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Domino’s Pizza Delivers Satisfying Profits in 2012

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On the 25th of February, Domino’s Pizza, the UK biggest pizza deliver company, recorded higher-than-expected pretax profits as new outlets and robust online growth boosted sales. However, growth remained slow early in 2013 due to a heavy snowfall and bad weather conditions.

Annual Profits Rise by 11 percent

Domino’s Pizza Group Plc witnessed an increase in its full year preliminary pre-tax profit after it opened a record number of stores and its online sales climbed. The full year pre-tax profit of the company rose by nearly 11 percent to £46.7 million as anticipated by analysts. Like-for-like sales of the company increased by approximately 5 percent in more than 60 UK outlets in 2012. Excluding German and Swiss markets, the annual profit of Domino’s Pizza for the fiscal year ended December 2012 was approximately 14 percent higher than in 2011, amounting to about £49.7 million. The company made a pre-tax profit of around £42.2 million in 2011. The revenue for the period increased to nearly £240.5 million from £209.8 a year earlier. In addition, the company informed that it had sold as many as 61 million pizzas in 2012, compared to approximately 56 million in 2011.

Domino’s Pizza experienced a drop in sales in the early months of 2013 due to heavy snowfall in the UK, resulting in a sluggish growth rate. The company was forced to shut down 498 of its stores, impacting mainly two-third of its UK store network as it was engulfed by poor weather conditions and heavy snowfall in the area. Moreover, Domino’s Pizza incurred start up losses worth £3 billion due to the commencement of its Swiss and German businesses early in 2013.

Domino’s Goes Digital

Domino’s Pizza announced that online orders doubled in the year 2012 as British customers preferred cheap home deliveries on holiday nights rather than expensive outings. Data showed that more than 20 percent of orders were placed online using tablets and smartphone. The mobile orders placed in 2011 accounted for slightly over 10 percent sales of the company. Domino’s Pizza reported that net online sales in the UK alone accounted for nearly 55.7 percent of its deliveries, up from 44.3 percent a year earlier. Moreover, online system sales of Domino’s Pizza increased by around 46 percent to £268.5 billion in 2012. "Despite a very challenging economic environment, our people and our franchisees have delivered another impressive set of results.” claimed Lance Batchelor, Chief Executive Officer at Domino’s Pizza PLC.

The UK-based pizza delivery firm is planning to increase its workforce by around 1500 people by the end of 2015. Moreover, Domino’s Pizza opened 69 additional stores in 2012, compared to 62 stores commenced a year earlier, bringing its total to 805 outlets of four countries together.  Over the years, Europe has emerged primarily as the key market of the company. Also, Domino’s Pizza is seeking to develop its operations in European countries such as Germany, Luxembourg and Switzerland.

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