Domino's sets sights on £2bn in sales after solid 2023

(Sharecast News) - Domino's Pizza Group, the UK-based master franchise of the global takeaway chain, reported increased profit, cashflow and shareholder returns in 2023 on the back of solid organic growth, as it announced plans to open new stores and hit £2.0bn in sales within four years. System sales, which refer to both franchised and corporate store sales, totalled £1.54bn in the 12 months to 24 December, up 5.8% on 2022, with like-for-like systems sales rising 5.7%. However, organic growth slowed to just 0.4% in the fourth quarter, held back by a tough comparator the year before when like-for-like systems sales jumped 13.9%.

Group revenues, meanwhile, increased 11.1% to £667m, helped by the opening of 61 new stores.

The company, which holds a 7.2% share of the UK takeaway market, now has 1,319 stores across the UK and Ireland, but said it expects that number to grow by 70 in 2024, rising to 1,600 by 2028 and 2,000 by 2033. System sales are tipped to rise to £2.0bn in 2028 and £2.5% by 2033.

Statutory pre-tax profit was up 41% at £115m, which was largely due to proceeds from the disposal of its German associate, while underlying pre-tax profit was unchanged at £99m.

Free cash flow increased 22.8% year-on-year to £97, while the final dividend was proposed at 7.2p, lifting the total dividend by 5% to 10.5p.

The company also revealed its was acquiring full control of Shorecal, the largest Domino's franchise business in the Republic of Ireland and Northern Ireland for €72m.

"We are rigorously focused on accelerating organic growth and pursuing value enhancing inorganic growth opportunities, to build a larger and more cash generative business, at pace but with discipline," said chief executive Andrew Rennie. "We look forward to providing an update on these opportunities later in the year."