domino’s Pizza UK & Irl plcDividends Per Share Growth
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0.00
1.00
2.00
3.00
4.00
5.00
6.00
2000 2001 2002 2003 2004
Dividends per Share Linear (Dividends per Share)
Penc
e
0.801.33
2.00
3.50
5.25
Compound Annual Growth of 60%
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Domino’s Pizza UK & Irl plc
The Market *• Home delivery food market in UK estimated at £1.2 billion
• Growth of 62% from 1999-2004• Pizza currently 43% of market• Domino’s deliver 1 in 10 home delivered meals
• Time poor consumers• Technological advances facilitate ease of ordering
• Market highly fragmented• Over 4,000 pizza delivery companies in UK
• Domino’s market leader in terms of: • Stores• Sales• Brand awareness• Technology
17* Mintel Report October 2004
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Domino’s Pizza UK & Irl plc
Key Growth Drivers
• Significant increase in at-home eating predicted
• Greater in-home entertainment options - homes are leisure destinations in their own right
• Wider access to interactive technologies - advantageous for home-delivered food companies
• Increased development of residential property - new customers, more delivery areas
• Continued time pressure - consumers seeking convenience
• Ageing population sees pizza customers maturing with the market
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Domino’s Pizza UK & Irl plc
The Competition
• Strengthened market leadership
2004Stores Openings Sales
- Domino’s 357 40 £174m- Pizza Hut * 202 32 £ 95m- Perfect Pizza * 120 (20) £ 24m - Papa Johns * 80 7 £ 20m
• Highest sales per store in industry
* Estimates
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Domino’s Pizza UK & Irl plc
Building the Brand• FOUR KEY INITIATIVES:
• TV• Simpsons on Sky One• Celebrity-led advertising campaign success
• Leslie Nielsen
• Direct marketing• Driving frequency and promotions
• New pizza menu development• Double Decadence• Delight cheese
• Technological advances• Web based ordering and interactive services on Digital TV• One number solution – 08712 12 12 12• Mobile connections and SMS ordering
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Domino’s Pizza UK & Irl plc
Double Decadence – The Product
Customer’s choice of Domino’s Pizza topping
Domino’s “Thin & Crispy” dough base
Indulgent, creamy cheese and herb sauce
Domino’s “Thin & Crispy” dough base
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Domino’s Pizza UK & Irl plc
E-Commerce Growth
• Sales of £8.3m in 2004• Growth of 41% over 2003• 5.2% of total system sales
• Record sales of £1.2m in last 6 weeks of year• Growth of 62% over 2003• 5.9% of total system sales
• Over 7% of all UK delivery sales
• New Sky interactive platform launched• February 2005
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Domino’s Pizza UK & Irl plc
Management Team and Board
• Strengthening of Board• Appointment of Lee Ginsberg as Finance Director• John Hodson, Non-Executive Director
• Board now comprises:• Chairman• Three Executive Directors• Three Non-Executive Directors
• Management Team Focus• Operations Director (ex-FD)• Store openings and franchise development
STRONGER TEAM IN PLACE TO SUPPORT GROWTH
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Domino’s Pizza UK & Irl plc
Continuing Strategy• Maintain robust new store openings
• Target of 50 per annum
• Drive like-for-like sales growth• New menu development• Continuation of superior standards and service
• Drive operational leverage• Infrastructure in place• Control costs
• Maintain cash generation
• Return cash to shareholders
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Domino’s Pizza UK & Irl plc
Trading & Prospects
• Store openings on track
• Like-for-like sales up 6.6% (2003: 4.3%) for the first six weeks of 2005
• Overheads and cash flow under control
LOOKING FORWARD TO 2005 WITH CONFIDENCE
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