Domino’s Pizza · 2014-02-14 · Analysis of Shareholder Funds At At 2 Jan 2005 28 Dec 2003 £’000 £’000 At beginning of year 10,680 11,701 Share issues 1,071 1,009 Share buyback

Domino’s Pizza UK & IRL plcPreliminary Results for the 53 weeks ended 2 January 2005

Domino’s Pizza UK & Irl plc

Stephen Hemsley, Chief Executive

Lee Ginsberg, Finance Director

1


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)

2


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)

3

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

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

5

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

6

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

7

Financial PerformanceMature Store Sales

Period1

Period2

Period3

Period4

Period5

Period6

Period7

Period8

Period9

Period10

Period11

Period12

2000 2001 2002 2003 2004

8

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

9

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

10

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

11

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

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

13

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%

15

Domino’s Pizza UK & Irl plcDividends Per Share Growth

17

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%


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


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

18


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

19


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

20


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

22


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

23


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

24


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

25


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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Documents

Domino’s Pizza · 2014-02-14 · Analysis of Shareholder Funds At At 2 Jan 2005 28 Dec 2003 £’000 £’000 At beginning of year 10,680 11,701 Share issues 1,071 1,009 Share buyback