Domino’s joins ASX giants within decade

Domino’s Pizza Enterprises is expected to post full-year earnings that will eclipse its total market capitalisation when it listed on the ASX 10 years ago.

In fact, its valuation is now larger than sharemarket stalwarts such as CSR, Perpetual Trustees and Adelaide Brighton.

Domino’s reported its strongest store sales across Australia and New Zealand for four years, as well as robust growth across its other key markets of Japan and Europe, posting a 44.2% lift in half-year profit to $A29.1 million. Revenue jumped 29.5%.

The strong result, combined with upgraded guidance for the full year, put a rocket under Domino’s shares, which rose 21% to $A33.

This gives Domino’s a market capitalisation of $A2.84 billion, ranking it the 90th biggest company on the ASX. 

This is bigger than JB Hi-Fi and almost three times the size of Australia’s biggest department store, Myer.

Chief executive Don Meij says, “we listed at $A120 million and with this earnings upgrade expectations are north of $120 million ebit [earnings before interest and tax].”

The upgraded guidance is for full-year net profit growth of 32.5%, against previous guidance in the region of 25% and same store sales growth of 6-8% versus 4-6%.

The company is also promising a faster store-rollout programme with 180-200 store openings against earlier guidance of 175-185.

Domino’s has 1435 stores, including 648 across Australia and New Zealand, 427 in Europe and 360 in Japan.

It is aiming to have 120 stores in New Zealand with up to 10 opening since the middle of last year.

Domino’s newest New Zealand outlet is in Jean Batten Pl just off Queen St in the Auckland CBD. It will replace a Pie Face outlet, which closed after the Australian-based franchise company was put into administration in November last year.

Latest reports say the company has since reached an agreement with creditors after a bailout by TCA Global Fund Management. The company is now focused on wholesale and direct retail sales of its pie production.