We have recently launched an industry first, with voice ordering through Amazon Echo, innovating in how customers interact with the brand, and we will be providing improvements to our overall Amazon Echo and Google Home ordering capabilities.
Moreover the geeks at Domino’s have been working overtime in their quest to bring tech to the customer experience more widely:
DPG continues to lead the pizza market, with innovations such as the popular Lotta-Chocca pizza and our launch today of Amazon Echo voice ordering. Following a successful trial, we’ll be rolling out GPS, which will enable customers to track their delivery and help franchisees with labour management.
As to today’s numbers – which are impressive – the FTSE 250 pizza delivery firm has managed to increase sales, pre-tax profits, basic EPS and the dividend for the 26 weeks to the 26 June 2017.
Domino’s also managed to increase market share and are on course to have 1,600 stores open in the UK.
Like a lot of consumer facing businesses in the UK Domino’s ‘acknowledge that UK consumers are currently more cautious about the economic outlook’ and have decided to focus on four key areas to countenance this consumer trend:
- growth investment with franchisees
- boosting marketing
- improving customer engagement
- enhancing their leading position in food delivery
That together with the £10 million share buyback looks like a recipe for success from a brand that is well recognised the world over let alone in the UK.
One red flag is the increase in long term debt and notes to the accounts allude to a multi currency loan of £175 million made in July 2016.
The board has used it to purchase goods and services in other currencies as well as an acquisition – Germany’s largest pizza delivery chain – as well as a strategic stake in Domino’s in Iceland, Norway and Sweden ‘with promising early results’ – time will tell.
All together a nice set of numbers with a management team that has set out and implemented a clear plan for future growth in the face of tightening consumer wallets at home in the UK.
The current dividend yield is 3.09% which is handy and the PE ratio is 17.5 which is too expensive for the Shares and Stock Markets Portfolio.
Domino’s Pizza (LSE: DOM) remains on my radar in the event that a share price decline will ensue making it a contender for new position.