E-commerce drives growth at Domino's Pizza

A hunger for pizza, tied with an attachment to smartphones drove growth at Domino's Pizza Group in 2015, with the company seeing more and more sales from e-commerce.

The FTSE 250 fast food firm saw system sales for continuing operations improve 15.8% to £877.2m, from £757.8m.

Underlying operating profit from continuing operations was up 16.6% to £73.2m, with underlying basic earnings per share up 19.4% to 35.7p.

At year-end, Domino's Pizza had a net cash balance of £40.4m, up £29.4m. The board recommended a final dividend of 11.75p, up from 9.69p, making for a total dividend per share of 20.75p, an 18.6% improvement.

On a statutory basis, revenue from continuing operations was up 9.7% to £316.8m, and profit after tax was up 20% to £59.3m.

"2015 was a terrific year for Domino's Pizza Group; the UK performance was outstanding, reflecting continued investment in our e-commerce platform," said chief executive officer David Wild.

"This underpins both our like-for-like results and the success of our new store programme," he added.

Wild said digital technology continued to be at the heart of the business, driving more customers and higher frequency of orders.

The company's cash conversion remained strong, with Wild confirming Domino's was ready to resume share buy backs alongside the dividend increase of 18.6%.

"We have made an encouraging start to 2016, although we are conscious of increasingly tough comparatives through the rest of the year," he said.

The firm's digital investment saw system sales made via e-commerce improve more than 30% during the year, with app-based sales now the largest distribution channel, driving almost half of all online sales.

In the UK alone, e-commerce sales now represented 77.7% of all delivered sales.

The group's store opening programme in the UK saw 61 new outlets opened during the year, up from 40 in 2014, with new store average weekly unit sales 15% ahead of the prior period.

Its franchisees were looking more profitable as well, with store EBITDA performance up to 15.5% from 13.6%, driven by lower food prices.

The company's international businesses were also improving, with the economic recovery and operational improvements being seen in the Republic of Ireland, and a strategic joint venture in Germany acquiring the largest pizza delivery chain in the market.

There was also continues progress being made in Switzerland.

Domino's Pizza Group reported strong cash flow of £29.4m and cash conversion in excess of 100%, with net cash of £40.4m.

Looking at 2016, Domino's said the momentum was continuing despite increasingly tough comparatives.