(Alliance News) - Domino's Pizza Group PLC on Tuesday said it is confident going forward as lower expenses helped pretax profit in 2020.
The earnings report came after Domino's on Monday said it had agreed to sell its business in Sweden, PPS Foods AB, to a company controlled by Birgir Bieltvedt, the indirect owner of another Domino's franchiser, DP Norway. Domino's Pizza will pay the buyer EUR2 million in cash to take the loss-making business off its hands.
Domino's Pizza said system sales in the 52 weeks ending December 27 were GBP1.35 billion, up from GBP1.21 billion the year before. Like-for-like system sales growth was 10%.
The company reported strong UK & Ireland performance, and said free cash flow increased by 73% to GBP99.0 million.
Domino's Pizza pretax profit was GBP98.9 million, up from GBP75.1 million the year before, despite revenue slipping to GBP505.1 million from GBP508.3 million. The company said profit was helped by reduction in 'other expenses' to GBP4.6 million from GBP20.8 million year-on-year.
In addition, the company said the share of post-tax profits of associates and joint ventures jumped to GBP9.0 million from GBP2.1 million year-on-year.
Domino's Pizza declared a total dividend of 9.1 pence per share, up from 5.56p paid for financial 2019.
Going forward, the company said trading in the current financial year has started strongly with exceptional trading over the new year period as the company recorded its highest ever sales week. Domino's Pizza delivery business also continues to perform "very well", it noted.
"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," said Chief Executive Dominic Paul.
Domino's Pizza shares were trading 12% higher in London on Tuesday at 346.47p each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Dominos (DOM)