REG - Domino's Pizza Grp - Full year results for the year 2024
11/03/2025 07:15
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RNS Number : 0893A Domino's Pizza Group PLC 11 March 2025
11 March 2025
LEI: 213800Q6ZKHAOV48JL75
Domino's Pizza Group PLC ("DPG") - Full year results for the year ended 29
December 2024
Strategic and operational progress delivers Underlying EPS growth
New Profit and Growth Framework with franchise partners designed to drive
growth
Positive LFLs and orders at the start of FY25
52 weeks to 29 December 2024 52 weeks to 24 December 2023 % change 52 weeks vs. 52 weeks 53 weeks to 31 December 2023
(unaudited)
System sales(1) £1,571.5m £1,540.5m +2.0% £1,571.7m
Group revenue £664.5m £667.0m (0.4)% £679.8m
Underlying(2) EBITDA £143.4m £134.8m +6.4% £138.1m
Underlying(2) profit before tax £107.3m £99.0m +8.4% £101.7m
Statutory profit after tax £90.2m - (21.6)% £115.0m
Underlying(2) basic EPS 20.4p 18.0p +13.3% 18.4p
Statutory basic EPS 22.9p - (18.2)% 28.0p
Full year dividend per share 11.0p - 4.8% 10.5p
FY23 was a 53-week reporting period to 31 December 2023.
For the purposes of comparability, growth rates in this statement are given on
a 52-week basis.
Commenting on the results, Andrew Rennie, CEO said:
"Today's results show the benefits of our long-term strategy. We've
capitalised on our competitive strengths, agreed a new five year framework
with our franchise partners and opened 54 stores. Our trading momentum
accelerated as the year progressed, our delivery channel returned to growth
and we delivered strong underlying earnings growth. This has required
relentless focus by our colleagues and franchise partners, and I thank them
for their brilliant work.
In 2024 we made disciplined investments in new growth opportunities, Shorecal
in Ireland and DP Poland, partly financed through recycling store disposal
proceeds. Today we have announced an additional investment in our Northern
Irish JV, further enhancing our ability to drive growth. We continue to
explore targeted, accretive opportunities, which would be financed within our
existing balance sheet capacity.
Since 2021 we have announced nearly £500m of shareholder returns, have
increased dividends again today and remain committed to returning excess
capital in the future.
2025 has started positively in an uncertain market. With a good store opening
pipeline, I am confident that with the quality of our teams and franchise
partners, our unrivalled scale, resilient business model and capabilities,
Domino's is well placed to thrive in 2025 and beyond."
FY24 financial highlights - strong Underlying(2) profit growth:
· Like-for-like system sales(1,3,4) up 0.7%, with improving
performance in every quarter, Q4 24 +3.0%
· Group revenue was broadly stable reflecting the expected
decrease in supply chain revenue being nearly offset by revenue from Shorecal
(acquired in H1 24)
· Underlying(2) EBITDA up 6.4%, driven by Shorecal and lower
technology platform costs
· Statutory profit after tax down 21.6% as FY23 benefitted from
sale of German associate
· Underlying(2) EPS up 13.3% further benefiting from share
buybacks
· Strong balance sheet with Net Debt(5) of £265.5m: Net Debt to
EBITDA 1.93x within our target range, down from 2.16x at H1 24
· Proposed final dividend: 7.5p per share. FY24 total dividend of
11.0p per share, up 4.8% vs. FY23
· FY24 Capital Allocation: £82.5m deployed in capex and
accretive investments (Shorecal, DP Poland) and £67.9m returned to investors
through dividends and buybacks funded by £84.7m free cash flow, £33.0m from
London corporate store disposal and a £32.7m increase in Net Debt(5)
· Cumulative announced returns via dividends and share buybacks
of c.£500m since March 2021
FY24 operational highlights - improving order count momentum:
· Total orders 71.7m (+1.7%); Delivery: +2.4% (with Q4 24:
+7.9%); Collection: +0.5%
· Average delivery time: 24.5 mins (FY23: 25.0) reflecting
intense focus by our franchise partners
· New store openings: 54 new stores across 21 different franchise
partners, with record Ireland store openings
· Digital progress: c.9.5m app customers, app now 76.3% of online
orders (+2.7ppts)
· Average franchisee store EBITDA of £168k, +6.6% despite 10%
minimum wage increase in April
FY24 strategic objectives - significant progress:
· Five year Profitability and Growth Framework ("PGF") agreed
with franchise partners to capitalise on significant long-term growth
opportunity
· Loyalty programme trial with c.630k customers completed and
performing ahead of expectations, now moving to second phase with c.3m
customers and a targeted launch in 2026
· Uber Eats roll out completed: delivered incremental customers
and orders
· Significant portfolio enhancement with Shorecal acquisition,
contributed £5.5m to Underlying EBITDA
· Disposal of London corporate store estate for £34.8m
· Building engines of future growth with investment in DP Poland.
Continuing to assess opportunities for a second brand, where we can leverage
the scale and capabilities of the Group and deliver attractive returns to
shareholders
· Focusing on opportunities that are in-line with our guardrails.
Current pipeline is of a size that would be financed within our existing
balance sheet capacity
· Purchase of additional 24% for £25.6m in Victa DP Ltd (£7.2m
equity, £18.4m debt funding), our joint venture in Northern Ireland, bringing
DPG's shareholding to 70%. Consistent with our strategy of unlocking growth in
Northern Ireland and Republic of Ireland following the acquisition of Shorecal
in 2024 and the investment in the Ireland supply chain centre
Current trading and outlook
We made strong strategic progress during 2024, with trading momentum
accelerating as the year progressed. Although the UK economic environment
remains uncertain, in the first ten weeks of the year, our growth has been
positive with total system sales +2.4%, total orders +0.7% and like-for-like
sales +0.7%.
2024 was the year when we returned delivery to growth, and in the current
environment we see an opportunity to drive further growth in collection orders
in 2025 through value-based marketing campaigns. Our brand and market
positioning continues to strengthen and we have a number of initiatives, from
the next phase of our loyalty trial to exciting menu innovation, which will
improve our customer proposition and drive growth in the system. With the PGF
in place, we look forward to opening in excess of 50 new stores in 2025.
We expect FY25 Underlying EBITDA to be in line with current market
expectations,(6) excluding the positive impact of the Victa investment
announced today.
Our technical guidance for FY25 is as follows:
· Additional investment in Victa JV expected to contribute c.£3m
to Underlying EBITDA
· Underlying depreciation & amortisation of between £20m to
£23m
· Underlying interest (excluding foreign exchange movements) in the
range of £17m to £19m
· Estimated underlying effective tax rate of c.24.5% for the full
year
· Capital investment of c.£25m
· Net debt at year-end between £260m and £280m
Contacts
For Domino's Pizza Group plc:
Investor Relations
Will MacLaren, Director of Investor Relations +44 (0) 7443 192 118
Media:
Tim Danaher, Emilia Smith - Brunswick +44 (0) 207 404 5959
Results meeting
A results meeting and Q&A for investors and analysts will be held at 09:30
GMT today. The webcast and presentation can be accessed here
(https://url.uk.m.mimecastprotect.com/s/pPsyCjqQRsg0ogqi7sBTmKfAe?domain=investis-live.com)
and will also be available on the Results, Reports and Presentations page of
our corporate website.
In addition, we will replay the webcast and Q&A at 16:00 GMT today for
North American based investors not able to join the live presentation at 09:30
GMT this morning. Please click here
(https://url.uk.m.mimecastprotect.com/s/pPsyCjqQRsg0ogqi7sBTmKfAe?domain=investis-live.com)
to register.
Financial calendar
Domino's Pizza Group will release a Q1 25 trading statement on 24 April 2025
About Domino's Pizza Group
Domino's Pizza Group plc is the UK's leading pizza brand and a major player in
the Irish market. We hold the master franchise agreement to own, operate and
franchise Domino's stores in the UK and the Republic of Ireland. As of 29
December 2024, we had 1,372 stores in the UK and Ireland. We also have a 12.1%
shareholding in Domino's Pizza Poland.
Cautionary statement
Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and assumptions and are
subject to a number of risks and uncertainties that could cause actual events
or results to differ materially from any expected future events or results
expressed or implied in these forward-looking statements. Persons receiving
this announcement should not place undue reliance on forward-looking
statements. Unless otherwise required by applicable law, regulation or
accounting standard, Domino's does not undertake to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise.
Notes
1. System sales represent the sum of all sales made by both franchised
and corporate stores to consumers in UK & Ireland. These are excluding VAT
and are unaudited.
2. Underlying is defined as statutory performance excluding items
classified as non-underlying which includes significant irregular costs,
significant impairments of assets and other costs associated with acquisitions
and disposals as set out in note 4 to the financial information.
For FY24, underlying excludes profit on the disposal of the London corporate
stores of £21.4m, £5.0m income relating to historical share-based payment
schemes, £5.6m costs relating to the Shorecal acquisition and £3.2m in
terminated acquisition costs. These resulted in a non-underlying tax charge of
£7.7m.
For FY23, Underlying excludes the £40.6m profit on disposal of the German
associate as well as the £1.3m tax charge relating to historical share-based
compensation arrangements.
3. Like-for-like (excluding splits) system sales performance is
calculated for UK & Ireland against a comparable 52-week period in the
prior period for mature stores which were not in territories split in the
current period or comparable period. Mature stores are defined as those opened
prior to 25 December 2022.
4. FY23 was a 53-week year, so the comparator weeks in FY24 are
different. The comparable basis adjusts for this difference, by comparing
weeks 1-52 in FY24 with weeks 2-53 in FY23.
5. Net Debt is defined as the bank revolving facilities, private
placement facilities, cash and cash equivalents and other loans, including
balances held in disposal groups held for sale.
6. Current mean of FY25 Underlying EBITDA expectations is £146.4m
with a range of £143.0m - £148.2m. Based on 9 analysts' forecasts.
FY24 performance review
System sales(1) were up 2.0% on a 52-week basis to £1,571.5m and on a
comparable basis, FY24 like-for-like sales, excluding splits and VAT, were up
0.7%, improving every quarter in the year. Delivery orders returned to growth
in FY24 and were up 2.4% with collection orders up 0.5%.
Underlying(2) EBITDA was £143.4m, up 6.4% on a 52-week basis with lower
supply chain EBITDA, due to the pass-through of lower food costs to our
franchise partners, substantially offset by the contribution from Shorecal and
lower technology platform costs.
Underlying(2) profit before tax was £107.3m, up 8.4% on a 52-week basis as
lower depreciation was largely offset by increased finance costs.
Statutory profit after tax was £90.2m, down from £115.0m on a 53-week basis,
primarily as a result of the disposal of the investment in the German
associate which generated a non-underlying profit on disposal of £40.6m in
FY23.
Underlying(2) earnings per share increased 13.3% on a 52-week basis to 20.4p
in FY24, driven by increased Underlying EBITDA and a lower number of shares in
issue from share buyback programmes.
Free cash flow generated by the business was £84.7m, a decrease from £97.0m
in FY23, primarily due to increased interest and corporation tax payments
during the year as well as a working capital benefit in FY23.
In line with our capital allocation framework, we will pay a final dividend of
7.5p, giving a full year dividend of 11.0p, a 4.8% increase on FY23.
Substantial strategic progress in the core UK & Ireland business
In March 2024, we outlined our key strategic operational goals to give our
customers better service and better value and therefore to drive profitable
growth for Domino's and our franchise partners.
We laid out four strategic priorities to achieve this and we have made
substantial progress against each one.
1. Franchisee profitability
A key objective for FY24 was to work with our franchise partners to help
improve their store profitability. Despite inflationary pressures,
particularly in labour costs from the 10% minimum wage increase in April 2024,
our franchise partners further increased their profitability in FY24. Average
UK store EBITDA (unaudited) in FY24 grew 6.6% to £168k (FY23: £158k),
generating a 14% EBITDA margin (FY23: 13%).
