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Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006.

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Presentation on theme: "Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006."— Presentation transcript:

1 Domino’s Pizza UK & IRL plc Preliminary Results for the 52 weeks ended 1 January 2006

2 Domino’s Pizza UK & IRL plc The Team Stephen Hemsley, Chief Executive Chris Moore, Chief Operating Officer Lee Ginsberg, Finance Director 2

3 Domino’s Pizza UK & IRL plc Financial Highlights System sales up by 15.1% to £200.7m (2004: £174.3m*) Profit before tax increased by 26.6% to £11.2m (2004: £8.8m) Earnings per share: - Basic EPS up 22.8% to 16.25 pence (2004: 13.23 pence) - Diluted EPS up 22.1% to 15.47 pence (2004: 12.67 pence) Total dividend up 38.1% to 7.25 pence for the year (2004: 5.25 pence) 50 new delivery stores opened (2004: 40) * NOTE: 53 week period in 2004 3

4 Domino’s Pizza UK & IRL plc Financial Highlights contd. Like-for-like sales in 317 mature stores up 7.1% (2004: 6.6%) 407 stores at the end of the period (2004: 357 stores) E-Commerce sales up 69.5% to £13.9m (2004: £8.2m), representing 10.4% of UK delivered pizza sales Strong cash generation with cash at hand of £5.9m (2004: £4.8m) £8.2m cash returned to shareholders from share buybacks during the year (2004: £1.6m) 4

5 Domino’s Pizza UK & IRL plc System sales +29% +21% +20% +23% +15% +17% on comparable 52 weeks £m £98.4m £118.9m £142.3m £174.3m £200.7m 5 (53 weeks)

6 Domino’s Pizza UK & IRL plc Like-for-like sales growth 4.8% 21.4% 11.2% 7.4%6.6% LFL store population % Growth LFL store population Solid growth from a larger group of stores 6 7.1% Average mature store now takes £180,000 p.a. more than in 2000

7 Domino’s Pizza UK & IRL plc Store count 237 269 318 357 407 number of stores at year end 7 Potential for 800 – 1,000 stores 34 50 24 50 40

8 Domino’s Pizza UK & IRL plc Profit and Loss 2005 2004 % £’000 £’000Increase System sales 200,678 174,292 15.1 Operating profit * 11,004 9,138 20.4 Profit/(loss) on sale of stores 876 (47) - Accelerated LTIP charge (626) - -____ Profit before interest and tax 11,254 9,091 23.8 Net interest payable (85) (270) -____ Profit before tax 11,169 8,821 26.6 Taxation (2,922) (2,058) (42.0) Profit after tax 8,247 6,763 21.9 Dividends- pence 7.25p 5.25p 38.1 - cover 2.2 x 2.5 x - Earnings per share - basic 16.25p 13.23p 22.8 - diluted 15.47p 12.67p 22.1 * Before exceptionals 8

9 Domino’s Pizza UK & IRL plc Balance Sheet 2005 2004 £’000 £’000 (Restated) Fixed assets 15,370 16,498 Current assets 20,992 20,980 Creditors due within (13,742) (13,590) one year Net current assets 7,250 7,390 Creditors due after (9,085) (8,102) more than one year Deferred tax and provisions (1,447) (857) NET ASSETS 12,088 14,929 Fixed Assets: At 01 Jan 06At 02 Jan 05 £’000 £’000  Intangible 1,326 1,520  Tangible 13,593 14,595  Investment 451 383 in JV’s 15,370 16,498 Current Assets:  Stock 2,186 2,700  Debtors12,921 13,456  Cash 5,885 4,824 20,992 20,980 9

10 Domino’s Pizza UK & IRL plc Analysis of Shareholder Funds 2005 2004 £’000 £’000 (Restated) At beginning of year 14,847 11,763 Share issues in year 472 1,071 Share buyback in year (8,222) (1,610) Increase in EBT shares (1,140) (1,200) Attributable profit for year 8,255 6,731 LTIP charge (Including 06/07 acceleration) 963 332 Dividends (3,169) (2,240) 12,006 14,847 Minorities 82 82 12,088 14,929 10

11 Domino’s Pizza UK & IRL plc Analysis of Borrowings 2005 2004 £’000 £’000 Cash at bank 5,885 4,824 DP Capital (2,500) (2,640) EBT loans (7,500) (6,360) Other (26) (42) Net debt (4,141) (4,218) Shareholders funds 12,006 14,847 Gearing % 34.5% 28.4% Interest cover 122 times33.7 times 11

12 Domino’s Pizza UK & IRL plc Net Cash Inflow From Operating Activities 2005 2004 £’000 £’000 Operating profit 10,214 * 9,033 Depreciation 1,508 1,386 Amortisation 131 133 LTIP charge 963 333 Decrease/(increase) in stocks 489 (857) Decrease/(increase) in debtors 337 (1,505) (Decrease)/increase in creditors (968) 1,420 12,674 9,943 * After £626k LTIP acceleration 12

13 Domino’s Pizza UK & IRL plc Cash Flow Statement 2005 2004 £’000 £’000 Net cash inflow from operating activities 12,674 9,943 Servicing of finance + returns on investment (38) (215) Taxation paid (1,549) (2,021) Capital expenditure + financial investment (1,999) (3,428) Disposals/acquisitions 3,048 (280) Dividends paid (3,169) (2,235) Net cash inflow before financing 8,967 1,764 Financing (7,906) (661) INCREASE IN CASH 1,061 1,103 13

