Shares in Domino's Pizza UK & IRL (LON:DOM) lost over 7 percent in early deals despite an apparently strong set of results.
For the twelve months ended 31 December 2010, the UK pizza franchise reported a 27.3 percent increase in pre-tax profit before exceptionals to £38 million (FY09: £29.9 million), but statutory profit before tax was down £5.8 million to £35.2 million (FY09: £41.0 million). The fall was due to a £15 million one-off credit taken in 2009 for the acquisition of Domino Leasing Ltd.
Basic earnings per share grew 25.7 percent to 17.36 pence a share (FY09: 13.81p) and the firm decided to increase its total dividend by 31 percent to 10.2 pence.
"I am delighted to report another exceptional set of results,” chief executive Chris Moore said.
“The business has continued its remarkable run with an increase in system sales of 19.3 percent to £485.3 million (2009: £406.9m), like-for-like sales growth of 11.9 percent across 553 mature stores (2009: 8.4 percent in 501 stores), and a record 57 new store openings (2009: 55).
Furthermore the chief executive highlights that the group made a ‘solid start’ to 2011. Like-for-like sales are up 4.7 percent in the first seven weeks.
"The company is well positioned to further capitalise on our market leading position ... I am confident that we will deliver another year of strong growth," Moore added.
Seymour Pierce analyst Hugh-Guy Lorriman said: “These are excellent results, albeit expected to be so. Few companies in UK leisure can boast greater than 25 percent earnings growth, especially when there has been no increase in leverage - net debt has reduced by £7m according to todays' statement.
He adds: “Domino’s continues to produce stellar results to support its sector super star status.”
By 9:00 am the shares were down 37 pence, about 7 percent, and were changing hands at 487 pence a share.