In December 2024 we reached a new five-year Profitability and Growth Framework
("PGF") with our franchise partners to capitalise on the significant long-term
growth opportunity. This framework underpins our confidence in our targets of
in excess of 1,600 stores delivering £2.0bn of systems sales by 2028 and
2,000 stores delivering £2.5bn of system sales by 2033 driving profit growth
across the system. The PGF aligns DPG and franchise partners through shared
investment and creates a framework of incentives to drive meaningful new store
openings.
Together with our franchise partners, we have made significant strategic
progress since 2021, collectively benefiting from an aligned system. New store
openings have accelerated, national value campaigns have delivered increased
orders, and we have brought more menu innovations which have been well
received by customers. In addition, app customers have nearly doubled, our
service times have significantly improved, and GPS technology was rolled out.
We also successfully launched and scaled nationally on Just Eat and Uber Eats.
The PGF will embed the new ways of working that have enabled the relationship
to go from strength to strength and ensures continuation of our mutual
achievements of the last three years.
2. Value for money
Giving customers compelling value for money is an essential part of our
customer proposition and key to maintaining the strength of our brand in the
UK & Ireland. We define 'value for money' as the quality of the product,
combined with the service and image, divided by price. In FY24 we partnered
with our franchise partners to offer a range of compelling offers throughout
the period with a combination of £8 / £10 / £12 deals for small, medium and
large pizzas as well as 50% off the app and 40% off the web deals. In April
2024 we launched our £4 lunch offer providing an incremental opportunity to
target different parts of the day and we have been pleased with the progress,
particularly in highlighting the value for money which Domino's offers
customers.
Our customer service stepped up again in FY24 with continued improvements
through the period. Average delivery times in FY24 were 24.5 minutes, half a
minute better than in FY23. Our franchise partners are benefiting from the
full roll out of our enhanced GPS solution to all stores in FY23 as well as
extensive national training programmes. GPS helps store teams optimise labour
costs through more efficient driver route planning and better co-ordination
with the store. It also enables customers to see exactly where their order is
and provides an accurate delivery time.
Offering new products to our customers is essential and we made excellent
progress, with our award-winning innovation team bringing excitement to
existing and new categories and occasions. Throughout the year we launched
several successful limited-edition pizzas, under our 'Ultimates' range which
offers customers the tastiest experience of global flavours or on trend
ingredients - Ultimate Carbonara and Lasagne, Ultimate Spicy Sausage with
Nduja, and Ultimate Korean BBQ Chicken were all successful, driving strong
levels of incremental sales. The return of our Festive pizza, combined with
the launch of Mac & Cheese, Hot Cheese Dip and Chocolate Dough balls with
Oreo gave us our most successful Festive campaign ever. We also saw success in
desserts with the Domino's Crème Egg cookie, which sold out in two weeks, and
our Double Chocolate Caramel cookie. Our innovation pipeline continues to
build under our outstanding innovation team, and we look forward to bringing
these great products to our customers.
3. Digital
Over 90% of Domino's sales are through digital channels and our app continues
to be the key driver of our digital growth strategy. App customers yield
higher sales and have a higher average order frequency than those who only use
the website. Orders placed on our app, as a percentage of total online orders,
were 76.3% in FY24, an increase of 2.7ppts vs. FY23 and the number of active
app customers was stable at c.9.5m.
The primary opportunity for DPG is increasing our customers' average order
frequency over time and increasing frequency is a key focus for FY25.
Currently, our customers order on average 4.3 times a year. With advancements
in our technology platform, we are now able to interact with our customers and
tailor offers in a far more targeted manner, leveraging our customer base in a
compelling way.
We have made good progress with our plan to introduce a loyalty programme for
our active customer base of c.13.5m. It is important that this is done in an
effective and profitable way. Our first trial in August 2024 with c.630k
customers performed ahead of our expectations, driving incremental orders, and
we are now moving to a second phase trial with c.3m customers, testing our
loyalty models across a wider range of cohorts and we continue to target a
full roll out in FY26.
4. Convenience
New store openings are a core driver of growth and we are clearly
under-penetrated compared to competitors in the UK and also other successful,
international Domino's systems.
At the start of FY24, we undertook a detailed review of the growth potential
in the UK & Ireland and identified opportunities across new territories as
well as splitting existing geographies. More importantly, our franchise
partners are hungry for growth and have exceptional second-generation talent
who want to grow their businesses. There is a significant opportunity to build
our scale further and we have targets to have in excess of 1,600 stores by
2028 and 2,000 stores by 2033 in the UK & Ireland.
In FY24 we opened 54 new stores with 21 different franchise partners. Whilst
we are still opening stores in new territories, we see particular opportunity
in smaller address count territories. These territories often have limited
competition, and our strong national brand is a significant competitive
advantage. The overall pipeline is strong for FY25 with 25 stores in
construction or planning approved. In a continued slow planning environment,
we expect to open in excess of 50 stores in FY25.
In January 2024 we started a trial on Uber Eats across UK & Ireland. The
data-led trial enabled customers to order Domino's Pizza via the Uber Eats
platform, but the pizzas are delivered by our own Domino's delivery drivers.
Following the successful trial which delivered incremental customers and
orders, we rolled out on Uber Eats on a permanent basis across UK &
Ireland in July 2024. Presence on Uber Eats complements our existing
partnership with Just Eat, with Uber Eats performing well in London, the South
and major city centre locations.
Capital allocation and additional growth opportunities
Domino's is a highly cash generative business and we have continued to apply
our four-point capital allocation framework, introduced in March 2021, to
deploy cash generated by the business.
Investment to drive growth in the core UK & Ireland business remains our
number one priority and we invested £18.5m in capital expenditure in FY24.
This included the development of our supply chain centre in Ireland and
investment in our digital and technology infrastructure.
In line with our commitment to pay a sustainable and progressive dividend, we
have declared a final dividend of 7.5p per share, giving a full-year dividend
of 11.0p per share an increase of 4.8% on the prior year.
Alongside investment in the core UK & Ireland business we have continued
to focus on optimising our portfolio to improve performance, returns and also
to invest in additional growth opportunities.
In FY24 we completed the disposal of our corporate stores in London to a
select number of new and existing medium-sized franchise partners for a total
consideration of £34.8m.
We also acquired full control of Shorecal in April, the largest Domino's
franchise business operating 34 stores in the Republic of Ireland and Northern
Ireland. The Republic of Ireland and Northern Ireland represent a significant
opportunity for us to accelerate growth as we are underpenetrated compared to
England, Scotland and Wales. We are well placed to drive growth in the region
with increased supply chain capacity in Naas following our recent investment.
In FY24 we started to unlock the growth in Ireland with a record year of new
store openings. 16 new stores opened in the Republic of Ireland and Northern
Ireland, double the previous record. Within Shorecal, we have delivered value
to customers through targeted promotions, including a compelling collection
offer at the end of FY24. There is no change to our capital light model and we
will look to refranchise Shorecal stores. We are now in an even stronger
position to accelerate our growth, open new stores, and provide great service
and great tasting products to our customers.
We completed a £11.4m investment in DP Poland plc ('DPP'), as part of a
broader fundraising by DPP, resulting in a 12.1% stake of DPP's issued share
capital. DPP is a high-performing business, operated by an experienced
management team, with significant growth potential.
In March 2025 we purchased an additional 24% of Victa DP Ltd, our joint
venture in Northern Ireland, bringing DPG's shareholding to 70%. Net cash
consideration of £25.6m was paid, £7.2m for the additional 24% equity and
net debt funding of £18.4m. This is consistent with our strategy of unlocking
growth in Northern Ireland and Republic of Ireland following the acquisition
of Shorecal and the investment in the Ireland supply chain centre.
We continue to explore target, accretive opportunities for a second brand,
where we can leverage the scale and capabilities of the Group and deliver
attractive returns to shareholders. We are focusing on opportunities which are
in line with our guardrails and which would be financed within our existing
balance sheet capacity. Our current pipeline is of a size that could be
financed from existing facilities enabling us to remain within our target
leverage range.
Operating within a normalised leverage range of 1.5x - 2.5x net debt to
Underlying EBITDA, we remain committed to returning any surplus cash to
shareholders. Net debt was £265.5m at December 2024, with leverage of 1.93x,
within our target range.
Finally, in August 2024 we announced a £20m share buyback which completed in
September 2024. Since 2021 we have announced nearly £500m of shareholder
returns, have increased dividends again in FY24 and remain committed to
returning excess capital in the future.
FY24 trading review
System sales represent all sales made by both franchised and corporate stores
to customers. Total system sales were £1,571.5m, up 2.0% on FY23. On a
comparable basis, FY24 like-for-like system sales across UK & Ireland were
up 0.7%, excluding split stores and the different VAT rate in Ireland. The
quarterly analysis of this performance is in the table below.
Q1 24 Q2 24 H1 24 Q3 24 Q4 24 H2 24 FY24
UK & ROI
Reported LFL exc. splits(1) and exc. VAT(2) (2.1)% (0.8)% (1.4)% +1.4% +2.8% +2.1% +0.3%
LFL exc. splits(1) and exc. VAT(2) on a comparable basis(3) (0.5)% (0.4)% (0.5)% +0.7% +3.0% +1.9% +0.7%
1. Like-for-like (excluding splits) system sales performance is
calculated for UK & Ireland against a comparable 52-week period in the
prior period for mature stores which were not in territories split in the
current period or comparable period. Mature stores are defined as those opened
prior to 26th December 2022.
2. In Ireland, the VAT rate for hot takeaway food reduced from 13.5%
to 9% on 1 November 2020 and reverted to 13.5% on 1 September 2023.
3. FY23 was a 53-week year, so the comparator weeks between FY23 and
FY24 are different. The comparable basis adjusts for this difference, by
comparing weeks 1-52 in FY24 with weeks 2-53 in FY23.
Total orders were up 1.7%. This was driven by a 2.4% growth in delivery orders
and 0.5% growth in collection orders. Delivery orders saw a meaningful
improvement quarter on quarter in FY24 and were up 7.9% in Q4. This was driven
by intense focus on customer service and improved delivery times from our
franchise partners combined with continued value in the channel. Collection
orders declined quarter on quarter in FY24 against tough comparator periods.
Collection orders were up 0.5%, remain well ahead of pre-Covid levels and we
still believe they have the potential to be c.50% of total orders in the long
term.
UK & Ireland Total (All Stores) Total (All Stores)
System Volume Price Orders (m) YOY Order Growth on a reported basis YOY Order Growth on a comparable basis
Sales
Total
Q1 (0.4)% (3.1)% +2.7% 17.7m (1.8)% (0.8)%
Q2 +0.7% (1.9)% +2.6% 17.4m +0.1% +0.6%
H1 +0.2% (2.5)% +2.7% 35.1m (0.9)% (0.1)%
Q3 +3.0% +0.9% +2.1% 17.4m +4.3% +3.5%
Q4 +4.5% +1.5% +3.0% 19.2m +4.2% +5.0%
H2 +3.8% +1.3% +2.5% 36.6m +4.3% +4.3%
FY +2.0% (0.7)% +2.7% 71.7m +1.7% +2.1%
Delivery only
Q1 (1.8)% (4.3)% +2.5% 11.5m (5.0)% (3.9)%
Q2 +0.9% (1.6)% +2.5% 11.1m 0.0% +1.1%
H1 (0.5)% (3.0)% +2.5% 22.6m (2.6)% (1.5)%
Q3 +5.0% +3.1% +1.9% 11.1m +7.1% +6.6%
Q4 +6.5% +3.8% +2.7% 12.6m +7.9% +8.0%
H2 +5.8% +3.5% +2.3% 23.7m +7.5% +7.3%
FY +2.6% +0.1% +2.5% 46.3m +2.4% +2.8%
Collection only
Q1 +4.5% +0.8% +3.7% 6.2m +4.7% +5.5%
Q2 +0.2% (2.6)% +2.8% 6.3m +0.2% (0.3)%
H1 +2.3% (0.9)% +3.2% 12.5m +2.4% +2.5%
Q3 (2.5)% (4.0)% +1.5% 6.3m (0.3)% (1.5)%
Q4 (1.7)% (4.3)% +2.8% 6.6m (2.2)% (0.3)%
H2 (2.1)% (4.2)% +2.1% 12.9m (1.3)% (0.9)%
FY 0.0% (2.7)% +2.7% 25.4m +0.5% +0.8%
Total orders represent the total amount of orders placed by customers with
Domino's. The table above shows total orders, also split by the delivery and
collection channel. Volume represents total orders, the amount of items in
each order and product mix within each order.
