Domino s Pizza UK & IRL plc Interim Results for the 26 weeks ended 2 July _interim_results

Transcription

1 Interim Results for the 26 weeks ended 2 July 2006

2 The Team Stephen Hemsley, Chief Executive Chris Moore, Chief Operating Officer Lee Ginsberg, Finance Director 2

3 Financial Highlights System sales up 18.3% to 114.8m (2005: 97.1m) Profit before tax* increased by 24.5% to 6.3m (2005: 5.0m) Earnings per share*: - Basic EPS up 31.2% to 9.18 pence (2005: 7.00 pence) - Diluted EPS up 27.7% to 8.77 pence (2005: 6.87 pence) Interim dividend up 33.9% to 4.15 pence (2005: 3.10 pence) 21 new delivery stores opened in the period (2005: 23) * Before 2005 accelerated LTIP charge of 0.3m and exceptional profit on sale of corporate stores of 0.8m 3

4 Financial Highlights contd. 428 stores at end of period (2005: 380 stores) Strong like-for-like sales growth of 8.3% in 357 stores (2005: 8.4% in 317 stores) E-commerce sales up 46.9% to 9.6m (2005: 6.5m) Excellent cash generation with cash at hand of 8.6m (2005: 8.5m) No share buybacks in period (2005: 400,000 shares: cost of 1.1m) Capital reorganisation plans proceeding 4

5 System sales m H H H H H1 19% compound annual growth rate 5

6 Store Openings and Population Openings H H H H H1 + FY Forecast Store Count H1 H2 ON TRACK TO OPEN 50 STORES WITH MARKET POTENTIAL OF 1,000 STORES 6

7 Profit and Loss 26 weeks to 26 weeks to 52 weeks ended 2 July July 2005 % increase 1 Jan System sales 114,850 97, ,678 Operating profit pre-exceptionals 6,325 5, ,004 Accelerated LTIP charge - (313) - (626) Operating profit 6,325 4, ,378 Profit on sale of fixed assets Profit before interest and tax 6,335 5, ,254 Net interest payable (62) (50) (24.0) (85) Profit before tax 6,273 5, ,169 Taxation (1,674) (1,438) (16.5) (2,922) Profit after tax 4,599 4, ,247 Dividends - per share 4.15p 3.10p 33.9% 7.25p - cover 2.2x 2.6x * x Earnings per share - pre-exceptionals - basic 9.18p 7.00p 31.2% 15.75p - diluted 8.77p 6.87p 27.7% 15.00p * Not accrued for under FRS21 7

8 Balance Sheet At At At 2 July July Jan Fixed assets 15,713 15,332 15,370 Current assets 23,882 24,386 20,992 Creditors due within one year (14,033) (13,941) (13,742) Net current assets 9,849 10,445 7,250 Creditors due after more than (9,232) (8,060) (9,085) one year Deferred tax and provisions (1,273) (623) (1,447) 15,057 17,094 12,088 8

9 Analysis of Shareholder Funds At At At 2 July July Jan At beginning of year 12,006 14,847 14,847 Share issues Share buyback - (1,096) (8,222) EBT shares - - (1,140) Profit for year 4,622 4,093 8,255 LTIP charge Dividends (2,115) (1,531) (3,169) 14,969 17,094 12,006 Minorities ,057 17,094 12,088 9

10 Analysis of Borrowings At At At 2 July July Jan Cash at bank 8,593 8,496 5,885 DP Capital (2,661) (2,617) (2,500) EBT loans (7,500) (6,360) (7,500) Other (19) (43) (26) Net debt (1,587) (524) (4,141) Shareholders funds 15,057 17,094 12,006 Gearing % 10.6% 3.1% 34.5% 10

11 Net Cash Inflow From Operating Activities At At At 2 July July Jan Operating profit 6,263 4,690 10,214 Depreciation ,508 Amortisation LTIP charge (Increase)/decrease in stocks (13) (Increase)/decrease in debtors (406) (452) 337 Increase/(decrease) in creditors 349 (1,844) (968) Net cash inflow from operating activities 7,313 4,005 12,674 11

