Domino's profits pass £100m as COVID sparks lockdown pizza boom

Domino's Pizza (DOM.L) stock ticked 12.1% higher after the opening bell in London on Tuesday, as the chain reported strong full-year results due to customers turning to takeaways under COVID-19 lockdowns.

Its underlying profit before tax was £101.2m ($140.6m), up £2.4m, even after COVID-19 costs of £9m to support franchisees to trade safely.

In a release, Domino's said that statutory profit after tax hit £39.7m, up from £2.8m. The loss on discontinued international operations reduced to £42.5m (2019: £56.5m), including £22.6m (2019: £35.2m) of impairments of international operations.

Alongside this, free cash flow increased by 73% to £99.0m (whereas it was £57.1m in 2019).

As with other businesses, Domino's underwent a digitisation drive, with the acceleration of online and app sales meaning that 94.3% of its delivery sales were online in the UK in the last year.

The company said it is expecting to deliver our medium-term ambition of total system sales of £1.6bn to £1.9bn.

READ MORE: Deliveroo narrows losses to £223m as it plans London IPO

Dominic Paul, CEO, said: "We've worked successfully in partnership with our franchisees to continue to operate safely through the various lockdowns and play our part in feeding the nation during the pandemic, while supporting our colleagues and key workers.

"At the same time, we have been looking to the future, and today we are announcing a multi-year strategic plan which will drive growth across the business and deliver an exciting and profitable future for both our shareholders and our franchisees."

The new strategic plan hinges on a number of things, including a look to "turbocharge" its collections business and attract new franchises.

The results comes as rival food delivery company Deliveroo closes in on a London stock market listing. The company confirmed its intention to list on Monday, and said that it had narrowed its losses in 2020 to £223.7m ($309.4m).

The company also said over the weekend it would offer up of up to £10,000 to its busiest riders with a £16m "thank you" fund.

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