Irish investment prompts Domino's Pizza to expand

Domino's Pizza plans a strong expansion of home-delivery pizza outlets in Ireland so the group can exploit the potential of its…

Domino's Pizza plans a strong expansion of home-delivery pizza outlets in Ireland so the group can exploit the potential of its new production and distribution centre in Dublin. The new centre, which opened last year to service nine outlets, cost £500,000 (#635,000). Although sales per outlet in Ireland have been better than at comparable UK units, the group's Irish activities suffered losses last year of £200,000 on turnover of £2.5 million, partly due to unrecovered fixed costs of the new production and distribution centre.

Mr Stephen Hemsley, chief executive, said the Irish operation would reach breakeven through an increase in outlets, possibly to around 15.

New openings are expected before the summer, with further openings planned for later in the year.

"We have made a significant step-up in the fixed costs of our Irish operation by opening our own production and distribution centre and we now have to recover the fixed overhead costs by increasing our pizza sales," he said.

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"We can see the potential for having around 30 outlets in Ireland."

Year 2000 financial results of Domino's Pizza detail a 62 per cent increase in pre-tax profit to £2.2 million sterling on sales up 20 per cent at £63.5 million sterling.

Trading at the outset of 2001 has been "buoyant" and Mr Hemsley is forecasting continued "strong performance" in the current year.

Total dividend payments are up 12.7 per cent at 0.8 pence sterling per share.