Delivering our sustainable future
In FY24, we made significant strides in our 'Connect the Dots' sustainability
journey at Domino's, achieving several firsts for the Group. We published our
inaugural sustainability report outlining our short to mid-term ambitions and
our FY23 progress; our first nutrition policy was developed, underpinning our
efforts to offer a more balanced range of choices to customers; we commenced a
trial of electric vehicles in our SCC delivery fleet, as part of our greener
fleet strategy; secured commitments from several large suppliers regarding
their respective efforts to reduce carbon emissions; developed a roadmap for
removing problem plastics from our system; issued improved communications to
customers regarding how to recycle their pizza boxes; and collected over £1m
in donations from colleagues and customers for our national charity partners.
FY24 also saw Domino's Pizza Group refocus its 'Connect the Dot's'
Sustainability programme to prioritise those areas we know our key audiences
see as the most important. Many of the 'Connect the Dots' initiatives will now
be absorbed into the business as part of day-to-day activities. In FY25, the
Sustainability function will focus on ensuring delivery on the highest
priority Environmental, Social and Governance ('ESG') items including carbon
reduction; offering more balanced menu options; and mitigating the risk of
modern slavery in our operations.
These accomplishments represent important progress in our ongoing commitment
to sustainability and achieving our corporate purpose of delivering a better
future through food people love. We look forward to providing a more detailed
update in our second Sustainability Report which will be published alongside
the Annual Report & Accounts in March 2025.
Financial review
The 2024 year comprised 52 weeks whereas the 2023 year comprised 53 weeks. In
this section, all figures are based on a 52-week versus 52-week basis unless
otherwise stated.
· Underlying EBITDA of £143.4m, an increase of £8.6m, which
includes £5.5m as a result of the acquisition of Shorecal in the period,
together with £4.5m reduction in technology platform costs.
· Underlying EBIT increased by £11.8m to £125.0m due to the
increased EBITDA and lower depreciation and amortisation from legacy IT
systems.
· Underlying profit before tax of £107.3m, an increase of £8.3m,
which includes net finance costs of £17.7m, an increase of £3.5m on the
previous year due to increased interest on the Group's debt facilities as a
result of higher average net debt.
· Underlying profit after tax of £80.3m, an increase of £6.6m on
the previous year. This includes taxation of £27.0m.
· Non-underlying profit after tax of £9.9m includes profit on
disposal of the London Corporate Stores of £21.4m, £5.0m income relating to
historical share-based payment schemes, £5.6m costs relating to the Shorecal
acquisition and £3.2m in terminated acquisition costs. These resulted in a
non-underlying tax charge of £7.7m.
· Statutory profit after tax was £90.2m, a decrease of £22.8m
from the previous year, largely due to the profit on disposal of the German
associate in FY 23.
· Free cash flow before non-underlying items decreased by £11.9m
to £97.0m, primarily due to increased interest and corporation tax payments
during the year as well as a working capital benefit in FY23.
· Capital allocation items of £116.8m includes capital expenditure
of £18.5m, distributions to shareholders of £67.9m, the acquisition of
Shorecal of £48.7m and the £11.4m investment in DP Poland, partially offset
by the £32.8m proceeds from the disposal of the London corporate stores.
· Overall net debt increased by £32.7m, resulting in a pre-IFRS 16
leverage ratio of 1.93x up from 1.77x in the previous year.
· Total dividend for FY24 of 11.0p per share, with final dividend
of 7.5p proposed to be paid on 7 May 2025 to shareholders on the register as
at 4 April 2025.
52 weeks ended 52 weeks ended 53 weeks ended
29 December 2024
24 December 2023
31 December 2023
£m
£m
£m
Reported Unaudited Reported
Group Revenue 664.5 667.0 679.8
Underlying EBITDA 143.4 134.8 138.1
Depreciation, amortisation and impairment (18.4) (21.6) (21.9)
Underlying EBIT 125.0 113.2 116.2
Underlying net finance costs (17.7) (14.2) (14.5)
Underlying profit before tax 107.3 99.0 101.7
Underlying tax charge (27.0) (25.3) (26.0)
Underlying profit after tax 80.3 73.7 75.7
Non-underlying items 9.9 39.3 39.3
Statutory profit after tax 90.2 113.0 115.0
Reported Revenue
Our key metric for measuring the revenue performance of the Group is system
sales, rather than our Group revenue. System sales are the total sales to end
customers through our network of stores, for both franchise partners and
corporate stores. Our Group revenue consists of food and non-food sales to
franchise partners, royalties paid by franchise partners, contributions into
the National Advertising Fund ('NAF') and ecommerce funds, rental income and
end-customer sales in our corporate stores.
Within our Group revenue, the volatility of food wholesale prices, together
with the combination of different revenue items, means that analysis of margin
generated by the Group is less comparable than an analysis based on system
sales. We consider that system sales provide a useful alternative analysis
over time of the health and growth of the business.
Reported system sales in the period were £1,571.5m, up 2.0% from FY23 as
described in the strategic report.
The table below shows the Group's reported revenue:
52 weeks ended 52 weeks ended 53 weeks ended
29 December 2024
24 December 2023
31 December 2023
£m
£m
£m
Reported Unaudited Reported
Supply chain revenue 443.7 470.7 479.1
Royalty, rental & other revenue 83.3 83.5 85.6
Corporate stores revenue 53.2 32.5 33.1
NAF & ecommerce 84.3 80.3 82.0
Total 664.5 667.0 679.8
Reported revenue decreased by £2.5m to £664.5m, primarily driven by a
decrease in supply chain revenue due to reduction in food costs, which are
passed through to our franchise partners.
Royalty, rental and other revenues primarily relate to the royalty revenue we
receive from our franchise partners based on a percentage of system sales and
rental income.
Revenue for our directly operated corporate stores increased by £20.7m due to
the acquisition of Shorecal on 10 April 2024. This was partially offset by the
decrease in revenue from the London Corporate stores, which were disposed of
mid-year. NAF and ecommerce revenue was up £4.0m due to increased spend in
the period, as revenue is recognised based on costs incurred at nil profit.
Underlying EBITDA
The Group generated an underlying EBITDA of £143.4m, an increase of £8.6m on
the previous year. This includes an EBITDA benefit of £5.5m relating to the
acquisition of Shorecal during the year and a £4.5m reduction in technology
platform costs, which are discussed further below. This was offset by the
profit of £2.3m recognised in FY23 relating to a sale of freehold property.
Excluding these items, underlying EBITDA remained relatively stable and
increased by £0.9m.
EBITDA from royalties increased by £0.9m as a result of increased system
sales in the period, together with increased contribution from investments of
£1.4m, which is largely driven by our Northern Ireland Joint Venture, and
£1.1m of cost savings. This was offset by reductions in our supply chain
EBITDA of £2.6m, as reduced revenue due to lower food costs was offset by
£1.8m decrease in head office costs.
Interest
Net underlying finance costs in the period were £17.7m, which includes
interest on net debt of £16.6m and net lease interest payable of £1.1m.
Interest on debt facilities of £16.6m increased by £3.2m on the previous
year, due to increased average net debt following the Shorecal acquisition as
outlined in the cash flow section below.
During the period, the Group increased its debt facilities with an additional
£100m in Private Placement Loan Notes due in 2034 at a fixed rate of 5.97%,
this largely replaced the Group's variable rate borrowings. The Group now has
combined debt facilities available of £500m (FY23: £400m).
Taxation
The underlying effective tax rate for 2024 was 25.2% (FY23: 25.6%). The
decrease in the effective tax rate is due to a one-off adjustment made in the
prior year to reflect historical services provided between our UK and Irish
subsidiary.
Underlying profit after tax increased to £80.3m driven by an increased
underlying EBIT offset by higher net finance costs and taxation outlined
above.
Non-underlying items
Non-underlying profit after tax of £9.9m includes a £21.4m profit on
disposal of the London Corporate stores, as well as net reversionary income of
£5.0m relating to amounts receivable from the beneficiaries of the historical
share-based payment scheme.
Terminated acquisition costs of £3.2m were incurred which relate to legal and
advisory fees on an acquisition that did not complete.
Legal and advisory costs of £2.3m were incurred on the acquisition of
Shorecal. An amortisation charge of £3.3m was incurred on reacquired rights
recognised upon the acquisition of Shorecal.
A tax charge of £7.7m was incurred on the above non-underlying items.
In FY23 non-underlying items of £39.3m included the profit on disposal of the
Group's investment in the German associate of £40.6m and a tax charge of
£1.3m on the historical share-based payment scheme.
Statutory profit after tax and earnings per share
Statutory profit after tax was £90.2m, a decrease of £22.8m from the
previous year.
Statutory EPS decreased to 22.9p from 28.0p, largely due to the profit on
disposal of the German associate in FY23.
Underlying basic EPS increased to 20.4p as a result of higher underlying
profit after tax as well as a lower number of weighted average shares due to
the share buyback programme, which more than offset the share issuance in
relation to the Shorecal acquisition.
Technology platform costs
FY24 EBITDA Amortisation and impairment Profit Capital expenditure £m
£m
£m
before
tax
£m
ERP (4.4) - (4.4) -
eCommerce platform - (1.4) (1.4) -
Total (4.4) (1.4) (5.8) -
FY23 EBITDA Amortisation and impairment Profit Capital expenditure £m
£m
£m
before
tax
£m
ERP (6.4) (1.4) (7.8) -
eCommerce platform (2.5) (0.5) (3.0) (5.7)
Total (8.9) (1.9) (10.8) (5.7)
During the year, we continued to develop and implement the new cloud-based ERP
system, which enables us to capture growth in future and drive efficiencies.
There has been a successful deployment of the ERP across our head office
function and the Cambuslang supply chain centre, the remaining SCCs are
expected to go live and be operational by H2 25.
Within EBITDA, costs of £4.4m have been recognised which relate to the ERP.
These represent costs spent on development of these assets, which are expensed
through the income statement rather than capitalised as intangible assets, as
they relate to cloud platforms. This represents the full spend on the project
in the year to date.
Amortisation of £1.4m was incurred on the ecommerce platform.
Free cash flow and Net debt
52 weeks ended 53 weeks ended
29 December 2024
31 December 2023
£m
£m*
Underlying EBITDA 143.4 138.1
Add back non-cash items
- Contribution of investments (3.3) (2.0)
- Other non-cash items 3.8 1.9
Working capital (1.6) 10.2
IFRS 16 - net lease payments (5.6) (6.3)
Dividends received 2.6 3.0
Net interest (15.7) (13.1)
Corporation tax (26.6) (22.9)
Free cash flow before non-underlying cash items 97.0 108.9
Non-underlying cash (12.3) (11.9)
Free cash flow 84.7 97.0
Capex (18.5) (20.8)
Funding to investments (3.9) -
Repayment from German associate - 9.3
Acquisitions and disposals (27.0) 70.6
Disposal of property, plant and equipment 0.5 4.4
Dividends (42.0) (41.9)
Share transactions - Buybacks (26.3) (93.3)
Share transactions - EBT share disposals/(purchases) 0.4 (4.5)
Total capital allocation items (116.8) (76.2)
Movement in net debt (32.1) 20.8
Opening net debt (232.8) (253.3)
Movement in capitalised facility arrangement fee (0.6) (0.6)
Forex on net debt - 0.3
Closing net debt (265.5) (232.8)
Last 12 months net debt/Underlying EBITDA ratio (excl. IFRS 16) 1.93x 1.77x
* The 2024 year comprised 52 weeks whereas the 2023 year comprised 53 weeks.
