Domino’s Pizza Group has revealed plans to create 7,000 new jobs and open 200 new stores across the UK and Ireland after recording its busiest ever sales week during the pandemic.
Shares in the UK arm of the pizza giant soared by nearly 14% on Monday morning on the news of its multi-year growth plan, which is targeting total system sales of £1.6-£1.9 billion, up from around £1.3 billion last year, with a "turbo-charge" of its in-store collection offering, including an expansion of drive-thrus.
The new strategy was announced as the group reported seeing like-for-like sales up 11% in 2020, and an underlying pre-tax profit of £101.2 million, up £2.4 million on 2019 and ahead of consensus. Net debt fell by 26% to £171.8 million.
Collections have slumped during the pandemic, currently at 60% of the levels seen in 2019. But locked-down Britons ordered in as never before over the festive period, chief executive Dominic Paul told the Standard, ordering a pizza every 13 seconds on both Christmas Eve and New Year's Eve.
The company, which has more than 1,200 stores in its network, expanded its vegan range and saw 94% of its sales completed online last year, up from 83% in 2019.
Paul, who joined the group in early 2020, said: "We've created a new strategy that we believe will create 7,000 jobs over the next few years.
"We think there is great growth potential here, and we want to be part of the jobs creation for this country."
He said the jobs will be created both in new stores and through expansions of existing stores, which will be opened with both old and new franchisees.
Before the crisis, investors had been focused on a row at Domino's between the central management and its franchisees. Former chief executive David Wild stepped down amid the row which saw franchisees refuse to open new stores unless they got an increased share of the profits.
Paul said today that executives "have maintained an open dialogue with our franchisees throughout the development of this plan and, while we do not have an agreement yet, we have made an attractive offer to them which we believe will deliver powerful benefits to both them and the Group."
The company said that in 2020 franchisee average EBITDA per store grew 58% to £229,000, up from £145,000 in 2019 - largely reflecting franchisees retaining the Government cut to VAT on hot takeaway food from 20% to 5% from July.
Paul said Domino’s had to pivot its set-up after the pandemic hit, as demand shifted from late-night student and office worker orders to family meals between 4pm and 7pm each day.
The chief executive said he is convinced the pandemic boom in ordering is set to last, as everyone will want to meet up once lockdown lifts, but "people can't afford to eat out in restaurants every night".
The company said it is to issue a full year dividend of 9.1p per share. Analysts Douglas Jack and Ivor Jones at Peel Hunt said: "We are upgrading our profit-before-tax forecasts by 6%."