Domino’s Pizza Share Price Plunged 11.5% on Full-Year Results

The Domino's Pizza Group PLC (LON: DOM) share price plunged 11.5% after the company released its full-year results for the year ended 31 December 2023. The renowned global pizza chain's principal franchise holder in the UK reported notable enhancements in its profits, cash flows, and dividends in 2023, propelled by robust organic expansion.

The company also plans to inaugurate additional outlets, aiming for £2.0 billion in sales by 2028. Total system sales, encompassing franchise and company-owned store revenues, reached £1.54 billion for the year ending December 24, marking a 5.8% increase from the previous year. Comparable sales were also up by 5.7%.

Despite this growth, the pace of organic expansion decelerated to 0.4% in the last quarter, influenced by the prior year's significant 13.9% surge in comparable sales. Revenue for the group rose by 11.1% to £667 million, a boost attributed to the launch of 61 new locations.

Domino's holds a 7.2% stake in the UK's fast-food sector and operates 1,319 outlets across the UK and Ireland. The company anticipates expanding its network by 70 stores in 2024, aiming for 1,600 by 2028 and 2,000 by 2033. Sales are expected to climb to £2.0 billion by 2028 and £2.5 billion by 2033.

The statutory pre-tax profits soared by 41% to £115 million, largely thanks to earnings from selling its German associate business, while the core pre-tax profit remained steady at £99 million.

Year-over-year, free cash flow increased by 22.8% to £97 million, and a final dividend of 7.2p was proposed, elevating the annual dividend by 5% to 10.5p. Furthermore, Domino's announced the acquisition of Shorecal, its biggest franchise operator in the Republic of Ireland and Northern Ireland, for €72 million.

The company also announced that it had acquired the remaining 85% stake in Shorecal Limited, the largest Domino's franchise business operating within the Republic of Ireland and Northern Ireland. The firm acquired the stake for a total consideration of €72 million (approximately £62 million), subject to completion adjustments.

Chief Executive Andrew Rennie said: “Our strategy is firmly aimed at hastening organic growth while seeking strategic acquisitions to enhance value, with the goal of developing a bigger, more profitable enterprise swiftly yet judiciously. We anticipate sharing more details on these ventures in the upcoming months.”

Domino’s Pizza Plc share price. 

The Domino’s Pizza share price plunged 11.49% to trade at 323.25p from Monday’s closing price of 365.20p.