The 2024 year includes EBITDA for 52 weeks whilst 2023 includes EBITDA for 53
weeks.
Net debt increased by £32.7m with a free cash flow before non-underlying of
£97.0m, non-underlying outflow £12.3m and capital allocation items outflow
of £116.8m.
Free cash flow
Free cash flow before non-underlying items was £97.0m, a decrease of £11.9m
on the previous year. Underlying EBITDA was £143.4m, an increase of £5.3m as
outlined above.
There was a working capital outflow of £1.6m (FY23: inflow of £10.2m) during
the period, largely as a result of a decrease in accruals of £4.3m offset by
a decrease in inventory by £2.3m.
Net IFRS 16 lease payments decreased by £0.7m to £5.6m following the
disposal of the corporate stores. Dividends received of £2.6m include £2.5m
from our associates and joint ventures and £0.1m from our investment in
Shorecal prior to the acquisition in April 2024.
Net interest payments of £15.7m increased from £13.1m as a result of
increased net debt.
Non-underlying payments of £12.3m were made during the year, which includes
corporation tax payments of £8.5m incurred on the disposal of the London
Corporate stores and £2.3m related to transaction costs on the acquisition of
Shorecal.
Capital allocation items
Capital allocation items increased by £40.6m to £116.8m.
Capital expenditure of £18.5m includes £2.5m relating to our supply chain
centre in Ireland, which was completed during the year, £3.8m relating to
automation across the Group's supply chain centres and £5.6m relating to
total investment in digital and ecommerce development.
Funding to investments of £3.9m relates to funding provided to the Group's
investment in Victa DP ltd, where additional funding was provided for working
capital and support of growth plans.
Acquisitions and disposals cash outflow of £27.0m includes the cash
consideration of £48.7m for the acquisition of Shorecal, £11.4m acquisition
of a 12% investment in DP Poland plc offset by £32.8m proceeds received on
the disposal of the London corporate stores.
In FY23, the Group received £79.9m for the disposal of the German associate,
of which £70.6m related to the disposal of the investment and £9.3m related
to the repayment of a loan.
Dividends paid of £42.0m includes £28.1m relating to the final FY23 dividend
paid in May 2024 and the interim dividend of £13.9m which was paid in
September 2024.
Share buybacks of £26.3m include the remaining £6.1m outstanding balance of
the £70m share buyback programme announced in August 2023 as well as the
£20m share buyback announced in August 2024.
Capital employed and balance sheet
At 29 December At 31 December 2023
£m
2024
£m
Intangible assets 98.1 28.8
Property, plant and equipment 103.5 97.6
Investments, associates and joint ventures 37.5 35.5
Deferred consideration 2.0 0.3
Right-of-use assets 20.8 19.3
Net lease liabilities (23.0) (21.6)
Provisions (5.7) (3.8)
Working capital (40.3) (44.9)
Net debt (265.5) (232.8)
Tax (9.6) (6.3)
Share buyback obligations - (6.1)
Net liabilities (82.2) (134.0)
Intangible assets increased by £69.3m to £98.1m. The primary movement
relates to the addition of £87.1m of goodwill and intangibles relating to the
Shorecal acquisition. Goodwill of £11.7m was disposed of as part of the
London Corporate stores disposal.
Property, plant and equipment increased by £5.9m to £103.5m, which include
additions of £12.6m and £2.9m acquired through the acquisition of Shorecal.
This was offset by £6.7m in depreciation as well as the disposal of £2.1m as
a result of the London Corporate stores disposal.
Additions of £12.6m include £2.5m relating to our supply chain centre in
Ireland, which was completed during the year, and £3.8m relating to
automation across the supply chain centres. £2.2m was incurred in the opening
of new corporate stores.
Investments, associates and joint ventures increased by £2.0m, as the
acquisition of the 12% share in DP Poland of £11.4m was largely offset with
the derecognition of the Shorecal investment of £10.0m.
Deferred consideration of £2.0m relates to amounts owed to the Group
following our disposal of the London Corporate Stores during the year. This is
expected to be received in 2026.
Right-of-use assets of £20.8m represent the lease assets for our corporate
stores both in the UK and Ireland, warehouses and equipment leases recognised
under IFRS 16 in the current period. The net lease liability is £23.0m. The
lease portfolio has increased as a result of the acquisition of Shorecal which
has been partially offset by the disposal of the London Corporate stores.
The net working capital liability has decreased from £44.9m to £40.3m as a
result of the factors outlined in the cash flow section above.
Total equity has increased by £51.8m, to a net liability position of £82.2m,
largely due to the profit after tax generated of £90.2m and the share premium
recognised on the Shorecal acquisition share issue of £22.3m. These were
offset by dividend payments of £42.0m and share buybacks of £26.3m incurred
during the year.
There are sufficient distributable reserves in the standalone accounts of
Domino's Pizza Group plc for the proposed dividend payment.
Treasury management
The Group holds £500m in debt facilities, of which £200m relates to an
unsecured multi-currency revolving credit facility and £300m relates to US
Private placement loan notes. The revolving credit facility expires in July
2027, and of the US Private Placement loan notes, £200m mature in July 2027
and £100m mature in June 2034.
During the current year the Group entered into new £100m sterling-denominated
US Private Placement Loan notes that mature on 20 June 2034. The loans notes
incur interest at a fixed rate of 5.97% which is payable every 6 months. The
financial covenants under the new arrangement are in line with the current
debt facilities as shown below.
The £200m private placement loan notes incur interest at a fixed rate at
4.26%. Interest is paid every six months.
The unsecured multi-currency revolving credit facility incurs interest at a
margin over SONIA of between 185bps and 285bps depending on leverage, plus a
utilisation fee of between 0bps and 30bps of the aggregate amount of the
outstanding loans. The total undrawn facility as at 29 December 2024 was
£180.0m.
The financial covenants under all financing agreements are consistent. These
covenants relate to measurement of adjusted EBITDAR against consolidated net
finance charges (interest cover) and adjusted EBITDA to net debt (leverage
ratio) measured semi-annually on a trailing 12-month basis at half year and
year end. The interest cover covenant under the terms of both agreements
cannot be less than 1.5:1, and leverage ratio cannot be more than 3:1. Figures
used in the calculation of both covenants exclude the impact of IFRS 16.
As at 29 December 2024 the Group has Net debt of £265.5m, and the last 12
months Net debt/EBITDA ratio excluding the impact of IFRS 16 increase to 1.93x
from 1.77x, largely as a result of the initial cash outflow on the acquisition
of Shorecal.
Underpinning treasury management is a robust Treasury Policy and Strategy that
aims to minimise financial risk. Foreign exchange movement arising from
transactional activity is reduced by either agreeing fixed currency rates with
suppliers or pre-purchasing the currency spend.
Group income statement
52 weeks ended 29 December 2024
Note 52 weeks ended 29 December 2024 53 weeks ended 31 December 2023
£m
£m
Underlying Non-underlying* Total Underlying Non-underlying* Total
Revenue 3 664.5 - 664.5 679.8 - 679.8
Cost of sales (345.6) - (345.6) (363.6) - (363.6)
Gross profit 318.9 - 318.9 316.2 - 316.2
Distribution costs (42.4) - (42.4) (42.6) - (42.6)
Administrative costs (155.3) (8.8) (164.1) (161.7) - (161.7)
Share of post-tax profits of associates and joint ventures 3.3 - 3.3 2.0 - 2.0
Other income 0.5 26.4 26.9 2.3 40.6 42.9
Profit before interest and taxation 125.0 17.6 142.6 116.2 40.6 156.8
Finance income 6 14.0 - 14.0 13.7 - 13.7
Finance costs 7 (31.7) - (31.7) (28.2) - (28.2)
Profit before taxation 107.3 17.6 124.9 101.7 40.6 142.3
Taxation 8 (27.0) (7.7) (34.7) (26.0) (1.3) (27.3)
Profit for the period 80.3 9.9 90.2 75.7 39.3 115.0
Earnings per share
- Basic (pence) 9 20.4 22.9 18.4 28.0
- Diluted (pence) 9 20.3 22.8 18.4 27.9
*Non-underlying items are disclosed in note 4
Group statement of comprehensive income
52 weeks ended 29 December 2024
Note 52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Profit for the period 90.2 115.0
Other comprehensive income/(expense):
Items that will not subsequently be reclassified to profit or loss
- Gain on investment held through other comprehensive income 17 0.1 -
Items that may be subsequently reclassified to profit or loss
- Exchange loss on retranslation of foreign operations (3.1) (0.6)
- Transferred to income statement on disposal 16 - (2.5)
Other comprehensive expense for the period, net of tax (3.0) (3.1)
Total comprehensive income for the period 87.2 111.9
Group balance sheet
At 29 December 2024
Note
At 29 December At 31 December
2024 2023
£m £m
Non-current assets
Intangible assets 11 98.1 28.8
Property, plant and equipment 103.5 97.6
Right-of-use assets 12 20.8 19.3
Lease receivables 12 189.5 192.9
Trade and other receivables 9.1 3.7
Investments 17 11.5 10.3
Investments in associates and joint ventures 13 26.0 25.2
Deferred consideration receivable 16 2.0 -
460.5 377.8
Current assets
Lease receivables 12 17.2 15.8
Inventories 9.2 11.4
Trade and other receivables 60.3 51.6
Deferred consideration receivable - 0.3
Current tax assets 3.5 3.5
Cash and cash equivalents 21 52.2 52.1
142.4 134.7
Total assets 602.9 512.5
Current liabilities
Lease liabilities 12 (22.3) (21.1)
Trade and other payables (118.4) (111.4)
Current tax liabilities (1.4) (2.8)
Provisions (3.0) (2.0)
Financial liabilities - share buyback obligation - (6.1)
(145.1) (143.4)
Non-current liabilities
Lease liabilities 12 (207.4) (209.2)
Trade and other payables (0.5) (0.2)
Financial liabilities 14 (317.7) (284.9)
Deferred tax liabilities (11.7) (7.0)
Provisions (2.7) (1.8)
(540.0) (503.1)
Total liabilities (685.1) (646.5)
Net liabilities (82.2) (134.0)
Shareholders' equity
Called up share capital 2.1 2.1
Share premium account 71.9 49.6
Capital redemption reserve 0.5 0.5
Capital reserve - own shares (10.3) (12.5)
Currency translation reserve (5.7) (2.6)
Other reserve 0.1 -
Accumulated losses (140.8) (171.1)
Total equity (82.2) (134.0)
Group statement of changes in equity
52 weeks ended 29 December 2024
Note Capital
Share Capital Reserve Currency Total
Share premium redemption - own translation Other reserve Accumulated shareholders'
capital account reserve shares reserve £m losses equity
£m £m £m £m £m £m £m
At 25 December 2022 2.2 49.6 0.5 (9.0) 0.5 - (156.6) (112.8)
Profit for the period - - - - - - 115.0 115.0
Other comprehensive expense
- exchange differences - - - - (0.6) - - (0.6)
- transferred to income statement on disposal - - - - (2.5) - - (2.5)
Total comprehensive income for the period - - - - (3.1) - 115.0 111.9
Proceeds from share issues - - - 0.5 - - - 0.5
Impairment of share issues* - - - 1.0 - - (1.0) -
Share buybacks (0.1) - - (5.0) - - (93.2) (98.3)
Share buyback obligation satisfied - - - - - - 8.9 8.9
Share buyback obligations outstanding - - - - - - (6.1) (6.1)
Share options and LTIP charge 18 - - - - - - 3.8 3.8
Tax on employee share options - - - - - - - -
Equity dividends paid 10 - - - - - - (41.9) (41.9)
At 31 December 2023 2.1 49.6 0.5 (12.5) (2.6) - (171.1) (134.0)
Profit for the period - - - - - - 90.2 90.2
Other comprehensive income/(expense)
- gain on investments - - - - - 0.1 - 0.1
- exchange differences - - - - (3.1) - - (3.1)
Total comprehensive income/(expense) for the period - - - - (3.1) 0.1 90.2 87.2
Proceeds from share issues - - - 0.4 - - - 0.4
Share issued on acquisition of subsidiaries 15 - 22.3 - - - - - 22.3
Impairment of share issues* - - - 1.8 - - (1.8) -
Share buybacks - - - - - - (26.3) (26.3)
Share buyback obligations satisfied - - - - - - 6.1 6.1
Share options and LTIP charge 18 - - - - - - 4.0 4.0
Tax on employee share options - - - - - - 0.1 0.1
Equity dividends paid 10 - - - - - - (42.0) (42.0)
At 29 December 2024 2.1 71.9 0.5 (10.3) (5.7) 0.1 (140.8) (82.2)
*Impairment of share issues represents the difference between share allotments
made pursuant to the Sharesave schemes and the Long-Term Incentive Plan, and
the original cost at which the shares were acquired as treasury shares into
Capital reserve - own shares
Group cash flow statement
52 weeks ended 29 December 2024
Note 52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Cash flows from operating activities
Profit before interest and taxation 142.6 156.8
Amortisation and depreciation 3 21.7 21.9
Share of post-tax profits of associates and joint ventures 13 (3.3) (2.0)
Profit on disposal of property, plant and equipment (0.2) (2.3)
Profit on disposal of subsidiary 16 (21.9) -
Profit on disposal of associate investment 16 - (40.6)
