Domino's Pizza Group plc ($DOM)

Hello, everyone, and thank you for joining the Domino's Full Year results. My name is Claira, and I will be coordinating your call today. I will now hand over to Nicola Frampton, CEO of Domino's, to begin. Please go ahead.

Thank you for joining us. I hope you've all seen our update from earlier. I'd just like to say I'm really pleased with our 2025 results. It was a very difficult start to the year, but I think a really solid finish. I hope you all agree, given us a lot of confidence and belief and momentum into 2026. So on that note, I'll probably ask Michael to start with the Q&A. Michael?

Yes. Douglas Jack with Peel Hunt. In terms of the people ordering, you've got 8 million app users and they're ordering 4.5 -- 4.3x on average. To what extent are you seeing the loyalty members, the 1 million ordering more often than that? And how quickly is the loyalty program being rolled out? That's the first question.

Thank you. So loyalty, we've obviously been taking loyalty very, very steady over the last year just to make sure that we don't make any big mistakes in the loyalty program -- big cost of mistakes because loyalty programs can also be quite expensive. But to your point, Doug, app -- our customers typically order [ 12 ] times a year. And so actually, loyalty takes some time to build up. It's probably going to be a slow burn to about 18 months before we can give you any real indications of what the loyalty program is doing for that reason. I think we'd probably be better off giving an update towards the back end of the year just in terms of how it's doing. And also by then, we'll be in a position to talk a little bit more about the enhanced functionality that we're bringing along with that in terms of increasing our customer acquisition capability as well.

Great. So two other questions. Your energy costs, obviously, we're seeing a lot of volatility in the market. How far into the future are you hedged on energy? I know if you've got any exposure to what's going on.

Do you want to take that?

Yes. I mean the key energy costs are obviously diesel, gas, we're hedged more than 12 months ahead. Okay. And obviously, we do a deal for the entire system. So there will be other franchisees in our system that will have taken advantage of our hedging arrangements, too, if they haven't made their own.

We're also in a good place in terms of product pricing, Doug. So we're reasonably well insulated in terms of the things you can anticipate might play out over the next few months.

That's great. And then just the last question. Are you seeing new franchisees joining the system? I think a couple of years ago, you started to move towards that process and to what extent people are asking, what kind of multiples of EBITDA do stores change hands at or multiple of sales, if that's any help.

Yes. So I'll take the new franchisees question, if I may, and then maybe Richard can talk about the multiples. But we started the homegrown hero program a couple of years ago. You may remember with a view to bringing new franchisees into the system. We ended up with a list of potential candidates longer than we could actually manage. So we paused the program. But we do have five homegrown heroes in the system, effectively new franchisees. And two of them are actually in the process or have already opened their second store, which was really what the homegrown hero program was all about. So we're very pleased with how it's going. But obviously, it's early days in terms of seeing that program build out any further.

Yes. I mean, Doug, in terms of change of hands, predominantly when the transactions Nicola has been talking about is homegrown heroes, people who have taken one or two stores. So there have been limited change of [ hands ] deals since I've been interim CFO. I've heard no squealing about the prices that have been paid, but I'm going to go and check what the answer is and then just see whether we are allowed to give you a directional share on that. But I have not heard of any major leg down or leg up in terms of the multiples. Franchisees tend not to look at EBITDA multiples. They tend to look at the revenue, revenue opportunities. I hope that's a fair answer.

It's Tim Ramskill from Bank of America. I have a few questions. I'll go one at a time as well. I guess in your presentation that you shared online this morning, you kind of indicated kind of the share gains that you've enjoyed in the pizza market. But at the same time, the market by that math looks to have been declining by 13% over the course of the last 12 months, which is pretty dramatic. Just interested in your thoughts on the dynamics. You talk a lot about the consumer being under pressure, which I guess we all recognize. But to what extent are there other sort of more structural factors at play driving such a material reduction in the size of the market?

It's -- look, I think you're right. The pizza market is not growing, Tim. That's for certain. But I don't think it's necessarily right for us to conclude that it's structural as yet. Pizza is a very flexible product in terms of being able to respond to changing consumer demands and what have you. If you look at what's going on in the wider QSR market, this has returned to growth, indicating that there is a shift in consumer dynamic back to the sector more broadly. And I think what we're seeing is that in that brider market, the encouraging signs, I think, could flow through to pizza. So I don't think we will ever move away from saying pizza is not at the heart of our business. It absolutely is. And we continue to innovate and continue to bring out new pizzas. We've got Italian's coming out in April. We've got some new things coming out towards the back end of the year that are all effectively pizza related. And when the market isn't growing, you need to grow your market share. And what I would like to point out is that's what we've been doing very, very successfully in terms of our market share grew by -- numbers on the top of my head, 6% over the last year, just taken us to over 52% of the total pizza market. And it's also the reason we're looking to expand our total addressable market in terms of looking at wider opportunity, say, in the broader QSR system that can complement what we currently focus on to help give us another string to our growth, so to speak.

