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8037317
Wednesday, August 14, 2013
Page : 28
Section : CML-News
Edition :
Region : Qld Metropolitan
Domino’s buys slice
of Japanese pizza
SOPHIE FOSTER
QUEENSLAND firm Domino’s Pizza Enterprises has
made its biggest purchase,
spending $235 million on a
deal that in one swoop adds
more than 250 Japanese stores
to its list.
The Brisbane-based firm
agreed to buy 75 per cent of
Domino’s Japan for $135 million and provide the balance in
new debt funding for the operation.
Domino’s shares, in a threeday trading halt since just before
the
announcement,
currently sit at $11.82. The deal
will be funded by a five for 23
entitlement offer to eligible
shareholders at $10.20, which
Domino’s said was a 12.6 per
cent discount to Monday’s
dividend adjusted share price.
Founder Don Meij said 259
outlets in Japan were involved,
but that number had grown to
263 since the deal was struck in
July because another four
stores had since opened.
“The acquisition represents
an exciting opportunity to
leverage our proven track record of successfully growing
the Domino’s network to deliver shareholder value,” he
said.
“Japan is a strategic location for Domino’s Pizza Enterprises future expansion,
providing access to a large
market which is well suited to
significant new store rollouts
and the relocation of stores to
higher traffic locations with
improved image and formats.”
He said some Australian exld b
l d
pertise would be involved in
looking over the Japanese operation but “the great thing is
(Japan’s) got a great team
that’s already got a great track
record”.
The firm had “come a long
way”, he said, but was still on
the expansion track. “We’ll
have 1233 stores now and will
add another 110 stores.” These
will be spread through Australia, New Zealand and France.
Morningstar analyst Nathan Zaia said “Dominos again
met expectations” and continued to grow.
For the year to June 30 net
profit after tax rose to
$28.7 million, off total network
sales of $848.6 million. Underlying earnings before interest,
tax and depreciation rose
16.2 per cent to $55.9 million.
“Those with the misconception this is a mature business
really need to think again,” Mr
Zaia said.
“Double digit revenue and
earnings before interest and
tax (EBIT) growth in this economic environment speaks volumes of the brand and
marketing strategy.”
By going with a 75 per cent
interest in Domino’s Pizza Japan, the firm was “putting its
capital where it can leverage its
experience and success”.
“The Japan business currently has 260 stores compared to 585 in Australia and
New Zealand, so there appears
to be plenty of upside in terms
of rolling out new stores.”
Domino’s shares reopen for
trade on Friday morning.
EARNINGS
AUST & NZ
$41m
64%
JAPAN
$21m
33%
EUROPE
$2m
3%
Earnings before interest and tax
b
h
b
h d
Source: Domino’s Pizza Enterprises
d
f
f ll
i
Copyright Agency Limited (CAL) licensed copy or Copyright Act 1968 (Cwlth) s 48A copy
Courier Mail
Wednesday, August 14, 2013
Page : 28
Section : CML-News
Edition :
Region : Qld Metropolitan
AN EXTRA PIECE
75%
Stake Brisbane-based
Domino’s Pizza Enterprises
will buy in sister company
Domino’s Pizza Japan
$235m
Total amount it will pay
for the stake
$156m
Amount funded through
an entitlement issue
25%
Stake Bain Capital will
retain in Japanese company
for at least three years
$28m
Domino’s Pizza Japan’s EBIT
in 2013
259
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“The acquisition
represents an exciting
opportunity to leverage
our proven track record
of successfully growing
the Domino’s network’’
DON MEIJ
Number of stores Japanese
company owns, including 43
franchised stores
600
Target for store numbers in
Japan, rolling out up to 50
stores a year
2031
Year Domino’s Japan’s
franchise agreement expires
with US-based Domino’s Pizza
Copyright Agency Limited (CAL) licensed copy or Copyright Act 1968 (Cwlth) s 48A copy