Share option and LTIP charge 18 4.0 3.8
Decrease in provisions (1.1) (11.4)
Decrease in inventories 2.2 0.2
Increase in receivables (8.2) (5.2)
Increase in payables 2.8 15.2
Cash generated from operations 138.6 136.4
Corporation tax paid (35.1) (22.9)
Net cash generated by operating activities 103.5 113.5
Cash flows from investing activities
Purchase of property, plant and equipment (11.6) (9.8)
Purchase of intangible assets 11 (6.9) (11.0)
Proceeds from sale of property, plant and equipment 0.5 4.4
Net consideration received on disposal of subsidiaries 0.2 -
Proceeds from sale of trade and assets 16 32.8 -
Consideration received on disposal of associate investment 16 - 70.6
Purchase of investments (11.4) -
Acquisition of subsidiaries, net of cash received 15 (32.5) -
Receipt of principal element on lease receivables 16.2 15.0
Receipt of interest element on lease receivables 13.0 12.6
Interest received 0.8 0.6
Other 21 (1.3) 12.3
Net cash (used)/generated by investing activities (0.2) 94.7
Cash inflow before financing 103.3 208.2
Cash flows from financing activities
Interest paid (16.5) (13.7)
Share purchases 21 (26.3) (98.3)
Consideration received on exercise of share options - employee benefit trust 0.4 0.5
New bank loans and facilities drawn down 323.1 113.0
Facility arrangement fees paid (0.7) -
Repayment of borrowings (306.2) (112.2)
Repayment of principal element on lease liabilities (20.7) (20.1)
Repayment of interest element on lease liabilities (14.1) (13.8)
Equity dividends paid 10 (42.0) (41.9)
Net cash used by financing activities (103.0) (186.5)
Net (decrease)/increase in cash and cash equivalents 0.3 21.7
Cash and cash equivalents at beginning of period 52.1 30.4
Foreign exchange loss on cash and cash equivalents (0.2) -
Cash and cash equivalents at end of period 21 52.2 52.1
Notes to the Group financial statements
52 weeks ended 29 December 2024
1. General information
Domino's Pizza Group plc ('the Company') is a public limited company
incorporated in the United Kingdom under the Companies Act 2006 (registration
number 03853545). The Company is domiciled in the United Kingdom and its
registered address is 1 Thornbury, West Ashland, Milton Keynes, MK6 4BB. The
Company's ordinary shares are listed on the Official List of the FCA and
traded on the Main Market of the London Stock Exchange. Further copies of the
Annual Report and Accounts may be obtained from the address above.
2. Basis of preparation
The financial information set out in this document does not constitute
statutory accounts for Domino's Pizza Group plc for the period ended 29
December 2024, but is extracted from the 2024 Annual Report.
The Annual Report for 2024 will be delivered to the Registrar of Companies in
due course. The auditors' report on those accounts was unqualified and neither
drew attention to any matters by way of emphasis nor contained a statement
under either Section 498(2) of Companies Act 2006 (accounting records or
returns inadequate or accounts not agreeing with records and returns), or
section 498(3) of Companies Act 2006 (failure to obtain necessary information
and explanations).
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted in the UK, as
they apply to the financial statements of the Group for the 52 week period
ended 29 December 2024, and applied in accordance with the Companies Act 2006.
The Group financial statements are presented in sterling and are prepared
using the historical cost basis with the exception of other financial assets,
investments held at fair value through profit or loss and contingent
consideration which are measured at fair value in accordance with IFRS 13 Fair
Value Measurement.
Going concern
The Group financial statements have been prepared on a going concern basis as
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
The Group operates the Domino's brand in the UK and Ireland. A Master
Franchise Agreement is in place with Domino's Pizza International Inc. The
Group remains in material compliance with requirements and targets under this
agreement.
For the purposes of going concern, the Directors of the Group have assessed
the overall position and future forecasts for the period up to June 2026.
These cash flow forecasts are consistent with those included in the Group's
viability assessment.
The overall performance of the Group has been strong throughout the year in
the UK and Ireland, with continued system sales growth and order growth. Sales
growth is primarily driven by increases in food costs which have been passed
through to our franchisees. Benefits from sales growth have been offset with
interest charges due to higher average net debt following the Shorecal
acquisition.
In line with the capital distribution policy, the Group has distributed excess
cash to shareholders during the period. The Group's net liability position on
a consolidated basis decreased from £134.0m to £82.2m.
The Directors of the Group have considered the future position based on
current trading and a number of potential downside scenarios which may occur,
either through reduced consumer spending, reduced store growth, supply chain
disruptions, general economic uncertainty and other risks, in line with the
analysis performed for the viability statement.
This assessment has considered the overall level of Group borrowings and
covenant requirements, the flexibility of the Group to react to changing
market conditions and ability to appropriately manage any business risks.
The Group has net debt of £265.5m and has committed debt facilities of £500m
which include Sterling denominated private placement loan notes of £300m and
an unsecured multi-currency revolving credit facility of £200m. The revolving
credit facility expires in July 2027, and of the US Private Placement loan
notes, £200m mature in July 2027 and £100m mature in June 2034.
During the current year the Group entered into new £100m sterling denominated
US Private Placement Loan notes that mature on 20 June 2034. The loans notes
incur interest at a fixed rate of 5.97%, which is payable every 6 months. The
financial covenants under the new arrangement are in line with the current
debt facilities as shown below.
The Group has a net debt position of £265.5m. The facility has leverage and
interest cover covenants, with which the Group have complied with. The
scenarios modelled are based on our current forecast projections, including
any acquisitions and disposals where cash inflows or outflows are certain. In
the first scenario we have taken account of the following risks:
- A downside impact of economic uncertainty and other
sales-related risks over the forecast period, reflected in sales performance,
with a c.5.0% reduction in LFL system sales compared to budget.
- The impact of a reduction of new store openings to half of their
forecast level.
- A further reduction of between 2.5%-3.0% in sales to account for
the potential impact of the public health debate.
- Future potential disruptions to supply chain through loss of one
of our supply chain centres impacting our ability to supply stores for a
period of two weeks.
- The impact of a temporary loss of availability of our eCommerce
platform for 24 hours during peak trading periods.
- A significant unexpected increase in the impact of climate
change on our delivery costs.
We have also considered a second 'severe but plausible' scenario, which in
addition to the above-mentioned risks, also includes the risks of:
- A disruption to one of our key suppliers impacting our supply
chain over a period of four weeks whilst alternative sourcing is secured.
- The impact of fines from a potential data breach in 2026.
In each of the scenarios modelled, there remains significant headroom on the
debt facilities. Under the first scenario, there remains sufficient headroom
under the covenant requirements of the facility.
If all the risks under the first scenario were to occur simultaneously with
the additional risks in the second scenario, before any mitigating actions,
the Group would breach its leverage covenants. The Board has significant
mitigating actions available in the form of delays of distributions to
shareholders which would prevent a breach of leverage covenants.
Based on this assessment, the Directors have formed a judgement that there is
a reasonable expectation the Group will have adequate resources to continue in
operational existence for the foreseeable future.
Reverse stress testing has been performed separately based on our main
profitability driver, system sales, which is a materially worse scenario than
the combinations described in the scenarios above. This test concluded that
the Group's currently agreed covenants could only be breached if a highly
unlikely combination of scenarios resulted in a material annual reduction in
system sales greater than 23%, which is not considered plausible.
Accounting policies and new standards
The accounting policies applied by the Group are consistent with those
disclosed in the Group's Annual Report. These policies are consistent with the
Accounts for the 53 weeks ended 31 December 2023, except for new standards and
interpretations effective for the first time for the reporting period.
3. Segmental information
For management purposes, the Group has been organised into two geographic
business units based on the operating models of the regions; the UK &
Ireland operating more mature markets with a franchise model, limited
corporate stores and investments held in our franchisees, compared to
International which operated predominantly as corporate stores. The
International segment included the German associate, legacy Germany and
Switzerland holding companies.
These are considered the Group's operating segments as the information
provided to the Executive Directors of the Board, who are considered to be the
chief operating decision makers, is based on these territories. The chief
operating decision makers review the segmental underlying EBIT and EBITDA
results and the non-underlying items separately. Revenue included in each
segment includes all sales made to franchise stores (royalties, sales to
franchisees and rental income) and by corporate stores located in that
segment.
Following the announcement of the growth framework in 2023, the Group's
operating segments continue to be reviewed and will be updated if there are
any changes in the structure of information provided to the Executive
Directors.
Unallocated assets include cash and cash equivalents and taxation assets.
Unallocated liabilities include the bank revolving facility and taxation
liabilities.
At 29 December 2024 At 31 December
£m 2023
£m
Current tax assets 3.5 3.5
Cash and cash equivalents 52.2 52.1
Unallocated assets 55.7 55.6
Current tax liabilities 1.4 2.8
Deferred tax liabilities 11.7 7.0
Debt facilities 317.7 284.9
Unallocated liabilities 330.8 294.7
Segment assets and liabilities
At 29 December 2024 At 31 December 2023
UK & Ireland International Total UK & Ireland International Total
£m
£m
£m
£m
£m £m
Segment assets
Segment current assets 86.7 - 86.7 79.1 - 79.1
Segment non-current assets 423.0 - 423.0 342.3 - 342.3
Investment in associates and joint ventures 26.0 - 26.0 25.2 - 25.2
Investments 11.5 - 11.5 10.3 - 10.3
Unallocated assets 55.7 55.6
Total assets 602.9 512.5
Segment liabilities
Liabilities 354.3 - 354.3 351.8 - 351.8
Unallocated liabilities 330.8 294.7
Total liabilities 685.1 646.5
Segmental performance 2024
UK & Ireland International Total underlying Non-underlying Total reported
£m
£m
£m
£m
£m
Revenue
Sales to external customers 664.5 - 664.5 - 664.5
Segment revenue 664.5 - 664.5 - 664.5
Results
Underlying result before associates and joint ventures 121.2 - 121.2 - 121.2
Share of profit of associates and joint ventures 3.3 - 3.3 - 3.3
Other non-underlying items - - - (8.8) (8.8)
Other income 0.5 - 0.5 26.4 26.9
Profit before interest and taxation 125.0 - 125.0 17.6 142.6
Net finance costs (17.7) - (17.7) - (17.7)
Profit before taxation 107.3 - 107.3 17.6 124.9
Taxation (27.0) - (27.0) (7.7) (34.7)
Profit for the year 80.3 - 80.3 9.9 90.2
Effective tax rate 25.2% - 25.2% - 27.8%
Other segment information
Depreciation 11.5 - 11.5 - 11.5
Amortisation 6.9 - 6.9 3.3 10.2
Total depreciation and amortisation 18.4 - 18.4 3.3 21.7
EBITDA 143.4 - 143.4 20.9 164.3
Underlying EBITDA 143.4 - 143.4 - 143.4
Capital expenditure 18.5 - 18.5 - 18.5
Share-based payment charge 4.0 - 4.0 - 4.0
Revenue disclosures
Royalties, franchise fees and change of hands fees 81.4 - 81.4 - 81.4
Sales to franchisees 443.7 - 443.7 - 443.7
Corporate store income 53.2 - 53.2 - 53.2
Rental income on leasehold and freehold property 1.9 - 1.9 - 1.9
National Advertising and eCommerce income 84.3 - 84.3 - 84.3
Total segment revenue 664.5 - 664.5 - 664.5
Major customers and revenue by origin
Revenue from two franchisees individually totalled £121.8m (2023: £128.7m)
and £118.4m (2023: £125.7m), within sales reported in the UK & Ireland
segment.