Leads nicely on to my next question, which is around, I guess, the CHICK 'N' DIP launch. You've obviously referenced the 80% attachment rate to sort of pizza alongside the new CHICK 'N' offer. Maybe you could just sort of help us understand some of what you're seeing. I realize it's early days, but where there is that attachment, is that sort of substituted for other product? Or is it helping actually grow that specific basket size? And to some extent, I'm a little bit more interested in the 20%, right? So is that totally new incremental sales? To what extent does your data, your app data, your loyalty data tell you anything about that sort of stand-alone CHICK 'N' ordering?

Yes. So I think the first point you made, Tim, is the key one. It's very, very early days. We ran a trial last year. That trial was actually very encouraging in terms of the customer behavior that we saw, but we've only launched the product across the entire system on the 9th of February and really went above the line on the 23rd. So I caveat what I'm about to say with that piece of information to be fair. Look, I think, first off, 83% of the baskets do have pizza in them as well. But within that, I think your question is, does it cannibalize other products? No, we don't believe it does. The majority of those baskets, not all, again, I'm using generalizations at this stage so we can bring you proper analysis. The ticket is significantly higher than the average ticket of the pizza-only orders that we were previously seeing by a significant amount, which suggests that actually what we're doing with those orders is seeing customers come to us who wanted chicken and pizza, and we have bought it separately on an aggregator platform and now buying both of those items from us on Domino's because certainly the price sensitivity seems to be very, very different. So that is really encouraging for us. The other thing that we're starting to see, and this is, I suppose, to an extent, new news, because we've -- as I said earlier, we've only just gone above the line. But as we have gone above the line and to your point about the remaining 20%, a good chunk of those were new customers to us, customers that we haven't previously seen before that have come to us in response to our chicken advertising. So again, it's early days, but I think it's very encouraging just in terms of it's bringing another consumer to us. First indications are that a lot of -- not all, but a lot of those consumers are what we would call Gen Z or Gen Zillennials that have become known in Domino's. It's a little word for them. And again, they're giving us very high customer satisfaction feedback on the product, and it's very much aimed towards that generation. They're also a generation of probably more protein aware and really interested in that sort of white meat product. So I think all around, it's encouraging. I mean the whole concept behind CHICK 'N' DIP was partly -- I talked about the call before, but partly about getting customers to come more time, additional occasions for customer. Our customers typically shop with us four times a year and they're having pizza on a Friday night as a family. If they then have chicken on a Friday night, a few weeks later and they come and get that from us, we're growing the occasions with segments that we've already got. But then obviously, the other aspect of that was to grow the customer base. And this looks on certainly on the face of it at this stage, Tim, to be capable of doing that for us too. I think we'll have more for you probably towards the half year.

I mean there's a dip story as well, isn't...

There is a dip story. I should have mentioned the...

People are -- it's a new flavor event. So obviously, the iconic garlic sauce we'll love. People are buying dips with their pizzas. And it's another reason for coming to us instead of coming to our competitors. It's just differentiated and it's working. It's just interesting. It's not what we expected from the trial seeing how well that's gone there.

I think that kind of plays a little bit back to your question on the sort of pizza category as well. There's more, I think you can do with pizza around flavors. There's an infinite number of toppings and dips that you can put with the product to make it interesting. I think it's just running on the right one. But as Rich has quite rightly reminded me, we're seeing some brilliant incrementality across dips, actually more significant than chicken in some respects.

Brilliant. And my last one is just around capital returns. I guess you've sort of chosen today to increase the dividend, obviously, ahead of where the earnings trajectory has been. There was a small bit of buyback activity during Q4. But maybe just -- and again, totally aware and appreciate there's a new CFO sort of starting on Monday, but just, just your overall framing and thoughts around that balance of capital returns between buybacks and dividend and the sort of willingness to move the dividend payout ratio a little bit higher.

Richard?

The dividend increase is obviously a reflection of the Board's confidence in the strategy Nicola set out and the focus on the core and the opportunities that are there. One of Andrew's tasks, many tasks when he joins and we've been pretty close over the last six months is to review, as we've said we would, the capital allocation structure. In reality, if you look at consensus in the market this year, the CapEx that we've laid out, particularly getting SEC 5 done and the fact we're currently positioned towards the upper end of our range. If you look at our old, old capital, we'll call it old capital allocation framework, there isn't significant room, significant keyword for buybacks in let's make it next 12 months. That might be a different conclusion by the Board might be a different conclusion for Andrew, and I'm going to leave it open to them. I think there'll always be a place for effective use of capital in Domino's and for capital returns at the right point. I think that's probably -- if you've got any follow-ups on that. I think that's a fair summary. And I'll be very interested to see the conclusion that the Board and Andrew and Nicola come to.

