Domino’s Pizza Enterprises (ASX: DMP)
For the first half of FY 19, the company has reported 12.1% growth in the Underlying EBIT to $108.3m on the back of 14.6% rise in the global food sales to $1.43 billion. However, for 1H FY 19, the company posted 6.2% decline in Statutory EPS with 12.4% rise in Underlying EPS. During the first half 2019, there has been 14.6% rise in Network Sales & 16.5% rise in Online Sales. There were 77 stores added during the period, in which in Europe the company crossed the 1,000 Domino’s branded stores and 300 Domino’s branded stores in Germany. Japan performed well in the 1H 2019 as it posted 34.3% growth in EBITDA on the prior corresponding period. Moreover, in the first seven trading weeks of H2 FY19, DMP has reported 4% pcp rise on a Same Store Sales basis, when the company constructed and opened 13 new organic stores for trading.
For FY 19, DMP expects Same Store Sales to be within its guidance and expects to be at the mid-to-lower end of the range 3-6% range. The company expects 2019 EBIT to be at the lower end of guidance range of $227m-$247m. Further, the company expects less store openings in the second half of FY 19. The company expects the building of new store builds to be also slightly lower than originally projected, expected to be in the range of +200 – +215 organic new stores, which means the company’s store growth to be in the range of 7-9% growth each year. Net Capex for FY 19 is projected to be in the range of $60-70m, that comprises of the benefit on the back of the continued sell-down of the Franchisee loan book.
The stock has been on correction since 7 Feb’19 (Day’s High of A$47.850) to currently trading at Day’s Low of A$41.040 as on 15 March (2:15 PM AEST). Investors may keep the stock in watch list to see any possible rally.
FY 19 Group Guidance (source: Company Reports)
Collins Foods Ltd (ASX: CKF)
For the first half of FY 19, the company has reported 27.6% increase in the revenue to $411.0m, 31.7% increase in Underlying EBITDA to $53.7million & 25.9% growth in Underlying NPAT to $21.9 million. There has been 42.9% increase in Statutory EBITDA to $53.6 million & 69.3% increase in Statutory NPAT to $21.5 million during the 1H FY 19. The net operating cash flow increased by 31.6% to $35.8m during 1H FY 19. There is a slight fall in the net debt to $226.2 million in 1H 2019 versus $227.2 million as on 29 April 2018.
Moreover, Taco Bell is undergoing significant expansion with the opening of second Taco Bell restaurant in Queensland and the company expects to open 10 Taco Bell restaurants in CY 2019. CKF has inked a deal with Taco Bell, which is a subsidiary of Yum! Brands Inc., for building 50 restaurants in the next three calendar years. The restaurants will be opened in three states, Queensland, Victoria and Western Australia, and its expansion will be funded from internal cash flows.
Additionally, the company plans to open a total of eight KFC restaurants in Australia by the end of the FY 19. The company plans to substantially increase the size of the company’s home delivery network in the upcoming six months in Australia. Further, in In Europe, CKF is planning to open two new restaurants in the Netherlands before the calendar year ends.
CKF has offered a YTD return of 9.65% as on 14 March’19. The stock is currently trading at A$6.520 (15 March’19, 2:20 PM AEST). The investors may possibly eye if there is any upward trend in near future, given the recent correction in past 2 days.
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