Domino's Pizza Share Discussion Threads

[salpara111] 06/12/2013 13:54

Don't normally do this but day traded this for a nice £400 profit today.
Normally a CEO leaving is worth a 3-4% hit.....assuming he is well regarded! so there appeared to be a good opportunity for little risk.
Clearly it is still an expensive business and the timeline to try and sort out Germany is quite long so I decided to put the money in the bank and pay for the christmas presents.

[robinnicolson] 06/12/2013 11:42

Barclays note:

On the face of it, after the sharp fall the shares could potentially offer value. Stripping out the German losses, we estimate that the UK business generates EPS of c25p, which at the current share price of 490p, implies a PE rating of 19.6x. This compares with the LT average rating of c21-22x. Despite all the issues mentioned above, Domino's UK is an excellent, high ROCE business, where its commissaries are running well below their potential capacity utilisation.

However, we would want to know the answer to two key questions before taking a more positive view on the shares.

1). A better understanding of the balance between franchise and PLC profitability. Without a firm sense that Domino's is not over-earning from its franchisees, potentially requiring a major overhaul of the economics of this business, our suggestion that core UK earnings are 25p could be optimistic.

2). More clarity that there will be no further value destruction from the Germany expansion. The company has said that FY13 losses will be £6m, moving gradually to breakeven by FY16/17. However, we do not fully understand why franchisees would take on new sites in Germany if they are less attractive than UK sites, which have average EBITDA of c£100,000. Given that a key reason behind Mr Batchelor's appointment two years ago was to rollout the business in Germany, this morning's news raises further question marks on the long-term feasibility of Domino's succeeding in Germany.

[robinnicolson] 06/12/2013 10:47

Reaction of analysts to the news:

[m1das_touch] 06/12/2013 10:01

Complete market over-reaction to the announcement of Lance's departure, the Dominos business model is much more important than who's at the helm.

I've been looking for an opportunity to buy back in, having last sold out at 647p...this morning was it, picked up a few at 482p & will look to accumulate at around these levels or lower.

[philanderer] 06/12/2013 09:23

FWIW

6th dec N+1 Singer hold tp 550p

retains

[bulltradept] 06/12/2013 08:55

Salapara111, Still rich though isn't it? I know it's gapped down but the PE is still too high for me currently.

[bulltradept] 06/12/2013 08:48

RoyalT,

I sympathise, we er 'brits' here in the UK don't get customer service, we are probably about twenty years behind the US in general terms..

[salpara111] 06/12/2013 08:46

I get the feeling that Mr Market was looking for a reason to ease the share price back to the 500 region and as such it was a good opportunity to do so.
I have looked at Dominoes several times but felt that the valuation was a bit rich for me but I am interested at the current 480 level.

[royalt] 06/12/2013 08:44

Thank you for understanding bulltradept!!

[aa29] 06/12/2013 08:42

Obviously there might be underlying reasons relating to Dominos but with strategy being set, I can't see how losing the CEO should take almost 10% off the share price

[bulltradept] 06/12/2013 08:36

Miti1000,

Well perhaps if you look past that then you see a company employing people who are no doubt hired at the cheapest rate, with little or no customer service skills.

So perhaps his story, no matter how it is put over, tells a potential shareholder more than some glossy presentation put out by mgt.

And now mgt are leaving..

[bulltradept] 06/12/2013 08:19

RoyalT That's a great story! love it, that made me lol.

£4.00 here we come in the future for DOM?

[kristini2] 06/12/2013 08:06

closed too early, life!

[kristini2] 04/12/2013 16:58

ta, just closed a nice sell from £5.50

[philanderer] 04/12/2013 13:37

kristini , interim in september and final in april.


4th dec Citigroup buy tp 675p

reiterates

[kristini2] 04/12/2013 11:32

anyone know when the divi is paid on these ?

[kristini2] 28/11/2013 16:14

slip sliding

[kristini2] 26/11/2013 12:22

I fancy this could slip to the downside here, we'll see

[aa29] 23/11/2013 18:53

Looking at their interim report, Fundsmith hold DP Inc

[mad foetus] 22/11/2013 17:06

Does look very weak, wonder if Terry Smith is wondering about Fundsmiths holding?

[kristini2] 22/11/2013 16:46

£5 here we come;

nigel wray has sold out
nimmo at standard life smaller cos has sold out
gone ex growth on PE of 28 x

[philanderer] 12/11/2013 17:32

Domino's Pizza UK ‏@Dominos_UK 45m

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