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UK takeaway franchise player Domino’s Pizza group posted a rise in order count and sales last year on new store openings and increased market share.

Group revenue was up 11.1% (53-week up 13.2%), driven by an increase in system sales volume, acceleration of store openings and the pass-through of increased food costs.

Like-for-like system sales, excluding splits and the impact of VAT, were up 5.7%, an increase from 5.3% in 2022.

This growth slowed to 0.4% in the fourth quarter, though that was against a tough comparator in 2022, when sales grew 13.9%.

Total orders of were up 1% to 70.5 million on a 52-week basis, with collections up 13.3% to 25.3 million and delivery orders down 4.8% with an improved performance in the fourth quarter.

The group continued to make gains in UK takeaway market share, taking its share of the market to 7.2% from 7.1%.

It accelerated store openings during the year, with 61 new stores, and expects to open another 70 in 2024.

Underlying EBITDA was up 3.6% compared with FY22 (53-week basis up 6.1%), driven by an increase in system sales volume, material acceleration of store openings and the pass-through of food costs to franchise partners.

Statutory profit after tax was up 40.9% on 2022 as a result of profit from the disposal of the German associate, generating a profit of £40.6m recorded in non-underlying results.

So far in 2024 it said trading in February had seen an improved sales and order trajectory following a slow January, in part because it tactically held back on marketing spend to support more strategic launches later in 2024.

It expects to see some food cost deflation in 2024, which will be passed through to our franchise partners.

As a result of reducing its cost base last year, it expects to deliver 2024 underlying EBITDA in line with current market expectations, and so delivering another year of further profit growth, despite the continued uncertain consumer environment.

“Last year we continued to make strong strategic progress with 61 new store openings whilst offering our customers compelling value,” said CEO Andrew Rennie. “These efforts delivered an increase in sales and shareholder returns with continued robust profit growth. I would like to thank our world-class franchisees and colleagues for their immense hard work and dedication in achieving these results.

“In December I set out a framework for accelerating sustainable, long-term growth. Following a great year for store openings in 2023, we are accelerating our growth and expect to have 1,600 UK & Ireland stores delivering £2bn of system sales by 2028 and 2,000 stores by 2033 delivering £2.5bn of system sales. Crucially, we have alignment with our franchisees and there is a strong, motivated second generation talent coming through the franchisee ranks to help drive this growth.”

Meanwhile this morning, the group announced it had taken full control of Domino’s largest franchise business operating in the Republic of Ireland and Northern Ireland.

It has acquired the remaining 85% shareholding it does not already own in Shorecal Limited for a total consideration of €72m (approximately £62m). DPG will also repay the outstanding debt on completion, currently €19.9m (approximately £17.3m).

Rennie said: “Since March 2021, we have taken a disciplined approach to capital allocation by following a clear framework. We have prioritised investment in the core business to drive growth and I’m excited that today we’re acquiring full control of Shorecal to accelerate our Irish growth. We see a significant opportunity to meaningfully increase our Irish store count and deliver long-term, sustainable returns.”

The group’s shares have fallen 7.8% this morning to 339.4p.

Morning update

The Competition & Markets Authority has identified “multiple concerns” in the veterinary care market, which could have implications for companies such as listed retailer Pets at Home.

The CMA has today published its main concerns following an initial review into the veterinary sector and has decided to launch a formal market investigation after an initial review prompted 56,000 responses from the public and industry.

The CMA raised concerns that pet owners might be overpaying for medicines or prescriptions and large corporate groups may have incentives to act in ways which reduce choice and weaken competition.

It also said consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs and the industry is concentrated local markets, in part driven by sector consolidation, which may be leading to weak competition in some areas.

CMA CEO Sarah Cardell said: “We launched our review of the veterinary sector last September because this is a critical market for the UK’s 16 million pet owners. The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue is high and why we were right to look into this.

“We have heard concerns from those working in the sector about the pressures they face, including acute staff shortages, and the impact this has on individual professionals. But our review has identified multiple concerns with the market that we think should be investigated further.

“These include pet owners finding it difficult to access basic information like price lists and prescription costs – and potentially overpaying for medicines. We are also concerned about weak competition in some areas, driven in part by sector consolidation, and the incentives for large corporate groups to act in ways which may reduce competition and choice.

“Given these strong indications of potential concern, it is time to put our work on a formal footing. We have provisionally decided to launch a market investigation because that’s the quickest route to enable us to take direct action, if needed.”

On the markets this morning, the FTSE 100 has opened strongly, up 0.8% to 7,733.4pts.

Early risers include Just Eat Takeaway.com, up 2% to 1,125p, Cranswick, up 1.3% to 4,125.9p and British American Tobacco, up 1.3% to 2,349.5p.

Fallers include Pets at Home, down 3.6% to 265.3p, Nichols, down 1.9% to 1,020p and THG, down 1.2% to 59.9p.

Yesterday in the City

The FTSE 100 opened the week up 0.1% at 7,669.2pts.

Risers yesterday included Imperial Brands, up 2.8% to 1740.5p, Fever-Tree, up 2.4% to 1,207p, Domino’s Pizza Group, up 2.3% to 368.2p, Ocado, up 1.9% to 456.8p and Coca-Cola Europacific Partners, up 1.5% to €66.00.

The day’s fallers included Glanbia, down 3.3% to €17.21, Pets at Home, down 1.5% to 275.2p, Tesco, down 1.4% to 282.2p, Deliveroo, down 1% to 113.8p and Compass Group, down 0.9% to 2,134p.

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