What gets measured gets done Dominos boss backs vaccination targets

By Dominic PowellUpdated August 18, 2021 â€" 12.34pmfirst published at 9.21am

Domino’s Pizza boss Don Meij has backed the federal government’s vaccination targets and the path out of lockdowns as the pizza seller’s growth continues to soar off the back of the pandemic.

Mr Meij said while the ultimate success of the state and federal governments’ COVID plans wouldn’t be measured for years to come, the shorter-term targets were a positive step.

“What this virus is showing us is that it’s got many different lives, and who knows what’s going to happen next,” he said. “And the virus will be with us for many years to come.”

“Setting targets and rallying the country towards those targets [...] can only be positive. What gets measured gets done.”

Domino’s chief executive Don Meij.Credit:Attila Csaszar

Shares in Domino’s jumped 4 per cent on Wednesday morning to a record high after the pizza retailer raised its full-year dividend by nearly half and flagged higher future dividend payouts, telling shareholders it had entered a “new phase of growth” through the pandemic.

Defying a downbeat retail market caused by continued COVID lockdowns, the pizza chain said its total sales for the 2021 financial year rose 14.6 per cent to $3.7 billion, with earnings jumping 30 per cent to $188 million.

The results were largely in line with market expectations as Domino’s is seen as less affected by the pandemic than many of its retail peers, thanks to delivery and online being a core part of its business.

This prompted Domino’s to lift its long-term guidance, with the business now increasingly optimistic about its growth plans. Store openings over the next three to five years are now expected to increase by between 9 per cent and 12 per cent per year, up from the company’s previous 7 per cent to 9 per cent range. The company opened 285 new restaurants during the year, increasing the number of outlets by 10.7 per cent.

Mr Meij agreed the business had been a major beneficiary of COVID-19, but said this was thanks to the years of work done before the virus to build out Domino’s digital systems.

“We’re going to open over 500 stores in our business this year, and we’re saying we’ll have 4000 stores within just two and a half years and 5000 within a six-, seven-year period and that’s because of the constant investment that we’ve been doing,” he said.

Domino’s shareholders can also expect to receive higher dividends, with the business saying it would increase its payout ratio to 80 per cent, up from 70 per cent, recognising its “new phase of growth”.

The company will pay shareholders a final dividend of 85.1 cents per share on September 9, bringing the full payout for the year to $1.73, nearly 50 per cent higher than last year.

Growth continued through the company’s rapidly expanding international markets, with sales in Japan spiking 30.9 per cent and European revenue gaining 23 per cent. Sales in Australia, where the business has the majority of its stores, grew 6.5 per cent to $1.3 billion.

Sales for the start of the new financial year have also stayed strong, gaining 7.7 per cent across the business. Domino’s also announced a new program focused on increasing profitability for franchisees by lowering food costs, dropping fees and providing targeted incentives.

Mr Meij said this push was needed to help the company reach its targets for new store openings, noting that franchisees tended to open more stores as their existing locations became more profitable.

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Dominic Powell writes about the retail industry for the Sydney Morning Herald and The Age.

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