The shares of Domino’s Pizza (LSE: DOM) climbed 2% to 515p in early London trade this morning after the restaurant group announced full-year profits in line with analyst expectations.
Annual system sales, which describe the total sales made by Domino’s franchisees, climbed over 12% in the UK to reach to £608m. On a like for like basis, Domino’s like-for-like UK store sales grew 7% in 2013.
Online deliveries continue to be a big winner for Domino’s, now representing 65% of delivered UK sales, of which 31% came from mobile ordering in 2013. Internationally however, while revenues grew impressively, Domino’s losses worsened from the later-than-expected transition of some stores into franchisee hands.
Domino’s chief executive Lance Batchelor, who recently announced he would resign from his position, commented on the results:
“The Company will deliver full year 2013 profits ahead of market expectations for the UK and Ireland, but losses in Germany will be higher than expected primarily due to the later than expected transition of the corporate stores into franchisee hands. Consequently, full year results for the Group are expected to be in line with market consensus.”
Non-executive Chairman Stephen Hemsley capped off the update by announcing that an executive search firm has been appointed to find Mr Batchelor’s replacement.
With a market cap of £850m, Domino’s is valued at 19 times its forward earnings, and offers a prospective dividend yield of 3.4%.