I've talking to the Board about it already, the Board is very keen to be very clear, but we also need to let Andrew come in and contribute his thoughts and ideas before we actually give any feedback back.

It's Anubhav Malhotra from Panmure Liberum. I've got a few, if you don't mind. Let's start with the new store format that you have launched, 720 square feet, a smaller format. Just maybe tell us a bit more about where you see opportunities to grow, how much that can grow? And what part of your new store increase objective for the next couple of years does that store format form part of?

Yes, sure. Thanks for the question, Anubhav. The pods that we opened in Wellington was developed with -- in collaboration with Motor Fuel Group with a view to sort of looking and exploring opportunities to get into some of their overserved real estate space. We did that principally for -- the main reason was actually availability of affordable real estate on the high street in the typical places that we would go. That was the main reason for doing it. But as we explored the pod and we worked with Modular 500 who have partnered with us on the construction, what we've realized is that there's also quite a significant opportunity for us to reduce the cost to build and cost to serve because it's a lower CapEx model, particularly where you get landlords -- and as Motor Fuel Groups indicated who are willing to do the CapEx of the build of the pod in the first place. So I think we've got the first one open. It's operating really well. It's performing well. We're not seeing any -- it's running on a standard format, the traditional Delco, if you walk inside, it doesn't look any different to Domino's store because that wasn't one of its primary objectives. It's performing well, and we anticipate maybe another two or three into 2026 out of the portfolio of stores could be in that format subject to the obvious challenges of the space but also the planning commission. They have exactly the same planning commission requirements as a traditional store. So it doesn't help us from a planning point of view at all. However, sort of just going back to, I think, where do you see it popping up going forward? We are -- we have indicated that we are exploring, again, it goes back to sort of how do we increase our addressable market. So what are the types of occasions that we can further explore. And obviously, talking to Motor Fuel Groups has got us thinking about travel retail. We've been there before. It didn't work. But obviously, in the days of electric vehicles, longer dwell times, et cetera, sometimes it's the right idea, not necessarily the right place. So I think travel retail potentially is an area we would like to explore as well as the sort of shop-in-shop opportunities that you see, particularly in venues like train stations, which again is aligned to travel retail. So what the development team is doing essentially is continuing to -- we've now got effectively a blueprint in the pod. And now we're working how do we get that down in size. So we've got a unit at the moment that's at 500 square feet. It's tiny. That will require some changes to the operating model, and it will bring in -- it will require labor efficiencies, but will also bring in both labor and CapEx efficiencies. And it's early days. So I wouldn't like to give a number on how many of those we will get. So at this stage, I'm not giving lots of guidance on new store openings because there's so many of the factors these days that affected this last year, sorry, '25 was very much impacted by the National Insurance threshold and the impact that, that has on store profitability and therefore, variability of sites and dispatches being generally sensitive, coupled with, again, the availability of real estate, the cost of real estate and then the planning requirements. So lots of things for us to consider. So we expect this year to be -- I probably -- if I was going to give any guidance at all, and I'm trying hard not to, it will be around '25. But I want to make sure that we meet or exceed that in the way that we did when we reguided you all on the 2025 number.

We don't need those formats to deliver those numbers. But in the long term, maximizing our opportunities will be great.

That's absolutely right. We've got a pipeline and by pipeline, I mean, identified physical sites that are at different stages of negotiations with landlords and planning, but a number significantly in excess of '25. So we're very confident in the number for '26 being broadly what I've indicated.

Next one is on the CapEx that you've guided for this year. So the extra CapEx this year is going into the supply chain center. Just maybe looking forward and thinking of a more normalized run rate of CapEx, how should we think about that, especially how far ahead are you with your automation projects if those are mostly complete or there's more to go? Just more guidance.

So look, again, you go back to Andrew Andrea's review of capital needs of the business, returns opportunity, balance sheet, et cetera. But in the presentation, which I'm sure you've all watched and listened to closely, I talk about it returning to more normalized levels. Clearly, that means lower in '27 than this year. I think the SEC 5 numbers in aggregate, looking at automation and that across the supply chain, but not maintenance at GBP 20 million. And obviously, there will be some more automation projects in '27. I'm sure that Pete who is here has a list of those that we've discussed. But I think '27 will be above probably similar to the current year and then it should be reduced, subject to opportunities that the team identify the returns we can generate, the new store opening opportunities that come with Shorecal and Victa. So I'm giving you a trajectory rather than precision, because I'm pretty positive about the Irish market. And I think we've got a real store opening opportunity there.