14 Domino’s Pizza UK & IRL plc Cash returned to shareholders 2 year £’000 2005 2004Total PBT11,169 8,82119,990 Share Buybacks 8,222 1,610 9,832 Dividends 3,169 2,240 5,409 11,391 3,850 15,241 Cash at year end 5,885 4,824 - 14

15 Domino’s Pizza UK & IRL plc Basic Earnings Per Share Growth 15 4.00 5.60 9.02 13.23 16.25 Pence Compound increase of 42%

16 Domino’s Pizza UK & IRL plc Dividends Per Share Growth 16 Pence 1.33 2.00 3.50 5.25 Compound increase of 53% 7.25

17 Domino’s Pizza UK & IRL plc The future for pizza delivery 17 Convenience & Takeaway Market £7.2 billion Convenience & Takeaway Market £12.3 billion 20052015 Predicted growth in total convenience & takeaway market: 70% Predicted growth in pizza delivery market: 91% Source: Convenience Food Sector 2015 – Future Foundation * Excludes carry-out sales pizza delivery* £578 million pizza delivery £1.1 billion

18 Domino’s Pizza UK & IRL plc Right place, right time, right brand Cash-rich, time-poor society  Ideal environment for the convenience of pizza delivery  70% of families feel time pressured...  …..ordering 25% more takeaway meals Homes are fast becoming leisure destinations  Our Point-of-Sale  In-home leisure spend £63b (from £39b in 1999)  Growth outstripping out-of-home leisure spend  Mostly on new technologies (and new sales channels; PC, iTV, convergence) Source; Future Foundation, Convenience Food 2015 18

19 Domino’s Pizza UK & IRL plc Right place, right time, right brand Increased informality in eating habits  50% of meals eaten in front of the TV  Average time spent preparing food now only 13 minutes per day  But customers are looking for choice, novelty and fresh ingredients Demographic shift in our favour  Pizza no longer stops at 55  At least once a month, 33% of over 55s ordered takeaways in 2003 (vs. 24% in 2000)  Growth in single person households; high PDI and spend on socialising Source; Future Foundation, Convenience Food 2015 19

20 Domino’s Pizza UK & IRL plc Right place, right time, right brand Focus on the detail; delivering a great pizza in under 30 minutes  the core challenge; a third of the business comes in just 8 hours of the week  11+million deliveries, 90% on time  More product training & field support  In-store speed and product quality are key areas of focus for stores going forward (2000+ audits in 2006) Increased support behind new product strategy  4% National Ad Fund  Strong campaign formula boosts overall sales  TV, Direct Mail, LSM, PR  E-commerce capitalising on growth in broadband (38% of UK adults have bought online in last six months)  Expected to grow to 68% by 2015  Greater potential for ‘lock-in’ Source; Future Foundation, Convenience Food 2015 20

21 Domino’s Pizza UK & IRL plc Right place, right time, right brand  e-commerce net sales of £13.9 million, 69.5% up on 2004  10.4% of UK delivery sales in 2005  Future Foundation; 35% of pizza delivery sales by 2015 21 New website launch July 04 20052004

22 Domino’s Pizza UK & IRL plc The competition Strengthened our lead in pizza delivery segment 2005 Stores Openings Sales - Domino’s 40750 £200m - Pizza Hut Delivery* 23230 £110m - Perfect Pizza * 112 (7) £ 23m - Papa Johns * 80 7 £ 17m - Others *2,000n/a £340m Highest sales per store in industry * estimates 22

23 23 Coverage of approx. 47% of UK & IRL households Source; Mintel Home Delivery Report, 2004 Domino’s Pizza UK & IRL plc The size of the opportunity

24 24 Coverage of approx. 47% of UK & IRL households Source; Mintel Home Delivery Report, 2004 Source: Ipsos-UK US market study, Feb 2006 U.S.market

25 Domino’s Pizza UK & IRL plc Sales performance 2005 Average Mature Store Sales Per Period 25

26  New Simpsons licensing deal  Introducing the “Ay Carumba Fajita Pizza” (TV ad)(TV ad) 26 Domino’s Pizza UK & IRL plc The year ahead

27 27 Domino’s Pizza UK & IRL plc The year ahead  ‘Football Fanatics’ and the World Cup  More investment in e-commerce channel  new customer acquisition drive  WAP ordering launch in Q2  Second Simpsons menu addition in H2  Tough comparables in Q4

28 Domino’s Pizza UK & IRL plc Board Management Team Strengthening of Board Appointment of Michael Shallow, Non-Executive Director Appointment of Dianne Thompson, Non-Executive Director Board now comprises: Chairman Colin Halpern Three Executive Directors Four Non-Executive Directors Nigel Wray Michael Shallow Dianne Thompson John Hodson Management Focus Appointment of Operations Director Appointment of IT Director STRONGER TEAM IN PLACE TO SUPPORT GROWTH 28

29 Domino’s Pizza UK & IRL plc Continuing strategy Focus on roll out of Domino’s system in UK and Ireland Maintain consistent new store opening programme Build infrastructure for 1000 stores Drive like-for-like sales growth Manage number of franchisees Operational leverage to drive net margin Resulting cash generated to be returned to shareholders 29

30 Domino’s Pizza UK & IRL plc Current trading & prospects Store openings on track for our target of 50 stores Like-for-like sales up 10.3% (2004: 6.6%) for the first six weeks of 2006 E-commerce up 59.5% (2004: 49%) now 11.8% of delivered pizza sales in UK. Strong cash generation set to continue 30 Well placed for another year of strong growth


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