Domino's Pizza Group Reports Mixed FY25 Results: Revenue Rises but Profits Fall, Dividend Up 3%

Debt headroom looks comfortable: £600m of facilities with £287.0m undrawn at year end. Average interest on debt (ex-IFRS 16) was 6.3%, and guidance for FY26 underlying interest is around £21m.

The Board proposes a 7.7p final dividend, taking the year’s total to 11.3p (+2.7%). In my view, raising the dividend while profitability falls signals confidence in steady cash conversion and the medium-term plan – but it does leave less room to delever quickly if trading softens.

Strategy for FY26: a back-to-core plan with chicken front and centre

Management is focusing on four priorities in 2026: grow revenue through the core, grow the addressable market, accelerate digital and drive operational efficiency.

CHICK ‘N’ DIP rollout and loyalty

• CHICK ‘N’ DIP launched nationally on 9 February 2026 after a strong trial. It’s fulfilled through existing kitchens and delivery – low incremental capex and operationally complementary.
• Trial data suggests the chicken range is largely additive: over 80% of CHICK ‘N’ DIP orders were placed alongside pizza, supporting basket size and frequency.
• The loyalty programme has moved to a second-phase trial with around 3 million customers invited, showing order uplift across all frequency cohorts. Full rollout plans are “to follow”.

Digital and delivery performance

• About 8 million customers now use the app, representing roughly 75% of all digital orders. The data flywheel is a clear focus: richer insight, more targeted offers, better upsell.
• Delivery times improved to 24.3 minutes (2024: 24.5 minutes) – still a meaningful edge in a convenience-led category.
• Aggregator reach continues to expand via Just Eat and Uber Eats, adding incremental demand.

Supply Chain Centre 5 and automation

• The new Avonmouth Supply Chain Centre is due to start operating in H1 2026, adding capacity for 1,000 deliveries a week and shortening distribution legs.
• Automation projects are underway across de-boxing, storage and picking, and dough production robotics – the aim is to offset inflationary pressure and support margins over time.
• FY26 capex is guided to around £35m, primarily to complete SCC5 and progress automation.

Market share and estate: gaining ground despite headwinds

DPG continued to gain share in 2025. Its takeaway market share improved by 0.3 percentage points to 7.3%, and its UK pizza takeaway share rose 7.5 percentage points to 52.6%. Store openings of 31 were “slightly ahead” of revised expectations, and the estate stood at 1,399 stores at year end.

Ireland remains a structural growth opportunity: Domino’s is the number one pizza delivery brand, with over 100 potential white space stores, a 79k population per store versus 53k in England, and a national supply chain already in place. DPG lifted its stake in Victa DP to 70% in March 2025 and to 80% post year end (30 January 2026) for £4.0m.

Guidance and what to watch in 2026

• Underlying EBITDA is “tracking in line” with current market expectations.
• New store openings expected to be similar to 2025.
• Technical guidance: D&A in the mid-twenties £millions, underlying interest around £21m, effective tax rate about 25%, and capex circa £35m.
• Christmas momentum continued into the first nine weeks of 2026.

My take for investors: the good, the bad, the watchouts

Positives

• Cash generation held up well – £84.6m free cash flow before non-underlying items backs the 11.3p dividend and investment in the network.
• Clear strategy centred on the core with tangible levers: CHICK ‘N’ DIP, loyalty, digital personalisation and supply chain automation.
• Market share gains and faster delivery times underpin brand strength.

Negatives

• Underlying EBITDA decline reflects supply chain margin pressure and softer orders, especially in H2 delivery – the core profit engine needs stabilising.
• Non-underlying hits, notably the £10.4m Shorecal impairment, highlight the risks of Ireland’s structural labour changes.
• Leverage at 2.26x is within range but toward the top, limiting optionality if trading weakens.

What matters next

• Evidence that CHICK ‘N’ DIP and loyalty trials drive sustained basket size and frequency, not just launch pops.
• Proof that SCC5 and automation can ease cost inflation and rebuild supply chain EBITDA through 2026.
• Order trajectory in delivery versus collection as the consumer backdrop remains challenging.

Overall, this is a mixed but steady set: modest top-line growth, profit pressure that is explainable, and strong cash generation funding a rising dividend. If execution on the 2026 priorities lands – particularly chicken, loyalty and the supply chain efficiency push – there is a credible path to rebuilding earnings while protecting cash returns.