And just one last one. I know you would be asked this many times before with GLP-1, the impact of that, potentially, if you could maybe describe that impact from the point of view of maybe your best consumers out there. Have you been tracking their consumption and seeing maybe a reduction in frequency amongst your best consumers, those who are ordering 8 to 10x...

Before we answer 23 kilos, and I had a large double pepperoni, jalapeno pepper pizza. Nicola, you give the real answer. I just wondering the impact of GLP-1, they are still eating at least 4 times a year.

I think it's a good -- I don't really know how to follow that.

I think you follow the fact of what we've seen as opposed to the benefit of one pizza fan.

What I would say is, i.e., a lot of our pizza, and I don't have a problem or requirement for GLP-1. I don't think our product -- I mean, as I said earlier, our customers, I think you made the point yourself, but on average, order pizza 4 times a year. So GLP-1 isn't having any form of structural impact on our business whatsoever. We're very, very different to that sort of weekly lunchtime spend. Even with, I would say, with the most loyal customers, we're not seeing any -- I would say in terms of what we see in our database, and you can't say whether it's GLP-1 because unfortunately, they don't tell us whether they're taking the drugs or not. But I would say that in our core customer base, the frequency is going up, right, which again indicates that GLP-1 is not a factor in affecting Domino's. That said, I think -- and again, I think you saw it in my presentation, you can't ignore it. I think increasing numbers of households will have at least one GLP user potentially going forward, particularly when it goes into the tablet form. And we've always innovated with an eye on the future and with an eye on consumer trends. And I use the term trends loosely. I'm not suggesting it's a trend or a fad, but it's a change in how consumers behave and what they want to consume. So a significant part of what we do with our product innovation is making sure that we've got a very broad range on our menus that can suit all of the diners, whether it's a low appetite, small portion that's heavy veg loaded. I mean we're right the way down to loaded veg at 200 calories. But equally, you might have that GLP that wants that small portion, but then the rest of the family want a pepperoni passion. That is also then available for them to order in a range of sizes to suit their family appetite. So I think for us, we're just making sure that GLP-1 and all of the food preferences are being taken into consideration as we do all of our product innovation.

Katie Cousins, Shore Capital. First of all, could you just tell us where we're at with food basket inflation for the year ahead, please?

Do you want to take that?

Well, what we said to the franchisees. -- happy to say that in terms of our supply cost then for food. We've done a really good job.

We have done a really good job. So our food costs for 2026 franchisees year-on-year are lower than they were in 2025. And that's largely a result of what's been going on in the milk market with cheese. So we're in a really good position from that point of view. I'm not going to give any more detail in terms of the financials around that. But I think we've been able to signal to franchisees a very strong food price benefit. And as I said earlier, a lot of that is locked in for a longer-term contracts with suppliers that also insulate us to an extent from any sort of freight risk and what have you. So from that point of view, I think we're in a really good place, and I think it will help franchisees make sensible pricing decisions into 2026.

Okay. And then from your comments earlier, is it fair to assume now those medium- to long-term store rollouts, so I think it was 2,000 stores and GBP 2.5 billion of system sales is now all under consideration, so then we shouldn't really...

I think the aspiration is correct. I think we talked about it -- I think we initially started talking about that number in 2024. And clearly, quite a lot changed structurally for us in the sector. So I think we look at our white space. I think it is achievable and it's achievable with the Domino's format. That we've got now, but we'll also need some development on new. So talking earlier about the travel retail opportunity. That's the way we get to 2,000. So really, it's about making sure that we go at the right pace to grab the right opportunities. I also think we don't know yet what CHICK 'N' will do more broadly to the store's overall P&L. And ultimately, then what that does to the viability of the white space across the rest of the U.K. and it is likely, but I can't make any promises at this stage, Katie, that it could bring some of those to maturity a little bit sooner than we thought. A lot have been pushed back because of that massive national insurance and labor burden and it would bring those forward. So the ambition is right. It's an achievable target, but I don't think it will be in 2033.

And then final one. I haven't seen a franchisee margin this time. Normally, there's a table in the presentation.

The franchisee profitability we didn't put in there. But last year, I think they made GBP 161.6 million -- sorry, GBP 1,000 per store on average.

Yes.

We shared that with them this morning, which is why it didn't go into the presentation because we presented.

