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Tue 9th Mar 2021 - Domino’s plans 200 more UK stores as like-for-like sales rose 10.3% in 2020
Domino’s plans 200 more UK stores as like-for-like sales rose 10.3% in 2020: Domino’s Pizza UK has reported a strong UK and Ireland performance, with system sales of £1,348.4m in the 52 weeks to 27 December 2020, up 11.4% in total with like-for-like sales, excluding splits, up 10.3% (9.3% including splits). Underlying profit before tax was £101.2m, up £2.4m, with covid-19 costs incurred of £9m to ‘support franchisees to trade safely’. Statutory profit after tax of £39.7m, up from £2.8m, with non-underlying charges reduced to £2.1m (2019: £21.8m) and loss on discontinued international operations reduced to £42.5m (2019: £56.5m), including £22.6m (2019: £35.2m) of impairments of international operations. The company said it remained open throughout the year with strong growth in delivery offsetting significant covid-19 impact on collection business. It reported that the digital transformation of the business accelerated through the year, with UK online sales up 23.9% and App sales up 26.2%. Online sales now account for 94.3% of delivery sales in UK. Domino’s said it had maintained constructive engagement with our franchisees and had made an attractive offer to the Domino’s franchisees in an attempt to reset relationship. The company said it expected to deliver on its medium-term ambition of total system sales of £1.6bn to £1.9bn. It said it had a new strategy for the business centred on growth, and was accelerating growth of its delivery business, opening an additional 200 stores. Of current trading it stated: “Trading in the current financial year has started strongly with exceptional trading over the new year period as we recorded our highest ever sales week. Our delivery business continues to perform very well, and collection remains at around 60% of 2019 levels. We have demonstrated we have a flexible and robust business model that has been able to adapt to the uncertain and changing market conditions throughout 2020. The current trends and demand expectations, in addition to the investment in capabilities we have and are making, gives us confidence in delivering further operational and financial progress in the coming year”. Chief executive Dominic Paul said: “I am pleased with the performance we’ve delivered this year, and grateful to everyone across the system for their commitment during this extraordinary period. We’ve worked successfully in partnership with our franchisees to continue to operate safely through the various lockdowns and play our part in feeding the nation during the pandemic, while supporting our colleagues and key workers. We have continued to invest and innovate across the business, launching exciting new products such as our vegan pizza and investing in technology, with our new App, in the supply chain and in marketing to further strengthen the brand. At the same time, we have been looking to the future, and today we are announcing a multi-year strategic plan which will drive growth across the business and deliver an exciting and profitable future for both our shareholders and our franchisees. In my first year with Domino’s, it has been clear to me that we have a great platform to build from – a uniquely powerful brand, high digital participation and outstanding people and franchisees. Our new strategy will enable us to build upon our strengths in both delivery and collection and provide our customers even better quality and value, which will drive continued strong performance. We have maintained an open dialogue with our franchisees throughout the development of this plan and, while we do not have an agreement yet, we have made an attractive offer to them which we believe will deliver powerful benefits to both them and the group. As the economy begins to reopen, we have invested in our capabilities to enable us to capitalise on the substantial opportunities ahead. I am confident that we can achieve our vision of being the UK and Ireland’s favourite food delivery and collection brand, and deliver great results for our colleagues, our customers, our shareholders and our franchisees.” He added: “As we come out of the restrictions of covid-19 we will be competing in an environment that has most likely changed forever with an increased presence of aggregator operators and more digitally aware consumers that are familiar with the benefits of home food delivery. We have already invested in our core capabilities and built upon our core strengths to capture the opportunities ahead. We know how to improve our marketing effectiveness, utilise data and insights to inform our decision making, leverage the strength of our supply chain to drive efficiencies and accelerate our already strong digital and technology credentials. We are starting from a position of strength. Our supply chain already achieves 99.9% availability and accuracy; 94.3% of delivery sales are made online, our IT platform stability has significantly improved; and our new mobile App is due to launch later on in the first half of this year. In developing our strategic growth plan we have consulted extensively with our franchisees and also scoured the global Domino’s system to capture best practice and innovation, informed by in-depth consumer insights and future trends to help us evolve the UK and Ireland business. Our vision is to be the favourite food delivery and collection brand, with pizza at our heart.”

Turtle Bay closed German sites in pandemic, reports like-for-like sales had stabilised prior to pandemic: Turtle Bay put its two German sites into administration in 2020 in the wake of the covid pandemic, resulting in a non-cash impairment of £1.9m, according to newly filed Companies House documents. The company also closed two of its sites in the UK ‘for the foreseeable future’. The company said: “Both sites were at the tail of the estate and were considered unviable because of the uncertainty caused by covid-19.” Turtle Bay refinanced its current bank facility with a three-year facility last year including additional finance through a £4.5m revolving credit facility under the CBILs scheme. A document states: “Our shareholders have also shown their support by injecting a further £500,000 into the business. The net asset position of the company at the year-end date was £3.5m (2019: £13.6m).” The company saw like-for-like sales rose 1.1% in the year ended 29 February 2020 (2019: 12.9% decrease), driven by a “strong performance in drink sales, improved service levels and an investment in our people”. The company added: “This resulted in an UK adjusted Ebitda of £5.7m (2019 restated:£7.7m). Margins were well maintained despite the pressure of supplier increases and above inflation national living wage rises. Total sales were down 1.4% (2019: 2.5% decrease) to £63.7m driven by the closure of one site (a site in Huddersfield that had opened in 2015). The group made a £800,000 profit before tax (2019: £2.5m). Once adjusted for non-recurring items, loss before tax was £6.3m (2019 restated: £1.7m profit).” Bank net debt reduced over the year to £8.4m (2019: £13.2m) and at the start of the pandemic the company negotiated a six month capital repayment holiday – and the bank waived its covenant requirements at that time. Adam Gregory, who had joined as operations director from Wagamama in July 2019, became a full board director in September 2020. Steve Robinson, who joined from Young’s as chief financial officer in November 2019, became a board member in January 2020. Joanne Coe, formerly of Gourmet Burger Kitchen, became head of people in September 2019.

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