Domino's Pizza has released its results for Ireland and the UK for the 52 week period that ended on December 27, 2020, revealing that its system sales across the two regions increased by 11.4% during the period to almost £1.35 billion, while its like-for-like system sales, excluding splits, increased by 10.3%, and by 9.3% including splits.
The company's underlying profit before tax increased by £2.4 million in 2020 across Ireland and the UK to £101.2 million, with COVID-19 costs of £9 million being incurred to support franchisees to trade safely.
Statutory profit after tax increased to £39.7 million from £2.8 million, with non-underlying charges reducing to £2.1 million from £21.8 million and loss on discontinued international operations reducing to £42.5 million from £56.5 million, including £22.6 million (2019: £35.2 million) of impairments of international operations.
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The company's free cash flow increased by 73% across Ireland and the UK last year to £99 million.
Disciplined cash management led to net debt reducing by 26% to £171.8 million, driven by trading performance and actions taken to preserve headroom.
Domino's stated that a £45 million share buyback programme, effective imminently, is in line with its new capital allocation philosophy and commitment to distribute surplus capital to shareholders.
Additionally, the company recorded a total dividend for FY20 of 9.1p per share, which has been proposed as a final dividend to be paid on May 4, 2021.
Domino's said that its transformed board and executive leadership teams have focussed on leading the business through the challenges resulting from COVID-19, and that its business remained open throughout the year with strong growth in delivery offsetting a significant COVID-19 impact on its collection business.
The company noted that a digital transformation of its business accelerated through the year, with UK online sales increasing 23.9% and app sales increasing 26.2%, and that online sales now account for 94.3% of its delivery sales in the UK.
Domino's also noted that it maintained a constructive engagement with its franchisees, and that the disposal of discontinued international operations is progressing, with a Norway disposal being completed in May of 2020, a contract having been exchanged on the disposal of Sweden, with completion expected in May of 2021, and Iceland and Switzerland disposal processes ongoing.
Current Trading And Outlook
Addressing its current trading and outlook, Domino's stated, "Trading in the current financial year has started strongly with exceptional trading over the new year period as we recorded our highest ever sales week. Our delivery business continues to perform very well, and collection remains at around 60% of 2019 levels.
"We have demonstrated we have a flexible and robust business model that has been able to adapt to the uncertain and changing market conditions throughout 2020. The current trends and demand expectations, in addition to the investment in capabilities we have and are making, gives us confidence in delivering further operational and financial progress in the coming year."
Domino's Pizza Group CEO Dominic Paul stated, "I am pleased with the performance we've delivered this year, and grateful to everyone across the system for their commitment during this extraordinary period. We've worked successfully in partnership with our franchisees to continue to operate safely through the various lockdowns and play our part in feeding the nation during the pandemic, while supporting our colleagues and key workers. We have continued to invest and innovate across the business, launching exciting new products such as our vegan pizza and investing in technology, with our new app, in the supply chain and in marketing to further strengthen the brand.
"At the same time, we have been looking to the future, and today we are announcing a multi-year strategic plan which will drive growth across the business and deliver an exciting and profitable future for both our shareholders and our franchisees. In my first year with Domino's, it has been clear to me that we have a great platform to build from - a uniquely powerful brand, high digital participation and outstanding people and franchisees. Our new strategy will enable us to build upon our strengths in both delivery and collection and provide our customers even better quality and value, which will drive continued strong performance. We have maintained an open dialogue with our franchisees throughout the development of this plan and, while we do not have an agreement yet, we have made an attractive offer to them which we believe will deliver powerful benefits to both them and the group.
"As the economy begins to reopen, we have invested in our capabilities to enable us to capitalise on the substantial opportunities ahead. I am confident that we can achieve our vision of being the UK and Ireland's favourite food delivery and collection brand, and deliver great results for our colleagues, our customers, our shareholders and our franchisees."
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