We can put that information for you. I missed the fact that if we normally provide it. But franchisee profitability did decline by about 4% year-on-year. However, what I would say, Katie, is that, that is significantly ahead of where we thought we were going to land at the beginning of 2025 with them. We were looking at a reduction of probably 20% to 25%. And in terms of the work that's been done around food pricing, around reducing some of the other consumables that they buy from us in terms of leaning into labor productivity through invest -- we've done some investment in labor scheduling and sales forecasting using AI. We've increased the productivity of the teams that are working. We've reduced the amount of manpower that's actually required. And so we ended up -- I think the original estimate of the burden of both the national insurance threshold and the general national living wage is about GBP 36,000 per store. And I think we've mitigated to 20,000 of that through multiple initiatives, which is significant. So we've gone back 4%, not where we want to be, not where the franchisees want to be. But I think what I would say is we'll go back to growth in 2026 if you look at where we've guided. And I'm also talking to franchisees regularly who are also feeling that their mood is really important. Franchisee mood can really make a difference to how the whole system shows up to the consumer. They're feeling very positive. They're also seeing the positive results that we've seen from the early release of CHICK 'N'. They've obviously heard about the food cost decreases. So I think we will see that momentum in terms of profit growth for them and for us start to get back into the shape we want into '26.

Ross Broadfoot from RBC. Two, please. I'll go one at a time. The first one, you've obviously been present on the aggregator apps for a little while now. And previously, the group has talked to incrementality from that presence. Could you give any color on how many new customers you think have come through that channel? And any commentary on conversion to the app? And actually, I'll give the second one straight away. Second brand, you've obviously stepped away from that a bit this morning. Is that just a waiting for new CEO comment? And second part of that, is that disappointing for the franchisees?

Okay. Let me start. I can answer some of your question on aggregator, but probably not everything that you were scratching out, Ross. So we might need to get back to you on some of the points and [ Sarah ] is here. So I might ask Sarah over the CHICK 'N' later to perhaps give you a little bit more color. Nothing has changed in terms of what we're seeing on the aggregator platforms in terms of incrementality. We're running at about 75% roughly. That's how -- roughly where we calculate it. Aggregators about -- account for about 8% now of our orders, 12% delivered. So it's significant, but not a massive proportion of the business. I think the interesting thing is the profile of the consumers that are coming to us on the aggregator platform are typically more affluent and typically shop using aggregator platforms. So they are customers that we wouldn't have access to if we weren't there. So I think to me, now aggregators is table stakes. It's a part of how we show up. We've seen some real strengthening of our core consumer database, the loyalty consumers are really doubling down. We've got fewer of the one and gone in that database because more of them, I think, are coming through from the aggregator platforms. But as I say, when we look at it, and we're very thoughtful on incrementality to make sure that we're not losing customers. It is very high. In terms of seeing them coming to the app, it's pretty impossible to back to us. It's quite difficult to track, partly due to commercial arrangements that we've got with various partners. We probably got a little bit more insight with one than the other. They're a useful marketing tool for us, though. We've been collaborating with Uber brilliantly over the last few months and really seeing some growth, some quality market share growth for us and for them. So yes, that's working really, really well. We've got good commercials with both that we're pretty happy with. But also we're a global brand. We're part of a global business, and there are some great negotiations, conversations going on about global agreements with some of these aggregator platforms that are equally global that I think can drive further margin improvement for the franchisees. So I think we should all accept that aggregators are part of the way a lot of customers shop these days. We should embrace it. We should be present, and we should always have something to offer and attract them. Now then your next question, sorry. I'm learning. I've written down the forgot to look at my second brand. So as we've signaled already, we have no plans whatsoever to pursue a second brand. We have said until a new CEO starts. But even then, it's not a case of we still got something in mind and we've just got to get a permanent person. It's just off the table. And I say that because actually, one of the sort of key ambitions from second brand was to grow the addressable market for our franchisees. And I'll come back on to your sort of final question in a second, Ross, if I may. But we are seeing the potential for a similar level of growth. CHICK 'N' is a GBP 3 billion market. We've got 4% of that at the moment. It's hugely complementary to our business. Why would I want to spend hundreds of millions of pounds buying a chicken brand when actually I've got 1,400 stores, I've got a world-class supply chain. I need no CapEx whatsoever. We're not having to invest anything in the stores. This chicken just goes through all our existing cooking mechanisms, all our existing operations, go through peak supply chain like a dream. Why would I want to spend all that money on a second brand? We've -- I think Sarah's team have done the most outstanding job putting the product together in a way that we've got a really distinctive sub-brand, right? You wouldn't want to walk away from the Domino's brand. Why would you? We were Brand of the Year by the Marketing Society last year. That's what we want above the door. But having that instant recognition that there's also now -- it's a new product. I've seen some commentary somewhere, so it's just chicken, they already did that. They just wrapped it up differently. That's rubbish, frankly. We've got new tenders. We've got new bikes. We've got 7 of the 9 we've got on office, 7 of them are brand new. And they are, as we heard earlier, flying off the shelves. So I don't think we need a second brand, frankly. We needed to grow our market opportunity and our growth potential, but we don't necessarily need to do it through a second brand. So to your point about the franchisees disappointed, no, they're not. They're not at all disappointed because they, like me, are going, right, Nicola, what do we need to do to really exploit this opportunity. We want to go after it. They're so excited about it. And I think that's really where all of our focus and all of our energy and effort is now going because it's a much cheaper way of doing it.

