Online business boosts Domino's profit

14 Aug 2012, 4:36 pm   -   Source: AAP
The Australia-based pizza maker says the profits are being pushed by soaring digital sales and demand for more shopfronts. (Getty Images)

The Australia-based pizza maker says the profits are being pushed by soaring digital sales and demand for more shopfronts. (Getty Images)

Domino's will continue to build up its online business in the year ahead as it expects profits to grow by 15 per cent

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Domino's Pizza says it will be dishing up more dough over the next year, with full-year profits expected to grow by 15 per cent by June 2013.

The Australia-based pizzamaker says the profits are being pushed by soaring digital sales and demand for more shopfronts.

On Tuesday it reported a 26 per cent rise in full year net profit of $26.9 million for the year to June 30, 2012, up from $21.4 million in the previous year.

Chief executive Don Meij said customers were increasingly warming to buying pizzas online, especially through their smartphones, instead of the conventional ways over the phone or in-person.

He said it's expected more than 60 per cent of Domino's overall pizza sales will come through via online orders this year.

"We've gone from one per cent of (online sales) in 2005 to 50 per cent today, and 40 per cent of that's through smartphones," Mr Meij told AAP.

Domino's says its same store sales will grow by three to five per cent by June 2013, and about 75 new stores will open at the same time as a result of that.

"The whole digital exposure means we're getting more business, and more business means we need more shops to handle all that," Mr Meij said.

Domino's expects new product lines and online offerings will drive its sales this year.

The pizzamaker is to launch a new iPad app that allows customers to `create' their own pizza before it's handed to them at the door.

"You actually make the pizza with your fingers, so you're actually pulling the topping on the pizza and building it.

"The whole idea of digital is what can you do online that you can't do offline, well, you can't sit there with a pen and paper and draw a pizza (you want)," he said.

Domino's now sees itself not just as a fast food retailer, but a digital company, Mr Meij said.

"We aspire to other digital retailers and say, well, who has best practices and how do we, in our space, learn and lead?"

Google Australia managing director Nick Leeder said Domino's understanding of its tech-savvy market was "scary".

"The things that Domino's knows about Australian males and their behaviour at five O'clock in the afternoon is just scary," Mr Leeder said at the Australia-Israel Chamber of Commerce function on Tuesday.

Mr Leeder said Domino's had understood the move by customers to mobile.

"They've taken a punt based on what they knew that their customers were doing and they've seen some terrific results," he said.

Domino's will pay shareholders a full year fully-franked dividend of 27.1 cents per share, up 23.7 per cent on the dividend paid in the corresponding period last year.

The company's shares closed 25 cents higher to $9.65 on Tuesday.

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