Domino’s – 2025 has started positively in an uncertain market, Q4 lfl sales up 3%: Domino’s Pizza Group has reported that 2025 has started “positively in an uncertain market”, after it saw like-for-like system sales increase 0.7% in 2024, with improving performance in every quarter. The company said that for the year to 29 December 2024, system sales were up 2% to £1,571.5m, while FY24 like-for-like sales, excluding splits and VAT, were up 0.7%, improving every quarter in the year, including up 3% in Q4. It said that delivery orders returned to growth in FY24 and were up 2.4% with collection orders up 0.5%. Underlying Ebitda was £143.4m, up 6.4% on a 52-week basis with lower supply chain Ebitda, due to the pass-through of lower food costs to its franchise partners, substantially offset by the contribution from Shorecal (Irish business acquired last year) and lower technology platform costs. Underlying pre-tax profit was £107.3m, up 8.4% on a 52-week basis as lower depreciation was largely offset by increased finance costs. In December 2024, the business reached a new five-year Profitability and Growth Framework (PGF) with its franchise partners to capitalise on the significant long-term growth opportunity. At the same time, it purchased an additional 24% for £25.6m in Victa DP Ltd (£7.2m equity, £18.4m debt funding), its joint venture in Northern Ireland, bringing its shareholding to 70%. The company said: “This framework underpins our confidence in our targets of in excess of 1,600 stores delivering £2.0bn of systems sales by 2028 and 2,000 stores delivering £2.5bn of system sales by 2033 driving profit growth across the system. The PGF aligns DPG and franchise partners through shared investment and creates a framework of incentives to drive meaningful new store openings. We made strong strategic progress during 2024, with trading momentum accelerating as the year progressed. Although the UK economic environment remains uncertain, in the first ten weeks of the year, our growth has been positive with total system sales +2.4%, total orders +0.7% and like-for-like sales +0.7%. 2024 was the year when we returned delivery to growth, and in the current environment we see an opportunity to drive further growth in collection orders in 2025 through value-based marketing campaigns. Our brand and market positioning continues to strengthen and we have a number of initiatives, from the next phase of our loyalty trial to exciting menu innovation, which will improve our customer proposition and drive growth in the system. With the PGF in place, we look forward to opening in excess of 50 new stores in 2025. We expect FY25 Underlying Ebitda to be in line with current market expectations, excluding the positive impact of the Victa investment announced today.” It said that despite inflationary pressures, particularly in labour costs from the 10% minimum wage increase in April 2024, franchise partners further increased their profitability in FY24. Average UK store Ebitda (unaudited) in FY24 grew 6.6% to £168k (FY23: £158k), generating a 14% Ebitda margin (FY23: 13%). The business also said it continues to explore “target, accretive opportunities for a second brand, where we can leverage the scale and capabilities of the group and deliver attractive returns to shareholders”. It said: “We are focusing on opportunities which are in line with our guardrails and which would be financed within our existing balance sheet capacity. Our current pipeline is of a size that could be financed from existing facilities enabling us to remain within our target leverage range.” At the start of FY24, the company undertook a detailed review of the growth potential in the UK and Ireland and identified opportunities across new territories as well as splitting existing geographies. It said: “More importantly, our franchise partners are hungry for growth and have exceptional second-generation talent who want to grow their businesses. There is a significant opportunity to build our scale further and we have targets to have in excess of 1,600 stores by 2028 and 2,000 stores by 2033 in the UK and Ireland.” Andrew Rennie, chief executive, said: “Today’s results show the benefits of our long-term strategy. We’ve capitalised on our competitive strengths, agreed a new five-year framework with our franchise partners and opened 54 stores. Our trading momentum accelerated as the year progressed, our delivery channel returned to growth and we delivered strong underlying earnings growth. This has required relentless focus by our colleagues and franchise partners, and I thank them for their brilliant work. In 2024 we made disciplined investments in new growth opportunities, Shorecal in Ireland and DP Poland, partly financed through recycling store disposal proceeds. Today we have announced an additional investment in our Northern Irish JV, further enhancing our ability to drive growth. We continue to explore targeted, accretive opportunities, which would be financed within our existing balance sheet capacity. Since 2021 we have announced nearly £500m of shareholder returns, have increased dividends again today and remain committed to returning excess capital in the future. 2025 has started positively in an uncertain market. With a good store opening pipeline, I am confident that with the quality of our teams and franchise partners, our unrivalled scale, resilient business model and capabilities, Domino’s is well placed to thrive in 2025 and beyond.”