Thank you. It's Hai here from UBS. My first one is on the dynamics of the first 9, 10 weeks when you say good momentum there. Is that still price driven mostly based on the trends we've seen in the past? And why the question is into 2026, at what point do you think pricing will hit the ceiling and you need volumes to come back to meet targets? My second one is just on the apps loyalty. So you mentioned before in the early days of the trial that I think there's a 10% uptick in frequency. Have you seen that with the 3 million customers that you've rolled out with? -- the same trends as well? Is it incremental?

Okay. So the first question about your -- obviously, if I tell you about the first 9, 10 weeks, I'll have to kill you. I really want to do that. What I can say is that it's not price driven and that there's some good order count there, positive order count. Okay. So I think that's probably about as much as I can say right now. So when we get to the trading update after quarter 1, I think I'll be in a better position to give you some answers to those questions. But I would just say that 9, 10 weeks of positive order count is something that I think demonstrates that we are getting very, very back to focus on our core business. I don't know all the answer to your question about the loyalty uptake. I understand it's the same. We've not seen any deterioration in performance 1.8 million customers at the moment on the loyalty scheme as it is today. We've invited more than that, but that's the number of customers that we've got. As I say, they will probably take 12 to 18 months to mature in terms of their behavior for us to take any real analysis as to the impact that it's having. But our view is that it is continuing to be positive and incremental for others.

All the way down because that really matters of pizza champions, that's me, as you've heard earlier, will benefit from joining loyalty and getting extra pizza. It's the people who are less frequent. That's what I'd be most interested as the CFO looking at the data is the incrementality and the benefits happening in these lower frequency cohorts. But as Nicola said, we'll give you some more information. Andrew and Nicola will later this year.

I think towards the end of the year is probably the best time to come back and ask us about loyalty. I think we'll have a lot more analysis and insight for you then in terms of what's happening.

Richard Stuber from Deutsche Bank. Just 2 questions left, please, for me. First of all, just in terms of the chicken market, I think you said you got over 3.8% of the 3 billion market. So that's about GBP 100 million of sales at the moment. Is that also CHICK 'N' DIP? Or is that part of it was some of your existing sort of chicken sales within the sort of Domino's menu? And what percentage do you think you can get to? Obviously, you got 50% in pizza, but do you think you can get to sort of mid- to high single-digit percentage in there? And the second question is just really about new store performance. Any metrics on that? I know historically, sometimes you've talked about some new stores, which are opening with greater average weekly unit sales and sort of lower [ discounts ]. So any color around how new stores are performing, please?

I think, Richard, to your point on CHICK 'N', that market share is from just the existing. That's where we were before the launch of CHICK 'N' roughly. There have been some trial data in there, but we're running about [ 222 ] stores, I think it was.

We're not setting out our market share ambition.

We're not setting out any market share ambitions at this moment in time. It's early, Richard. As I say, it's only been launched full estate 3 weeks ago. We've only got 3 weeks worth of data. And then if you look at the sort of customer behavior and performance and what was referencing before, it's probably 12 to 16 weeks before we'll get our first read on repeat rates and what have you. And I think once we've got that, we'll maybe get a better clue on market share. But I'm sure -- I mean, I could tell you any number on market share, but you're going to ask what Kantar said anyway. So I think let's wait and see what Kantar come back to us with on that as well.

New store performance.

New store performance. I don't have any updates on new store performance than what we've previously guided. I mean the stores that we opened in 2025, not a lot of them have annualized yet because we opened -- 18 of them came through right at the very end, which were a feature of some of the planning and last minuteness of the way the property system works. So it's probably a question for the half year, and we'll bring some more data back on as some of those new stores are annualized because I can talk about 24 stores, but we've already covered those for you.

A couple of follow-ups, if that's okay. It's Douglas Jack at Peel Hunt. You talked about the cost pressures in 2025, employers, NIC and all that. And you're coming into '26 with your food cost lower and your energy locked in. What are you seeing in terms of competitors and their pricing and their behavior in that environment? That was the first question. And the second one was just on the underlying costs. If you could just go through those very quickly.

