Cape Town - South African-based management group Taste Holdings [JSE:TAS] said on Tuesday its 23 Domino’s Pizza outlets, which recently opened in South Africa, have exceeded expectations.
Releasing the final results for the year to February, Taste CEO Carlo Gonzaga said the first six Domino's Pizza outlets were launched at the end of last year and by mid-May the group had 23 branded outlets trading, with 32 planned to be open by the end of May.
Taste boosted core revenue by 25% to R723.7m and core operating profit to R58.1m - compared to R49m in 2014. Core headline earnings per share rose 3% to 16.1c while the dividend per share increased 5% to 6.5c.
Core headline earnings rose 17% to R36.1m - compared to R31m in 2014.
System-wide sales rose to R1.58bn. During this period, Taste successfully launched Domino's Pizza, acquired Arthur Kaplan Jewellers and World's Finest Watches, acquired and integrated the Zebro's Chicken brand and acquired eight NWJ stores from franchisees. The Zebro's Chicken acquisition complemented The Fish and Chip Co brand in its consumer offering.
Gonzaga said during the period under review, the group began implementing an ambitious five-year growth plan broadly focused on leveraging existing capabilities across its food and luxury goods divisions.
Last year Taste signed a 30-year exclusive master franchise agreement to develop the global Domino's Pizza brand in South Africa and six other countries. The group has invested R55m in building two dough factories - in Midrand and Cape Town - to support its growth over the next decade, both of which are operational and have been built in record time.
However, Gonzaga said the commitment to effectively launching the brand was already translating into recognition with Taste recently winning three awards from Domino's International.
Looking ahead, Gonzaga said management anticipated the weaker-than-expected sales performance of the fish category to continue. The better-than-expected sales in Domino's Pizza and the accelerating rate of franchisee interest for both new openings and conversions would mitigate the slowdown in sales across other pizza brands until they were fully converted.
Load shedding was among the group's top concerns, but Gonzaga said management had identified opportunities in line with its strategic intent and was confident some would materialise in the current year.
By early afternoon Taste's share price was up 3.28% at R3.46.