Domino’s pizza franchise reports big jump in profit

Shorecal says Covid-19 pandemic is holding back trading as it reports profit of €10.5m

Pizza group Domino’s saw profits jump by 19 per cent at its largest Irish franchise. Photograph: Jason Alden/Bloomberg

Pizza group Domino’s saw profits jump by 19 per cent at its largest Irish franchise. Photograph: Jason Alden/Bloomberg

 

Pizza group Domino’s saw profits jump by 19 per cent at its largest Irish franchise in the first year of the Covid pandemic, even as directors complained that the virus had held the business back.

Shorecal, which operates about 30 of the 86 Domino’s outlets across the country, said the pandemic “had a negative effect on trading activities” in 2020.

Turnover in the year to December 27th, 2020, was 3 per cent ahead at €55.26 million. But pretax profits jumped to €10.5 million, almost 20 per cent of the €8.8 million earned in 2019.

The Republic accounted for just over two-thirds of sales, with the balance coming from Northern Ireland. Employee numbers slipped slightly to 516 last year from 543 in 2019.

Reporting on the company’s outlook when the accounts were signed off in September, directors said: “The Covid-19 pandemic continues to have a negative effect on its trading activities since the year end and has resulted in a lower than expected level of trading activity since the Covid-19 virus spread nationwide.”

A dividend of €8 million was paid to the company’s shareholders earlier this year.

‘Gig economy’

The business is majority owned by the Belfast-based Caldwell family. Domino Pizza Group, the listed company that runs the pizza chain in Britain and Ireland, took a 15 per cent stake in the business in 2019 for €12.5 million. The Bronfman family from the US, whose wealth was originally derived from Seagram whiskey, also owns about a third of the business.

The company said it is awaiting a Court of Appeal ruling on its challenge to a tax assessment that one of its businesses wrongly treated its delivery drivers as self-employed independent contractors. The case was heard last July.

The Revenue argued the drivers should be treated as employees for tax purposes. Shorecal’s Karshan (Midlands) business has subsequently lost appeals to the Tax Appeals Commission and the High Court in what was the first “gig economy” ruling from an Irish court.

The case dates back to a 2014 Revenue assessment on Karshan’s tax treatment of its delivery drivers in 2010 and 2011.