And which part of which business Doug -- just coming to the second part first, the underlying costs.

Sorry, non-underlying...

The non-underlying costs. Shall I take that at the moment? Do you want to just talk about the competitive environment and how we're seeing the likes of Papa John's and...

Yes. I mean, look, I don't know too much about Papa John's cost pressures or Pizza Hut cost pressures, et cetera, and how they're responding to it. I mean, all I can say, Doug, to be honest, is I'm very pleased to be sitting in this seat and not sat in the seat of the other brands because if you look at that, we're not able in our market share data anymore to share who is who on the fly, Kantar restricted us from doing that. So again, if I told you, I'd have to be killed. So I don't particularly want to do that either, Doug. But I think they are struggling. You can see they're struggling on their share data. And you can see they're struggling in terms of some of their responses in the market around customer pricing, because I think there's a degree of, I don't know, desperation, I suppose, that you can see start to come through. So I think what we typically do is we look at the market environment that we're operating in. We very much look at market share as our bellwether to see how are we doing. We look at our own data to see what's happening in our own customer database to see what the impact of price changes, increases, et cetera, is. And that's really what we get focused on. Not seeing anything much. I mean there's been some narrative around supermarket pizza sales. I mean why would you bother? Why would you bother? -- cheap supermarket pizza, you've got to take home and cook. I don't think it's a comparison at all, and we're not seeing any impact of that on Domino's. As I said, go back to before, we are the family treat on a Friday night. It's not a treat when you've got to cook your own pizza from the supermarket and scrap it off your pizza plan at the end of it. So -- as a working mom, -- so yes, I think that's it. And on the do you want to start with Shorecal and then I'll...

Yes, just to check, are you talking about for FY '26, where I hope that it will be just reacquired rights amortization? Or you want me to run through the 2025 I did on the presentation?

A bit of both.

Okay. Well, if I just run through, there obviously was a good gain on Full House, which is a long-term investment with the partnership [indiscernible] we sold that in December. Transaction completed GBP 17.7 million of cash in, which you'll have seen in the cash flow and the net debt bridge and obviously, a very good gain on that asset. On the flip side, we did have to impact and impair Shorecal. Two drivers of that because it's easy, I wasn't around, the classic wasn't on my watch. In March '24, the environment, the U.K. economy and the outlook was different. And the business plan was put forward, a really good one because I've gone through it the post that review by the team to work out the ambition for that business. We bought the business. Two really big things have happened commercially. Firstly is the November '24 budget, which we all know impacted our and everyone else in the QSR hospitality industry materially. And that has increased the cost of employing people, our franchisees and the Shorecal people and the management running businesses pretty efficiently. We've had to view that as a permanent change in the profitability of the business, and that is one chunk of the impairment. The second was a no known, but the impacts are different. So in the Republic of Ireland, we committed with Revenue Ireland that we transition our contract drivers, delivery drivers and make them full-time employees, that itself had a cost, which was built into our plan and hope for efficiency. What's happened since then is Revenue of Ireland have applied that model to everybody in the industry, and it's driven up the cost of delivery for everybody in the market significantly, and that we viewed as a permanent impact. Store openings have been a bit slower than we perhaps hoped in the first year or so of ownership of Shorecal, but they've been very good in Victa, where we've been involved as joint venture partners. So we've seen that happening. The white space opportunity still looks good. So yes, it's disappointing to impair it. It's about 12% of the carrying value. The other obvious cost is the transaction costs, which is GBP 6 million spent on a number of transactions, which ultimately didn't proceed as we've made it clear, activity in that area has ceased. I hope that's answered the question.

Any more question?

I thought I would agree because only have one round.

We can chat about it if you like. I don't want to sort of labor the point in terms of current trading because I know it sort of can get a little tedious, but there was an awful lot happening in the U.K. in that fourth quarter, the uncertainty of that later budget cycle in particular. And obviously, you referenced then strong Christmas then flowing into the year. So again, I'm not expecting you to give me a month-by-month breakdown of things, but just sort of some flavor as to how you saw that backdrop play through? And to what extent, again, is it about things you've been in control of with the launch of the CHICK 'N' offer versus that sort of uncertainty for the consumer, which seems for a lot of businesses to cause a lot of volatility in Q4.

