Domino's (ASX: DMP) has set itself a new benchmark after reporting a record profit of $136 million in FY18, bolstered by rapid expansion and growth across markets in Australia and overseas for the Brisbane-headquartered pizza purveyor.
The result represents a 15 per cent lift on the group's NPAT in FY2017.
The company added almost six new stores a week during FY18, with 145 new stores built and 163 stores acquired from other brands. This pushed total sales up 11.7 per cent to $2.59 billion.
Sales growth was highest in Europe (up 5.7 per cent), with sales in Australia growing by 4.5 per cent and 0.9 per cent in Japan.
CEO and managing director Don Meij says the company has set itself a new benchmark.
"Less than four years ago we surpassed $1 billion in sales, and this year Group Network Sales reached $2.59 billion this continues to be a fast growth business," says Meij.
"We delivered positive growth in all markets but after consecutive years of significant and compounding growth, our bar for success is even higher."
Undeterred by new players in the online food delivery game Domino's continued to grow its online sales by 19.4 per cent, representing 63.9 per cent of total group sales. At one point, the company sold 2 million pizzas and sides in Australia in one week online.
Changes to staff payments looked like they might hit Domino's hard, but Meij says the transition to the new Award did not hurt the company.
"One of the significant achievements this year was the transition of our Australian employees to the Modern Fast Food Industry Award. Even with some uncertainty prior to moving to the Award, that affected store performance and operations, our franchisees profitability is in line with the previous year," says Meij.
"We are proud of our franchisees having implemented this significant change, which means our team members are paid rates among the highest in our industry, including penalty rates and mileage allowances, which they deserve."
Meij says the company is on the path to becoming a dominating force globally in the fast food sector.
"Globally, we believe ongoing growth over the longer term is achievable and expect to grow our business, and our share of the pizza and fast food markets, with compounding growth in the range of 3-6 per cent higher than our competitors," says Meij.
"We believe this is achievable given the growth we've already achieved in the Europe market already 230 per cent in the past three years alone."
In Europe, the group's operations with Hallo Pizza continue to progress well. 130 Hallo Pizza stores have committed to convert to Domino's, with 19 stores having already converted.
In the first six weeks of FY19, 12 new Domino's stores have been opened. Same store sales are already up 4.4 per cent in Australia.
The company has declared a dividend of 49.7 cents per share (75 per cent franked), providing shareholders a full year dividend of 107.8 cents per share.
Shares in Domino's are down 12.45 per cent to $45.90 per share at 10.19am AEST.
Business News Australia
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