Analysed by origin, revenue was £613.4m (2023: £640.8m) in the UK and
£51.1m (2023: £39.0m) in Ireland.
The total of non-current assets other than financial instruments and deferred
tax assets, broken down by location of the assets is as follows: £151.1m
(2023: £156.8m) in the UK and £96.5m (2023: £14.1m) in the Republic of
Ireland.
Segmental performance 2023
UK & Ireland International Total underlying Non-underlying Total reported
£m
£m
£m
£m
£m
Revenue
Sales to external customers 679.8 - 679.8 - 679.8
Segment revenue 679.8 - 679.8 - 679.8
Results
Underlying result before associates and joint ventures 111.9 - 111.9 - 111.9
Share of profit of associates and joint ventures 2.0 - 2.0 - 2.0
Other income 2.3 - 2.3 40.6 42.9
Profit before interest and taxation 116.2 - 116.2 40.6 156.8
Net finance costs (14.5) - (14.5) - (14.5)
Profit before taxation 101.7 - 101.7 40.6 142.3
Taxation (26.0) - (26.0) (1.3) (27.3)
Profit for the year 75.7 - 75.7 39.3 115.0
Effective tax rate 25.6% - 25.6% - 19.2%
Other segment information
Depreciation 11.2 - 11.2 - 11.2
Amortisation 10.7 - 10.7 - 10.7
Total depreciation and amortisation 21.9 - 21.9 - 21.9
EBITDA 138.1 - 138.1 40.6 178.7
Underlying EBITDA 138.1 - 138.1 - 138.1
Capital expenditure 20.8 - 20.8 - 20.8
Share-based payment charge 3.8 - 3.8 - 3.8
Revenue disclosures
Royalties, franchise fees and change of hands fees 83.4 - 83.4 - 83.4
Sales to franchisees 479.1 - 479.1 - 479.1
Corporate store income 33.1 - 33.1 - 33.1
Rental income on leasehold and freehold property 2.2 - 2.2 - 2.2
National Advertising and eCommerce income 82.0 - 82.0 - 82.0
Total segment revenue 679.8 - 679.8 - 679.8
4. Reconciliation of non-GAAP measures
Non-underlying items included in the financial statements
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Underlying profit for the period 80.3 75.7
Non-underlying profit for the period 9.9 39.3
Profit for the period 90.2 115.0
Non-underlying items
52 weeks ended 53 weeks ended
29 December 2024 31 December
Note £m 2023
£m
Included in administrative costs
- Shorecal acquisition costs a) (2.3) -
- Reacquired rights amortization b) (3.3) -
- Terminated acquisition costs c) (3.2) -
(8.8) -
Included in other income
- Profit on disposal of corporate stores d) 21.4 -
- Reversionary scheme, net of costs e) 5.0 -
- Profit on disposal of German associate f) - 40.6
26.4 40.6
Included in profit before taxation 17.6 40.6
- Taxation g) (7.7) (1.3)
Included in profit for the period 9.9 39.3
a) Shorecal Limited acquisition costs
The Group incurred legal and advisory costs of £2.3m associated with the
acquisition of Shorecal Limited. For further details on the acquisition refer
to note 15. These costs are recognised in non-underlying as they relate
directly to the acquisition and are significant enough to distort the
underlying performance of the Group.
b) Reacquired rights amortisation
The Group incurred a charge of £3.3m in relation to the amortisation of
reacquired rights recognised upon the acquisition of Shorecal Limited. This
relates to the valuation of the Standard Franchise Agreements which were in
place before the acquisition, previously issued by the Group to Shorecal
Limited when this was an independently controlled franchisee. These are
amortised over the remaining life of the franchise agreements, which is on
average 5 years.
The amortisation is recognised in non-underlying results as we consider the
recognition of the asset and amortisation period does not represent the
substance of the agreements. As these are reacquired rights, under the
accounting standard these must be amortised over the remaining period of the
agreement considering renewal options, which is not consistent with the
substance of the asset. The Group recognised no significant profit on initial
issuance of the franchise agreements before acquisition and will not incur any
cost to renew at the end of the term. We therefore consider the amortisation
and reduction in value of this asset does not represent the underlying value
of the agreements. For this reason, the amortisation is recognised in
non-underlying results as would materially distort the performance of the
acquired subsidiary and the Group's underlying trading performance.
c) Terminated acquisition costs
The Group incurred £3.2m of legal and advisory costs relating to an
acquisition which did not complete. These costs are recognised in
non-underlying as they relate directly to acquisition related activity and are
significant enough to distort the underlying performance of the Group.
d) Profit on disposal of corporate stores
The Group disposed of its London corporate stores during the period,
generating a profit on disposal of £21.4m, which includes £0.5m in
transactions costs. For further details refer to note 16. This is treated as a
non-underlying profit as is consistent with the treatment of the previous
impairment to the Corporate Stores recognised in 2019.
e) Reversionary scheme
The Group recognised income of £5.0m in relation to amounts receivable from
beneficiaries of the reversionary scheme, following the Group's settlement of
the employment tax and related charges with HMRC in 2022 and 2023. £0.7m of
cash was received by the end of the year, and an additional £2.1m was
received after the balance sheet date. A further £2.5m is expected to be
received in 2025. This income is recognised in non-underlying results
consistent with the recognition of the expense in previous years.
f) Profit on disposal of German associate
In the prior period the Group disposed of its 33.3% interest in Daytona JV
Limited. Proceeds of £79.9m were received of which £70.6m related to the
investment in Daytona JV Limited and £9.3m related to the repayment of the
loan. This generated a profit on disposal of £40.6m. For further details
refer to note 16. The profits arising from the disposal have been treated as
non-taxable on the basis the disposal falls under the Substantial Shareholding
Exemption.
g) Taxation
The current period tax charge of £7.7m primarily relates to the disposal of
the London corporate stores and the settlement income received in respect of
the historical share-based compensation scheme. The prior period tax charge of
£1.3m relates to the historical share-based compensation scheme following the
£11.9m settlement made in the prior period.
5. Group profit before interest and tax
This is stated after charging/(crediting) for:
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Amortisation of intangible assets 10.2 10.7
Depreciation of property, plant and equipment 6.7 5.9
Depreciation on right-of-use assets 4.8 5.3
Total depreciation and amortisation expense 21.7 21.9
Cost of inventories recognised as an expense 245.2 273.4
Profit on disposal of property, plant and equipment (0.2) -
Profit on disposal of subsidiaries (21.4) -
Profit on disposal of associate investment - (40.6)
6. Finance income
52 weeks ended 53 weeks ended
29 December 2024 31 December
£m 2023
£m
Other interest receivable 0.8 0.8
Interest on loans to associates and joint ventures - 0.1
Interest receivable on leases 13.0 12.7
Discount unwind 0.2 0.1
Total finance income 14.0 13.7
7. Finance costs
52 weeks ended 53 weeks ended
29 December 2024 31 December
£m 2023
£m
Debt facilities interest payable 17.3 14.4
Interest payable on leases 14.1 13.8
Other interest payable 0.1 -
Foreign exchange 0.2 -
Total finance costs 31.7 28.2
8. Taxation
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Tax charged / (credited) in the income statement
Current income tax
UK corporation tax:
- current period 33.1 21.6
- adjustment in respect of prior periods (0.2) 4.6
32.9 26.2
Income tax on overseas operations 0.3 (2.5)
Total current income tax charge 33.2 23.7
Deferred tax
Origination and reversal of temporary differences 1.4 2.6
Effect of change in tax rate - 0.2
Adjustment in respect of prior periods 0.1 0.8
Total deferred tax 1.5 3.6
Tax charge in the income statement 34.7 27.3
Tax relating to items credited/(charged) to equity
Reduction in current tax liability as a result of the exercise (0.1) -
of share options
Origination and reversal of temporary differences in relation 0.2 -
to unexercised share options
Tax credit in the Group statement of changes in equity 0.1 -
The total effective tax rate is 27.8% (2023: 19.2%).
There is no tax impact in relation to the foreign exchange differences in the
statement of comprehensive income.
9. Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the
year attributable to ordinary equity holders of the Parent by the weighted
average number of Ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit attributable
to ordinary equity holders of the Parent by the weighted average number of
Ordinary shares outstanding during the year plus the weighted average number
of Ordinary shares that would have been issued on the conversion of all
dilutive potential Ordinary shares into Ordinary shares.
Earnings
52 weeks ended 53 weeks ended
29 December 2024 31 December
£m 2023
£m
Profit after tax for the period 90.2 115.0
Non-underlying items (9.9) (39.3)
Underlying profit after tax 80.3 75.7
At 29 December 2024 At 31 December
Number 2023
Number
Basic weighted average number of shares (excluding treasury shares) 393,720,595 410,406,240
Dilutive effect of share options and awards 2,581,313 1,915,682
Diluted weighted average number of shares 396,301,908 412,321,922
The performance conditions relating to share options granted over 5,879,430
shares (2023: 5,131,078) have not been met in the current financial period and
therefore the dilutive effect of the number of shares which would have been
issued at the period end has not been included in the diluted earnings per
share calculation.
There were 1,867,439 share options excluded from the diluted earnings per
share calculation because they would be antidilutive (2023: 1,791,468).
52 weeks ended 53 weeks ended
29 December 2024 31 December
2023
Statutory earnings per share
Basic earnings per share 22.9p 28.0p
Diluted earnings per share 22.8p 27.9p
Underlying earnings per share
Basic earnings per share 20.4p 18.4p
Diluted earnings per share 20.3p 18.4p
10. Dividends
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Declared and paid during the period:
Equity dividends on Ordinary shares:
Final dividend for 2023: 7.2p (2022: 6.8) 28.1 28.3
Interim dividend for 2024: 3.5p (2023: 3.3p) 13.9 13.6
Dividends paid 42.0 41.9
Proposed for approval by shareholders at the AGM
(not recognised as a liability at 29 December 2024 nor 31 December 2023)
Final dividend for 2024: 7.5p (2023: 7.2p) 29.6 28.4
Total dividend for 2024 of 11.0p per share, with final dividend of 7.5p
proposed to be paid on 07 May 2025. The ex-dividend date is 3 April 2025, and
the record date is 4 April 2025.