Yes. It's -- good question. Certainly, in the latter part of 2025, we really saw things start to pick up, I'd say, in November, the last sort of couple of periods of the year. I mean it's always the golden quarter anyway, the last 3 months of the year, typically for us. And normally for retail. And I think this year, what we saw was the broader retailers saying it hasn't actually been that great of a quarter and it's been quite tricky, but we held up really, really well. And I think it comes back to -- it comes back to our core philosophy around innovating around pizza and being the brand that customers tend to evolve around. And I think certainly, the stuff that we launched food in terms of bringing back the ultimate Christmas turkey, Christmas pizza and bringing back all of the sort of core items from Christmas, that sort of really anxious, delicious, lovely food that we do seem to be something that consumers in tough times really held on daily to and brought back to the table much more strongly. So I think what we saw was it in our control, I think it was, but I say that because of the focus that we have on that one more time that back to the core proposition and making sure that we've always got something that is relevant to the right occasions in the customers' lives, and that's been a real focus.

Constancy of pricing on the national offers has been a good thing as well.

It has -- one of the other things that we've done, and this is very much in close collaboration with our franchisees as it always has to be when we run national deals, -- we've been running two very consistent and very attractive national deals, one across delivery in terms of price lice and one across collection in terms of collection perfection. We -- I think, again, you can maybe pick up with Sarah later, but what we have seen and what we've seen in our data is that, that really is driving repeat rates because it's a great deal. It's an easy-to-understand deal. It's easy to find on the system, and it's just offering great, great value. So it goes back to the fundamental value proposition of Domino's, which is great product, fantastic service where you're going to get you to pizza delivered in less than 25 minutes if it's not Domino's, because I know if you tried an aggregator, it's about an hour. The fact that, as I said, back to the brand being in people's psyche is so, so important and that we're the first pizza brand that anybody ever thinks about. And having that really clear and consistent price point, it's screaming value at the consumer. We are seeing that, that is one of the things that is underpinning our sort of sales performance in the latter part of the year. So I think is it in our control, not 100%, but I think we've done an awful lot to pull levers to help that. I think that, as I said, did give us momentum into January and February. There's bound to be some weather impact. I know everyone thinks about the weather and bad weather always makes customers want to stay at home and order more delivery. So we benefit from some of that, but it's not something we plan our business around nor that we're dependent on. And actually, sometimes the weather goes against us because I'm sure in June, we'll be craging because the sun is out and everyone is wanting to have a barbecue. So we don't spend too much time worrying about the weather, but there will have been an impact from that as well. And then to sort of finish your question, I think CHICK 'N' is definitely then starting to form a part. I don't want CHICK 'N' to sound like it's a major player here, though. We have got a drumbeat of core pizza innovation that comes out campaign after campaign campaign. We bring them back. We listen to customers, they say, I'm missing my hot honey [indiscernible]. That was the battle cry a few months ago. And so that came back to the menu. So I think some of it is the consumer environment and some of it is how we respond to it and then go back out with something that they want to buy from us.

I mean there'll be more detail in the quarterly update. We're holding our four times a year update in terms of what our quarterly results were and the drivers of those.

I've been told several times not to say too much about...

It's positive.

Thank you for the grilling. Look, this is -- a couple of things. Firstly, I would like to say a massive thank you to my colleague here on my left, Richard Snow. He's been my interim and the previous CEO's interim for an incredible amount of time and has done an amazing job. And I'd just like to say a massive thank you because you've been my wingman and kept me honest and on it across all these numbers. I'm a step-up CEO. I'm interim, doesn't change my commitment to this business or this brand. I hope you've got that from me in spares today. I love this brand. I love this business. I love the people that are in it. It is my happy place, and Richard has come in and helped me really get a grip of where we are, stabilize the business, start to put some structure around the strategy, some clarity around the strategy. And the strategy is not brand new. It's not -- I just plucked out of. It's all the stuff. I mean we have the most amazing ExCo in the world. And between us, I don't think anyone has got less than four years service and some of us have got 10-year service. And we have been the stable driving force of Domino's to all the other changes and things that go on. We are the stabilizers of this bike. And so I do want to reassure everyone that this business is in really good shape. Our people are happy. Our franchisees are happy. We're feeling really confident and we've got some good momentum going into 2026. I am sure there will be knocks and blows and battles ahead. But I think this year, we're well positioned to weather those storms better than we probably did in 2025. And I'm really looking forward to coming back in 6 months and telling you just how well we have weathered the storms. But yes, thank you, my friend.

Nicola, thank you. It's been great working with you. The business is in tremendously good hands. But that key point you've made, it's basically the same hands that are delivered in a market that's down 12% system growth, partnership franchisees and the [ ExCom ]. And a little bit when I look as a CFO at our business and the comms, there's been a huge obsession around second brand and what it means and buybacks. And there's noise outside. There's been this core group of people, which I've got to know by being interim, who have been utterly focused on just making that happen. Market down 12%, our business up and that doesn't happen overnight by miracle, by [indiscernible]. That's because of years of hard work done.

I have those words in my favor [indiscernible] them out.

Right. End up. Done.

Thank you very much, everyone.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.