Thu 26th Feb 2015 - Domino’s UK – LfLs up 11.3%, Germany in growth Domino’s UK – LfLs up 11.3%, Germany in growth: Domino’s Pizza has reported sales rose 14.6% to £766.6m for the 52 weeks ended 28 December 2014. Like-for-like sales growth was 11.3% at its 724 UK mature stores (2013: 7.0% in 670 mature stores). Underlying profit before tax for UK & ROI increased by 14.3% to £63.1m (2013: £55.2m). 44 new stores opened in the period (2013: 57 stores) with eight closures (2013: four) resulting in a total of 894 stores in four countries as at 28 December 2014. UK & ROI online system sales increased by 30.2% to £440.0m (2013: £338.0m) with online sales accounting for 69.4% of UK & ROI delivered sales (2013: 61.5%). Of this, 44.2% of online orders were taken through a mobile device (2013: 30.9%). UK like-for-likes in the first eight weeks of 2015 are running at 9.5%, 4.8% in Ireland, 0.1% in Germany and 7.7% in Switzerland. Chief executive David Wild, said: “It has been another strong year for Domino’s, particularly in our core UK market, confirming the strength of our customer offer. Both UK like-for-like sales and new store performance were excellent and this has largely been driven by our sector-leading e-commerce initiatives. Our renewed focus on franchisee profitability has also provided an impetus to continued growth. Outside the UK, we are pleased with progress in Ireland and Switzerland, both of which showed improvement. In Germany, there remains much work to do, but underlying losses have reduced, in the second half and we remain optimistic about the opportunity in this market. These results are a tribute to the entire Domino’s team, including the franchisees and their colleagues, who work in the stores and served our customers with more than 75 million pizzas during 2014. I would like to thank them for their amazing efforts. We look forward with continued optimism. We have a great brand and a strong plan; the year has started promisingly, but there are tough comparators to beat, so we will not get complacent and will continue to ensure Domino’s remains the Number One pizza brand in the UK.” Numis Securities leisure analyst Douglas Jack said: “Underlying PBT rose 15% to £54.8m (versus £54.2m; consensus £54.3m), with UK like-for-like sales up 11.3% (volume 10.4%; price 0.9%), and franchise profitability up 26%. Given this, record sales from new sites and UK like-for-like sales being up 9.5% (versus 13.8% comp) over the last eight weeks, we expect the pace of expansion to accelerate by 32% in 2015E. Reflecting strong growth prospects and the P/E being in line with the historic average, we are moving our recommendation to Buy from Add. Our 2015E forecast of 16% earnings growth assumes just 3% like-for-like sales growth and falling gross margins for the UK. We believe there is upgrade risk to forecasts, which, after a £24.5m cash inflow in 2014 (resulting in a £11m net cash position at year-end), could be enhanced by additional share buy backs.”