Domino's Pizza says profits in line after tasty fourth quarter

8th Jan 2014 07:32

- FY profit in line with consensus- UK profits ahead but German losses weigh- New CEO recruitment process under wayBut for losses from its German arm, Domino's Pizza would have beaten analyst profit forecasts last year, which finished with an improved fourth quarter. In the UK, sales rose 12.2% to £608.8m in the 13 weeks to December 29th, with like-for-like sales also increased 7%. Mature stores enjoyed like-for-likes of 10.9%. Chief Executive Officer (CEO) Lance Batchelor, who recently handed in his resignation, said full-year profits were ahead of market expectations for the UK and Ireland. However, the group's strategy to move corporate stores into franchisee hands in Germany created losses there, which were higher than expected mainly as this transition was slower than expected.German franchisees will take control of 13 of the 15 corporate stores, with the flagship store in Dusseldorf retained as a corporate store and as a training facility for the wider franchise system. As at period end, the German unit had 23 stores.Sales in Germany and Swiss sales remained solid, with like-for-likes up 4.6% and 5.4%, respectively. Batchelor said it was an "outstanding" quarter in the UK and an encouraging return to robustness in sales growth in the Republic of Ireland, where positive like-for-like sales were recorded in every quarter in 2013 after four years of decline. During the period, Domino's opened 27 new stores in the UK, taking openings to 50 new stores and no closures for the year and its UK total to 777.Online sales continue to grow and accounted for 65.5% of UK delivered sales in the quarter, with mobile sales also up by 91% in the period and accounting for 30.9% of total online sales across the whole year.Although there had been much senior management churn in the year, Batchelor's resignation on December 6th came as a surprise. Non-Executive Chairman Stephen Hemsley assured that an executive search firm had been appointed and the recruitment process was now underway. "We are confident of attracting a CEO of the highest calibre," he said.OH