Finance Finance News Shares jump on Domino’s Pizza’s extra large profit
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Shares jump on Domino’s Pizza’s extra large profit

Domino's pizza
Domino's is said to be considering shrinking the size of its pizzas to cut costs. Getty
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Domino’s shares have jumped in early trade after the pizza chain delivered a healthy profit boost.

The company’s net profit rose by nearly 50 per cent to $42.3 million in the 2013/14 financial year, and it expects underlying earnings to rise by 20 per cent this financial year.

Its shares were up $1.49, or 7.2 per cent, at $22.10 at 1222 AEST on Tuesday.

The company also announced a fully-franked final dividend of 19 cents per share, which takes the full year distribution to 36.7 cents, up from 30.9 cents in 2013.

OptionsXpress Market Analyst Ben Le Brun said the results had met market expectations and alleviated concerns the company’s shares were priced too high.

“There’s always some jitters prior to earnings season because their (high-priced shares’) margin for error is absolutely minimal,” he said.

“But they’ve delivered in spades with these results today.”

The pizza maker expects to lift its earnings by around 20 per cent in 2014/15 as it rolls out up to 185 new stores.

Domino’s added 44 stores across Australia and New Zealand during 2013/14, along with 27 in Europe and 61 in Japan.

It has attracted more orders from online customers with 60 per cent of orders coming via laptops, iPhones, tablets and other devices.

Meanwhile, same store sales lifted 5.8 per cent, thanks in part to the introduction of new products, including its Summer Prawn and Perri Perri ranges in Australia.

The company recorded further sales growth in July, with same store figures up 14.8 per cent in Europe and 10.3 per cent in Australia and New Zealand.

Chief executive Don Meij said the company expected the company’s growth to continue in 2014/15.

“We are confident of continuing the current strong momentum to deliver EBITDA growth in the region of 20 per cent and add approximately 175-185 new stores to the group,” he said.