Domino's profit climbs but openings sliced

Pizza delivery chain Domino’s today served up record profits, but said a shortage of new franchisees had stopped it hitting its annual store opening target.

The group, which runs 357 stores in the Ireland and the UK on a franchise basis, said pre-tax profits leapt by more than a third to £8.8m (€12.7m) in the 53 weeks to January 2.

It said its strategy of opening more stores to boost turnover was paying off, with total sales in 2004 lifting by £32m (€46.4) to £174.3m (€252.9m) after it launched 40 new outlets.

However, Domino’s said it had failed to hit its target of matching the 50 stores opened in 2003 due to planning difficulties and a lack of suitable franchisees in its target regions.

Chief executive Stephen Hemsley said the company had since managed to find the right people to open most of the extra 10 sites.

He added that trading in the first six weeks of the current year had been good, with like-for-like sales up 6.6% and store openings on target.

“We have made a promising start to 2005 and therefore look forward to the year with confidence,” he said.

Domino’s, founded in the United States in 1960, claims to be the world leader in pizza delivery, with more than 7,000 stores in more than 50 countries and more than 250,000 staff.

Its first Irish outlet opened in 1991.

Launches of new products, including a two-layer pizza called Double Decadence - promoted in a campaign starring Naked Gun actor Leslie Nielsen – have helped it boost sales.

Chairman Colin Halpern said the group’s future growth opportunities were “more exciting than ever”, with more homes being built, demand for in-house entertainment – and consequently pizzas – still increasing.

Mr Halpern said the firm had found that “bigger meant better”, with growth in store numbers translating into higher revenues.

“Simply put, more stores mean more sales,” he said.