12 Cash Flow Statement At At At 2 July July Jan Net cash inflow from operating activities 7,313 4,005 12,674 Servicing of finance + returns on investment (50) 66 (38) Taxation paid (1,670) (518) (1,549) Capital expenditure + financial investment (985) (1,102) (1,999) (Acquisition)/disposal of subsidiaries (203) 3,586 3,048 Dividends paid (2,115) (1,536) (3,169) Net cash inflow before financing 2,290 4,501 8,967 Financing 418 (829) (7,906) INCREASE IN CASH 2,708 3,672 1,061 12

13 Basic Earnings Per Share Growth * Compound increase of 41% Pence * H H H H H1 Basic EPS Linear (Basic EPS) *Before 2005 accelerated LTIP charge of 0.3m and exceptional profit on sale of corporate stores of 0.8m 13

14 Dividends Per Share Growth Compound increase of 52% 3.50 Pence H H H H H1 Dividends per Share Linear (Dividends per Share) 14

15 Share price Domino s share price Domino s vs FTSE/AIM 559 DOMINOS PIZZA UK & IRL 5.5 DOMINOS PIZZA UK & IRL FTSE ALL-SHARE FTSE ALL-SHARE TRAVEL & LEISURE FTSE AIM Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb Mar 06 Apr 06 May 06 Jun Jul-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 15

16 The historical five year growth story System Sales m PBT - m PBT 0 21% CAGR in System Sales 40% CAGR in PBT 16

17 The financial model at build out At build out * 2005 (circa 2017) No. of stores 407 1, openings p.a. AWUS growth at 3% p.a. ** 10,700 15,000 System sales 200m 780m Profit before tax 11.2m 70.2m PBT/System sales 5.6% 9.0% Stores double profits grow six-fold 10% of incremental sales to profit Significant operational gearing Commissaries Central infrastructure * Independent analyst research not a forecast ** Average Weekly Unit Sales 17

18 The financial model at build out (contd..) At build out * 2005 (circa 2017) PBT 11.2m 70.2m Dividend Cover 2.3x 2.0x - Pence 7.3p 53.0p Share buybacks * Average no. of shares 50.8m 40.0m in issue EPS - pence 16.2p 106.0p COMPELLING 10 YEARS OF CASH GENERATIVE ORGANIC GROWTH * Independent analyst research not a forecast *To achieve cash neutral position at 2017 Circa 20% of equity 18

19 The sales momentum Strong LFL mature store sales driven by New product launches Technological innovation Focus on Operations 5 out of top ten worldwide stores last year Top store in Domino s system worldwide (Dublin) 19

20 Like-for-like sales growth % Growth % LFL store population 5 6.9% 8.4% 8.3% % H H H H H1 LFL store population 0 20

21 Analysis of like-for-like sales trend Ay Carumba Dominator BOGOF +555 Football Fanatic + World Cup Chicago Thin Crust Cheese Steak Melt Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2005 AVG 2006 AVG 21

22 The sales momentum New product launches in 2006: 6 Tier 1 campaigns in 2006 (2005: 2 Tier 1 product launches) Supported by increased Ad Fund contributions 5% of system sales (2005: 4%) 11.5m fund and growing Second half: Second Simpsons campaign Fun Diddly Onion Rings Last quarter launch in development MAJOR DRIVER OF SALES SUCCESS FOOTBALL FANATIC TV AD WITH MICHAEL OWEN 22

23 The sales momentum technological innovation E-commerce Net sales of 9.6m (2005: 6.5m) Growth of 46.9% Average ticket of (net of VAT) 25% higher than telephone order Now 12.3% of all UK delivered sales (2005: 10.3%) On track for 15% by end of k per night at peak times ROI Platform Launch anticipated in second half Mobile phone ordering; first pizza company in UK 23

24 The sales momentum E-commerce 2,000, % E-commerce sales 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , % Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% % of UK delivery sales Net Sales Net Sales as % Delivered Sales Linear (Net Sales) 24

25 Operational focus Fanatical attention to detail Focus on product quality and improving delivery times Increase in store audits & mystery visits Backed by Incentives and Awards Fastest Pizza Maker in Domino s International markets Franchisee Profitability key to growth Outrageous Service Key measure: Out-the-Door times (OTD) Correlation to higher sales OTD Elite sales up 14% 25

26 Current trading and prospects Store openings on track Solid like-for-like sales expected Exciting new product launches Tough hurdle to beat in second half Strong cash generation set to continue Capital reorganisation in progress for H2 further share buyback Resilient in tougher economic times Well placed for another year of strong growth 26