Strange place to hold the A.G.M. this year. |
Interesting |
Trading in line and unloved since the start of the year.
Cost of living must be a major influence here.
Suet |
Peel Hunt: Domino’s moves from defence to attack
Domino’s Pizza Group (DOM) is moving ‘from defence into attack’, according to Peel Hunt, which believes the pizza delivery chain will thrive in a downturn.
Analyst Douglas Jack retained his ‘buy’ recommendation and target price of 475p on the stock, which owns the Domino’s master franchise in the UK and parts of Europe. The shares closed flat on Monday at 385p.
Jack said that now there is a franchisee agreement in place, settling a long-running dispute, Domino’s ‘can strive for a return to faster growth and a higher rating’.
‘More so than other food delivery operators, we believe Domino’s has the business model and opportunities to thrive in a downturn,’ he said.
‘With the franchisee agreement in place, Domino’s can now move on from being defensive about the franchisee relationship and focus on beating the competition.’
citywire.com |
Domino’s Pizza posted FY21 results this morning. The business enjoyed a transformational year, with robust trading, excellent strategic progress, resolution with franchisees and significant returns to shareholders. Group revenue was up 11% to £560.8m, statutory profit after tax rebounded 97% to £78.3m and basic EPS likewise jumped 92% to 17.1p. The company announced a new £46m share buyback, in line with the business’s commitment to distribute surplus capital to shareholders. The business continues to grow solidly and profitably. Operating margin and RoCE are both top decile for the sector. Valuation is average and the share price is currently in a correction, so there is no rush to buy. But the business is a solid, expanding retailer with a 20+ year track record of business and share price growth. Certainly a solid company to monitor....
...from WealthOracleAM |
JEFFERIES RAISES DOMINO'S PIZZA TARGET TO 360 (260) PENCE - 'UNDERPERFORM' |
i think 45-50 a year is sustainable for the next 5-10 years IMO. eventually they'll run out of space to grow in the UK. but that's fine as long as they don't do a tesco and start chucking money around to try and manufacture growth (although they did of course, hopefully they've learnt their lesson).
the franchisees are large and powerful businesses in their own right. however, domino's is the strongest QSR franchise around, and they are incredibly lucky to have been making windfall profits while many others have been struggling to survive. ultimately this expansion will make them a lot of money as well as strengthen their market positions. |
LIBERUM RAISES DOMINO'S PIZZA TO 'BUY' (SELL) |
I suspect the franchisees have driven a hard bargain. It is good news but they're still only predicting a minimum of 45 new stores a year. In the good old growth days it was 70 ish a year. |
good news on the franchisee front. common sense was always going to prevail in the end. remember that domino's are virtually the only QSR who have increased profits during covid, having remained operational throughout. they are franchisees of a powerful business model that goes from strength to strength.
with a bit of operational gearing, this new 3 year plan should increase profits by about 15%, but it is the longer term store opening trajectory that looks even better. |
An unwanted final comment from Mould on the three year agreement.
It's gonna be so successful that at the end of three years they sign up for a new 5 year deal.
Suet |
I remember the price collapsing day by day due to these 'disputes' with franchisees while I was accumulating, now that the clouds have disappeared and they have pledged to open up an additional 45 stores all looks much rosier. And of course with the disastrous international adventure over and stay at home measures lingering shareholders should be happy! |
It has transformed them. |
Was that update really worth 30% on the share price? Technical factors also driving the price perhaps |
Is anyone like outraged by this, where are they now? |
Dominoes are now a preferred government partner - BUY |
i'd add that as long as volumes increase, profits will also increase for DPG since they mainly make their money from ingredient sales to franchisees which they add a fixed margin on top. there's a lot of inflation out there which rivals will struggle to pass on to customers, which will either trash their margins, or lead to significant closures. in addition, in these times of uncertain food supply and empty shelves, domino's has full integration of their supply chain, which is another very important advantage. |
Sharetalk, you could be right about Domino's Pizza Poland who are now getting their act together under the reorganised team.
Doubled the number of eat-in outlets in early 2021 by acquisition of the Dominium restaurant chain but revenues not yet reflected, as lockdown only ended in May. Strong takeaway and delivery side. Opening if the Dominium sites, recovery after lockdown, and solid expansion program, assures revenue growth. |
there's currently about £88m value in the potential sale of the minority interest of domino's germany in jan 2023. 12% store growth from 330 to 370 in the last year and it will continue to grow profits very strongly. due to this excellent growth, the value of the minority stake increased by 45% in the last year. DPE are clearly far more capable of running european franchises than DPG, that's for sure. DPG made a complete pigs ear of it under their stewardship, as they have done in every market outside of the UK / Ire. |
See also Domino's Pizza Poland, which is about to take off: |
Domino's Pizza Enterprises announced results yesterday.
They have now specifically said they will be looking to purchase Domino's UK's minority stake in the German operation when their call option kicks in in January 2023 (current cost indicated by them c £80m plus effect of another 18 mths growth before 1/23).
They currently have just under 3000 stores in Aus, NZ, Japan, France,Germany ,Benelux and are looking to grow that by 9-12% pa (makes UK growth look pedestrian in comparison) |
More from Berenberg:
Berenberg is expecting some of the recent positivity around Domino’s (DOM) to be "transient" and remains cautious on the takeaway pizza chain.
Analyst Owen Shirley retained his "sell" recommendation but increased the target price from 300p to 330p on the stock, which was down 0.6%, or 2.6p, at 420p on Monday.
"Domino's shares have had a good run, up by 25% since January," he said. "In many ways, we feel this is deserved – there has certainly been more good news than bad news of late. However, we feel some of the positivity is likely to be transient."
Shirley said the upside risk 'appears more modest than the downside risk' for the shares and "any downturn in the rate of underlying like-for-like growth would drive fears about both competition and the franchisee dispute back to the surface".
This in turn could have "a major impact on both Domino’s earnings forecasts and multiple", he said. |
BERENBERG RAISES DOMINO'S PIZZA PRICE TARGET TO 330 (300) PENCE - 'SELL' |
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