11. Intangible assets
Goodwill Franchise fees Software Other Total
£m £m £m £m £m
Cost or valuation
At 25 December 2022 28.1 5.5 69.5 0.8 103.9
Additions - - 9.2 0.3 9.5
At 31 December 2023 28.1 5.5 78.7 1.1 113.4
Acquisition of subsidiaries 64.7 22.4 - - 87.1
Additions - - 6.3 0.5 6.8
Disposals (28.1) (4.4) - - (32.5)
Foreign exchange translation (2.1) (0.6) - - (2.7)
At 29 December 2024 62.6 22.9 85.0 1.6 172.1
Accumulated amortisation and impairment
At 25 December 2022 16.4 5.2 51.9 0.4 73.9
Provided during the year - 0.2 10.5 - 10.7
At 31 December 2023 16.4 5.4 62.4 0.4 84.6
Provided during the year - 3.3 6.6 0.3 10.2
Disposals (16.4) (4.4) - - (20.8)
At 29 December 2024 - 4.3 69.0 0.7 74.0
Net book value at 29 December 2024 62.6 18.6 16.0 0.9 98.1
Net book value at 31 December 2023 11.7 0.1 16.3 0.7 28.8
At 29 December 2024, the net book value of internally generated intangibles
included within software was £10.8m (2023: £9.9m). Internally generated
intangibles included within software additions during the year was £4.4m
(2023: £7.5m). The intangible assets relating to online sales have a net book
value at the end of the period of £13.9m (2023: £13.9m).
During the current period the Group acquired Shorecal Limited resulting in the
recognition of intangible assets of £22.4m at fair value and goodwill of
£64.7m at cost, further detailed in note 15. The intangible asset relates to
the valuation of the Standard Franchise Agreements ("SFAs" or "Franchise
fees") which were in place before the acquisition, previously issued by the
Group to Shorecal Limited when this was an independently controlled
franchisee. These are amortised over the remaining life of the franchise
agreements, which is on average 5 years.
During prior periods, the Group acquired Sell More Pizza Limited which formed
part of the Group's London Corporate stores. On acquisition, the Group
recognised reacquired SFAs at fair value and goodwill at cost. During the
current period the remaining £11.7m carrying value of the intangibles and
goodwill relating to these London corporate stores were disposed of, as
further detailed in note 16.
The carrying amount of goodwill and indefinite life intangibles has been
allocated as follows:
At 29 December At 31 December
2024 2023
£m £m
London corporate stores - 11.7
Shorecal 62.6 -
Impairment Review
The Group is obliged to test goodwill and indefinite life intangibles annually
for impairment, or more frequently if there are indications that goodwill and
indefinite life intangibles might be impaired.
In performing these impairment tests, management is required to compare the
carrying value of the assets of a Cash Generating Unit (CGU), including
goodwill and indefinite life intangibles, with their estimated recoverable
amount. The recoverable amounts of an asset being the higher of its fair value
less costs to sell and value in use. Management considers the different nature
of the Group's operations to determine the appropriate methods for assessing
the recoverable amounts of the assets of a CGU. When testing goodwill for
impairment, the goodwill is allocated to the CGU or group of CGUs that were
expected to benefit from the synergies of the business combination from which
it first arose.
Corporate stores - Impairment Review
An impairment review has been performed over the goodwill and intangible
assets attributable to the Group's corporate store business, within the UK
& Ireland operating segment. Following the disposal of the Group's London
corporate stores and acquisition of Shorecal Limited in the period, the
impairment review considers the recoverable amount of the Shorecal corporate
store business located in Northern Ireland and the Republic of Ireland.
The Group sold its London corporate stores for an aggregate profit on disposal
before tax of £21.4m, which exceeded the impairments previously recognised
against the goodwill allocated to those stores of £16.4m. The Group's
experience acquiring, operating and selling its London corporate stores has
been considered in the value assessments of its Shorecal corporate stores.
Recoverable amount has been assessed by estimating the fair value less costs
of disposal of the Shorecal business, where it is estimated how much
interested parties would pay to acquire the future cash generation potential
of the business. The assessment of future cash generation potential draws on
the Group's five-year plan for the business. During 2024, the Shorecal
business performed broadly in line with expectations. Areas of estimation
uncertainty in the cash flow projections are those regarding revenue growth,
new store openings and EBITDA margins, where food cost inflation, labour
inflation, employment tax rates and expected productivity gains are key
underlying assumptions. The Group has drawn on its historic experience in
estimating new store and store refit capital expenditure.
Long-term growth rates are set no higher than the long-term economic growth
projections of UK&I, where the business geographically operates. In
valuing future cash generation potential, pre-tax discount rates have been
used as an estimate of current market assessments of the time value of money
and the risks specific to the CGUs and businesses under review. The discount
rates and long-term growth rates applied in the annual impairment reviews
conducted in the current and prior year, are as follows:
Long-term Growth Rate Discount Rate
2024 2023 2024 2023
Corporate Stores 2.0% 2.0% 12.0% 11.3%
For the year ended 29 December 2024, no impairment has been recognised against
the goodwill allocated to the corporate stores (2023: £nil). The valuation
based on the current five-year plan results in a recoverable amount of
£107.4m, with the asset base being £85.6m, headroom of £21.8m is available.
The valuation is at Level 3 of the IFRS 13 hierarchy, due to there being
assumptions in the valuation not based on observable market data.
Master franchise fees
Master franchise fees consist of costs relating to the MFA for UK and Ireland.
Each MFA is treated as having an indefinite life. The MFAs are tested annually
for impairment in accordance with IAS 36. The assumptions underlying the tests
on the UK & Ireland MFAs are not disclosed as the carrying value is not
material.
Standard Franchise Agreements
SFAs are recognised at fair value on acquisition of corporate stores and, as
reacquired assets, are being amortised over their remaining contractual life.
The net book value of SFAs at 29 December 2024 is £18.6m (2023: £0.4m). The
SFAs attributable to acquired corporate stores are tested for impairment in
tandem with the goodwill and other intangible assets attributable to those
stores, as described above.
The amortisation of intangible assets is included within administration
expenses in the income statement.
12. Right-of-use assets, lease receivables and lease liabilities
Right-of-use assets
At 29 December At 31 December
2024 2023
£m £m
Property 8.9 9.7
Equipment 11.9 9.6
20.8 19.3
Amounts recognised in the income statement
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Depreciation - Property 0.8 0.9
Depreciation - Equipment 4.0 4.4
4.8 5.3
Lease receivables
At 29 December At 31 December
2024 2023
£m £m
Property 206.7 208.7
206.7 208.7
Lease liabilities
At 29 December At 31 December
2024 2023
£m £m
Property 217.3 220.2
Equipment 12.4 10.1
229.7 230.3
13. Investment in associates and joint ventures
Joint ventures Associates
£m £m
Balance at 25 December 2022 4.6 20.8
Underlying profit for the period 0.1 1.9
Dividends received (0.3) (1.9)
Balance at 31 December 2023 4.4 20.8
Underlying profit for the period 0.3 3.0
Dividends received - (2.5)
Balance at 29 December 2024 4.7 21.3
Investments in associates
The Group has a 49% interest in Full House Restaurant Holdings Limited ('Full
House'), a private company that manages pizza delivery stores in the UK.
The Group has a 46% interest in Victa DP Limited (Victa). The investment has
been treated as an associate as the Group holds significant influence through
the voting rights gained through the equity investment, and representation on
the Board. The investment is treated as an associate under IAS 28, however is
referred to as the 'Northern Ireland Joint Venture' or 'NI JV' through the
report as it is considered commercially to be a joint venture.
Victa had significant external net debt at the balance sheet date of £18.9m
and was in breach of its finance facility covenants. The company continues to
trade profitably and make all payments as they fall due including debt
payments. During the period, the Group provided £3.9m of loan financing to
Victa, which was used by the company to repay debts owed to former owners and
to settle a legacy tax liability. The £3.9m of loan financing provided to
Victa has been included in the analysis of amounts owed by associates and
joint ventures in note 19 as loan balances. As a feature of the agreements
upon which the £3.9m of financing was provided, the Group holds an option to
acquire three stores from Victa. If exercised, £2.4m of the £3.9m
financing provided would be regarded as a prepayment of consideration for the
three stores. The fair value of the option at the balance sheet date was
deemed to be £nil, with the exercise price being comparable to the fair value
of the three stores.
The loan investments, along with the Group's associate investment in Victa,
have been assessed for impairment at the balance sheet date. The impairment
assessment compared the present value of future expected pre-tax free cash
flows of Victa with the carrying value of the Group's investments and loans to
the company, adjusting for its external net debt. The discount rate used in
the assessment was 13.3%, comparable with the rate the Group used in
conducting an impairment review of its Shorecal corporate stores (see note 11)
after making tax rate adjustments. No impairment was deemed to be required,
with there being a minimum headroom of £1.8m in the assessment.
Investments in joint ventures
During the year, the Group held a 50% UK joint venture in Domino's Pizza West
Country Limited ('West Country'). West Country is accounted for as a joint
venture using the equity method in the consolidated financial statements as
the Group has joint control through voting rights and share ownership as well
as being party to a joint venture agreement, which ensures that strategic,
financial and operational decisions relating to the joint venture activities
require the unanimous consent of the two joint venture partners.
14. Financial liabilities
At 29 December 2024 At 31 December
£m 2023
£m
Current
Share buyback obligations - 6.1
- 6.1
Non-current
Bank revolving facility 19.1 85.8
Private Placement Loan Notes 298.6 199.1
317.7 284.9
Share buyback obligation
In the prior year, the Group entered into an irrevocable non-discretionary
programme with Numis Securities Limited to purchase up to a maximum of £70.0m
of shares from 29 August 2023. During 2023, 17,152,705 shares were purchased
for a consideration of £63.9m. The remaining share buybacks and unpaid
amounts outstanding at 31 December 2023 of £6.1m were recognised as a
financial liability. This obligation was settled during 2024.
Debt facilities
At 29 December 2024, the Group had a total of £500m (2023: £400m) of debt
facilities, of which £180m (2023: £112.9m) was undrawn. The facilities
include a £200m multi-currency revolving credit facility (RCF) and £300m
(2023: £200m) of US private placement loan notes (USPP). Arrangement fees
of £1.9m and £2.0m were incurred on the RCF and USPP respectively.
Private placement loan notes
The USPP loan notes issued in 2022 mature on 27th July 2027. Arrangement fees
of £0.7m (2023: £0.9m) directly incurred in relation to this USPP are
included in the carrying values of the loan notes and are being amortised over
the remaining loan term. Interest is charged at 4.26% per annum.
On 20 June 2024, the Group issued an additional £100m USPP loan notes, which
mature on 20th June 2034. Arrangement fees of £0.7m directly incurred in
relation to this USPP are included in the carrying values of the loan notes
and are being amortised over the loan term. Interest is charged at 5.97% per
annum.
The USPP loan notes are secured by an unlimited cross guarantee between the
same legal entities that are guaranteeing the revolving credit facility.
Bank revolving facility
The £200m revolving credit facility expires on 27 July 2027. Arrangement fees
of £0.9m (2023: £1.3m) directly incurred in relation to the RCF are included
in the carrying values of the facility and are being amortised over the
extended term of the facility.
Interest charged on the revolving credit facility ranges from 1.85% per annum
above SONIA (or equivalent) when the Group's leverage is less than 1:1 up to
2.85% per annum above SONIA for leverage above 2.5:1. A further utilisation
fee is charged if over one-third is utilised at 0.15%, which rises to 0.30% of
the outstanding loans if over two-thirds is drawn. In addition, a commitment
fee is calculated on undrawn amounts based on 35% of the current applicable
margin.
The RCF is secured by an unlimited cross guarantee between Domino's Pizza
Group plc, DPG Holdings Limited, Domino's Pizza UK & Ireland Limited, DP
Realty Limited, DP Pizza Limited, Sell More Pizza Limited, Sheermans SS
Limited, Sheermans Limited, Shorecal Limited, Karshan Limited, K&M Pizzas
Limited and Sarcon No 214 Limited.
An ancillary overdraft and pooling arrangement was in place with Barclays Bank
Plc for £20.0m covering the Companies, Domino's Pizza Group plc, DPG Holdings
Limited, Domino's Pizza UK & Ireland Limited, DP Realty Limited, DP Pizza
Limited, Sell More Pizza Limited, Sheermans SS Limited and Sheermans Limited.
Interest is charged for the overdraft at the same margin as applicable to the
revolving credit facility above SONIA
15. Business combinations
On the 10th of April 2024, the Group acquired the remaining 85% share capital
of Shorecal Limited, a private company registered in the Republic of Ireland
that operates Domino's franchise stores in Ireland, taking its ownership to
100%. A total consideration of £54.8m was transferred, which includes net
cash consideration of £32.5m and share consideration of £22.3m which relates
to a share issue of 6,700,909 shares in the Company at the share price on the
acquisition date.
The acquisition enables the Group to accelerate Shorecal's growth across ROI
and Northern Ireland, materially increasing the store count and leverage
capacity in the Irish supply chain centre.
The provisional acquisition balance sheet was adjusted to reflect the
provisional fair value of the assets and liabilities. Adjustments to the
balance sheet primarily relate to recognition of intangible assets for the
reacquired rights relating to the franchise agreements, remeasurement of right
of use assets and lease liabilities, and contingent liabilities and
provisions.
The reacquired rights of £22.4m were valued using multiple period excess
earnings method over the remaining contractual term of the franchise
agreements. These assets will be amortised over the period of the franchise
agreements, with amortisation recognised in non-underlying results.
Provisions of £4.2m have been recognised on acquisition which include £1.6m
relating to dilapidations provisions for the acquired leases and £2.6m
relates to historical tax exposures of the Shorecal group, including
litigation with Revenue Ireland which has yet to be settled. Progress towards
a settlement of the historical tax exposures is being made, however there
remains uncertainty over the settlement amount and therefore cannot be
reliably measured. Based on expert advice, the best estimate is currently a
£2.2m settlement, however there could be an outcome significantly different
to this.
Financial liabilities of £16.3m, representing external debt held
pre-acquisition, were settled by the Group subsequent to the acquisition date.
The resulting goodwill of £64.7m recognised represents intangible assets that
do not qualify for separate recognition, such as the extensive assembled
workforce, and synergies resulting from the Group's purchase of this
franchisee group, and the future growth potential of the Group.
Immediately prior to the acquisition, the Group held a 15% interest in
Shorecal with a fair value of £10.0m on the acquisition date.
Since the acquisition, Shorecal has contributed £30.0m of Group revenue and
profit before tax of £0.9m. Had the acquisition taken place at the start of
the reporting period, the Group would have had revenue of £673.7m and profit
before tax of £125.6m. Since acquisition an exchange rate loss of £2.1m
arose on Goodwill.
One of Shorecal Limited's subsidiaries, Karshan (Letterkenny) Limited, has 49%
of its issued share capital owned by non-controlling shareholders. Karshan
(Letterkenny) Limited owns just one of the 34 stores the Group acquired in the
Shorecal acquisition. The fair value of the non-controlling interest at
acquisition is considered immaterial to the Group and has not been recognised.
Profit and equity attributable to the non-controlling interest at the balance
sheet date is also considered immaterial to the Group and so has not been
recognised in the Group's Balance Sheet, Statement of Comprehensive Income and
Statement of Changes in Equity.
£m
Cash paid on acquisition 37.3
Cash acquired (4.8)
Net cash consideration 32.5
Non-cash consideration - Share issue 22.3
Total consideration transferred 54.8
Fair value of net assets acquired
Property, plant and equipment 2.9
Intangible assets 22.4
Right-of-use-assets 6.3
Deferred tax assets 0.6
Trade and other receivables 2.0
Inventories 0.2
Total assets acquired 34.4
Current tax liabilities (0.3)
Deferred tax liabilities (3.7)
Financial liabilities (16.3)
Provisions (4.2)
Lease liabilities (6.3)
Trade and other payables (3.5)
Total liabilities acquired (34.3)
Net identifiable assets acquired at fair value 0.1
Goodwill arising on acquisition
Consideration transferred 54.8
Previously held investment in Shorecal 10.0
Non-controlling interest -
Fair value of net assets acquired (0.1)
Goodwill 64.7
16. Disposals
London corporate stores
During the period, the Group disposed of its London corporate stores,
generating a profit on disposal of £21.4m as follows:
£m
Cash received on disposal 32.8
Deferred consideration 2.0
Total consideration 34.8
Net assets disposed excluding cash (see below) (12.9)
Profit on disposal before professional fees 21.9
Costs associated with disposal (0.5)
Total profit on disposal 21.4
Intangible assets 11.7
Property, plant and equipment 2.1
Right-of-use assets 7.2
Inventories, trade receivables and trade and other payables 0.1
Deferred tax assets 0.2
Lease liabilities (7.2)
Provisions (1.2)
Net assets disposed 12.9
Investment in Daytona JV Limited
In June 2023, the Group disposed of its 33.3% interest in Daytona JV Limited.
The Group received £79.9m, of which £70.6m related to the investment in
Daytona JV limited and £9.3m related to the repayment of the loan. Included
in the cash received on disposal was a £1.8m gain on a forward foreign
currency contract that was entered into to provide certainty to the Group over
cash flows received on disposal. The profit on disposal is analysed as
follows:
Daytona JV
Limited
£m
Cash received on disposal 70.6
Carrying amount of investment disposed (32.4)
Currency translation gain transferred from translation reserve 2.5
Profit on disposal before professional fees 40.7
Professional fees relating to the disposal (0.1)
Total profit on disposal of investment 40.6
The profits arising from the disposal were treated as non-taxable on the basis
the disposal fell under the Substantial Shareholding Exemption.
17. Financial instruments
Investments
In November 2018, the Group acquired 15% of the issued share capital of
Shorecal Limited, a private company registered in the Republic of Ireland. The
Group's shareholding in Shorecal Limited was in preference shares, acquired
for an original cost of investment of €12.2m (£11.0m). As a preference
shareholder, the Group had enhanced rights to dividend distributions and
enhanced rights over Shorecal Limited's equity value in the event of a
liquidation or onward share sale. The investment in Shorecal Limited was
designated as a fair value through profit and loss equity instrument, whereby
dividends received by the Group were recognised in profit and loss together
with any fair value gains or losses. A probability weighted expected return
method was applied in determining the fair value of the investment in previous
periods, whereby multiple future outcomes for Shorecal Limited were simulated
with a probability assigned to each scenario. The investment was categorised
at Level 3 of the IFRS 13 hierarchy due to the unobservable inputs in the
method for determining fair value.
The Group acquired the remaining 85% of issued share capital of Shorecal
Limited in the current period, as further detailed in note 15. There were no
fair value investment changes in the current period prior to the full
acquisition. In the prior period, there were also no fair value investment
changes and dividends of €0.9m (£0.8m) were received against the
investment.
In April 2024, the Group acquired 12.1% of the issued ordinary share capital
of DP Poland plc, an AIM-listed company based in the UK, for a cost of
£11.4m, which includes transaction costs of £0.4m. An election has been made
for the equity instrument to be designated as fair value through other
comprehensive income. The investment is categorised at Level 1 of the IFRS 13
fair value hierarchy with its fair value based on quoted prices in the active
AIM market. The fair value of the investment at the balance sheet date is
£11.5m resulting in a fair value gain of £0.1m which has been recognised in
other comprehensive income.
The Group also entered an option agreement to purchase additional shares in DP
Poland plc from another shareholder, which would take the Group's percentage
ownership in DP Poland plc up to a maximum of 29.99%. This option is not
recognised on the balance sheet as it had no fair value. The option was not
considered to give the Group rights and benefits that would require treatment
of the investment as an associate at the balance sheet date. The option lapsed
shortly after the balance sheet date on 31 December 2024.
18. Share-based payments
The expense recognised for share-based payments in respect of employee
services received during the 52 weeks ended 29 December 2024 was £4.0m (2023:
£3.8m). This all arises on equity-settled share-based payment transactions.
19. Related party transactions
During the period the Group entered into transactions, in the ordinary course
of business, with related parties. Transactions entered into and trading
balances outstanding with related parties are as follows:
52 weeks ended 53 weeks ended
29 December 31 December
2024 2023
£m £m
Sales to related parties
Associates 45.4 46.8
Joint Ventures 7.1 7.5
52.5 54.3
As at 29 December As at 31 December
2024 2023
£m £m
Amounts owed by related parties
Associates 6.9 1.4
Joint Ventures 0.1 1.7
7.0 3.1
20. Analysis of Net Debt
At 29 December
At 31 December
2024
2023
£m £m
Cash and cash equivalents 52.2 52.1
Debt facilities (320.0) (287.1)
Capitalised facility arrangement fees 2.3 2.2
Net Debt (265.5) (232.8)
The Group's lease liabilities are not included in the Group's definition of
Net Debt. Lease liabilities are measured at the present value of future lease
payments, including variable lease payments and the exercise price of purchase
options where it is reasonably certain that the option will be exercised,
discounted using the interest rate implicit in the lease, if readily
determinable, or alternatively the Group's incremental borrowing rate as a
lessee.
21. Additional cash flow information
Other cash flows from investing activities
52 weeks ended 53 weeks ended
29 December
31 December
2024 2023
£m £m
Dividends received from investments 0.1 0.8
Dividends received from associates and joint ventures 2.5 2.2
(Increase) / Decrease in loans to associates and joint ventures (3.9) 9.3
(1.3) 12.3
Share transactions in cash flows from financing activities
52 weeks ended 53 weeks ended
29 December
31 December
2024 2023
£m £m
Purchase of own shares - share buyback (26.3) (93.3)
Purchase of own shares - employee benefit trust - (5.0)
(26.3) (98.3)
Reconciliation of free cash flow
52 weeks ended 53 weeks ended
29 December
31 December
2024 2023
£m £m
Cash generated from operating activities 103.5 113.5
Net interest paid (15.7) (13.1)
Receipt of principal element on lease receivables 16.2 15.0
Receipt of interest element on lease receivables 13.0 12.6
Repayment of principal element on lease liabilities (20.7) (20.1)
Repayment of interest element on lease liabilities (14.1) (13.8)
Dividends received 2.6 3.0
Other (0.1) (0.1)
84.7 97.0
Cash and cash equivalents
52 weeks ended 53 weeks ended
29 December 2024
31 December
£m 2023
£m
Cash at bank and in hand 52.2 52.1
Total cash at bank and in hand 52.2 52.1
Reconciliation of financing activities
At Net cash flow Exchange Non-cash At
01 January 2024 £m differences movements 29 December 2024
£m £m £m £m
Debt facilities (284.9) (32.5) 0.4 (0.7) (317.7)
Lease liabilities (230.3) 34.8 0.5 (34.7) (229.7)
(515.2) 2.3 0.9 (35.4) (547.4)
At Net cash flow Exchange Non-cash At
26 December 2022 £m differences movements 31 December 2023
£m £m £m £m
Debt facilities (283.7) (0.8) 0.2 (0.6) (284.9)
Lease liabilities (223.4) 33.9 0.1 (40.9) (230.3)
(507.1) 33.1 0.3 (41.5) (515.2)
22. Post balance sheet events
On 10 March 2025, the Group purchased an additional 24% equity in Victa DP
Limited. Prior to the acquisition, the Group held a 46% stake in Victa DP
Limited. Following this transaction, the Group's total ownership in Victa DP
Limited increased to 70%.
The net cash consideration for the acquisition amounted to £25.6 million,
which consisted of an equity purchase of £7.2m, capital contribution of
£5.2m and debt provided of £19.4m, which was offset with receipts of amounts
due to the Group for existing assets of £6.2m.
The fair value of the identifiable assets and liabilities of Victa DP Limited
at the acquisition date will be determined and disclosed in the financial
statements for the 2025 financial year.
The acquisition occurred after the end of the financial year, which concluded
on 29 December 2024, and therefore, is considered a post-balance sheet event
under IFRS. The financial impact of this acquisition is not reflected in the
financial statements for the year ended 29 December 2024.
A final dividend has been proposed of 7.5p per share. Refer to note 10 for
additional information.
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