Domino's Pizza Share Discussion Threads

[philanderer] 13/7/2010 15:20

Interesting Non-Executive Director appointment today - Lance Batchelor.

As well as his directorship at Next plc which was mentioned in the RNS , is this the same fella who was a director at Vodafone until 2004 and now CEO of Tesco Telecoms and Mobile ?

[slowandsteady] 13/7/2010 12:26

ADVFN is showing a Total Div of 7.75 per share.
That isn't using anything from the recent results so I guess it's just a case of a delayed update in their figures and once they start using the new values all will be well again.

Something I need to be aware of in the future.

Nice rise today so I'm not selling just yet.

S

[philanderer] 13/7/2010 12:18

SAS, surely the dividend % has risen considerably on your DOM holding since your original purchase ?

I don`t know your purchase price but if you add together the latest interim dividend you will receive to the previous final dividend you received then divide that by your total amount originally invested in DOM I would have thought it would be way higher than 2% ?

DOM now starting the next leg up maybe ?

[slowandsteady] 13/7/2010 11:58

All,

One of my investment criteria is a Dividend Yield of >2%.
DOM had 2.27% when I bought them.

Now, because of the strong rise in SP, it has dipped below 2% (currently 1.93%)
Dividend Yield is calculated by Dividend per share / SP

It seems crazy that a rising share price will trigger a sell so maybe I need to adjust my strategy with regard dividends.

Does anyone have any thought on this?

Thanks,
S

[philanderer] 13/7/2010 10:24

"...Numis Securities upgraded its forecast for annual profits to £35.5m from £33.9m as a result of the positive figures, rating the company a "buy". "

[philanderer] 13/7/2010 07:35

Daily Telegraph:

Questor share tip: Buy a slice of cash-rich Domino's Pizza

We first recommended shares in Domino's Pizza on July 21 last year when they were trading at 235¼p. They closed last night at 397p, and we maintain our buy recommendation.

Questor says Buy

The pizza chain has had a good six months. Its interim results yesterday showed that pre-tax profit increased by 28.6pc to £17.5m over the six months to June 27, some 6pc ahead of consensus expectations. Like-for-like sales grew by 13.7pc, and its margins increased. Basic earnings per share rose by 28.4pc to 8.04p.
Its dividend rose by almost 30pc to 4.5p.

Trading has been boosted by the World Cup, despite England's early exit. Like-for-like sales over June rose by 21.6pc as people stayed in, watched TV and ordered a pizza.
What Questor likes about Domino's is its business model. It literally throws off cash. For the past five years it has had a policy of returning broadly 100pc of its post-tax profit to shareholders, by way of dividends and share buybacks. In 2005 it returned £11.4m while in the first half of the current year it returned around £9m. Analysts pointed out yesterday that some major elements of capital expenditure at Domino's have drawn to a close, meaning that it will have greater firepower for shareholders this year.

Some brokers upgraded their profit forecasts yesterday on the back of the results.
The company's model also strikes us as risk-averse. All Domino's branches are run by franchisees. The company itself provides these franchisees with the systems, the infrastructure and the branding they need. Its franchisees pay the company an upfront set-up fee and ongoing turnover-related fees.

The company has worked hard at its branding and marketing over recent years. Last year it launched its "Two for Tuesday" promotion, which turned its slowest night of the week into its third busiest. It has also sponsored Britain's Got Talent, the TV show, for a third year.

In the spring, Domino's took analysts to its new commissary in Milton Keynes. The new central production facility is expected to generate annual efficiency savings of about £1m from 2011. The savings are then expected to rise by about £100,000 each year.
Chris Moore, chief executive, said yesterday that Domino's will need another, smaller, commissary in the South West by 2014. He also said that the company is on track to almost double its size – to 1,200 outlets – over the next decade.

Domino's has little debt and trades on a December 2010 earnings multiple of about 22.7 times, falling to 20.2 in 2011. This is high but reflects the good growth journey that the company is on. Domino's management is well-respected and is known to deliver on its plans.

Potential investors should be warned that like-for-like sales growth is expected to slow over the second half of the year as Domino's "annualises" its Two for Tuesday promotion. Also, high summer is not exactly the prime time to order a piping hot pizza.
However, the fundamentals are strong and there is plenty more to come from Domino's.
Questor's advice is to order up a large slice of Domino's. From where we are sitting it all looks rather tasty. Buy.

[jon827] 12/7/2010 20:48

Domino's Pizza (UK & Ireland)
Hold at 403p (this week 403p) advises WHI Securities. Recent half year results from this takeaway pizza proved to be well ahead of expectations, highlights the broker. Established same store sales were up 13.7pc for Q2, against +10.5pc for Q1, while online sales increased by 61.4pc. Although second half comparatives are expected to prove challenging, current forecasts are now expected to be exceeded, with WHI raising its 2010 earnings forecast by 3pc. However, on valuation grounds, a hold rating is still seen as appropriate

[dnfa1975] 12/7/2010 18:09

these guys should launch a bid for Gourmet Burger - clapham house

[abbey8] 12/7/2010 16:30

GBR is part of Domino"s Pizza ,it is only 2.5p and it has huge potential.

[philanderer] 12/7/2010 15:20

Upgrade:

07/12/2010 -

Altium Increases Domino's Pizza Price Target

[Dow Jones] Altium Securities increases Domino's Pizza price target to 550p from 500p after delivering interim results ahead of expectations. Says the "excellent" results are bolstered by a number of short-term value-led promotions.

Currently models '10 EPS growth of 18.7% but thinks this could surpass 20%. Says, "Domino's is in great sape, current momentum is very strong and although the group faces some very tough comparatives in 2H, we remain confident that it will surpass them."

Keeps at 'buy'.

[robinnicolson] 12/7/2010 11:40

The Interim Results presentation has been uploaded onto the DOM website.

[philanderer] 12/7/2010 10:44

Even Panmure have grudgingly upgraded their target price from fridays number of 300p to 314p this morning ;-)

This performance was driven by an exceptionally strong second quarter, when like for like sales increased an implied +16.9%. The results were also boosted by a small net interest income rather than our expectation of £0.2m cost. We have upgraded our full-year estimates by 4% to £35.0m pretax profit (15.7p earnings per share) and consequently increased our price target to 314p. However we continue to expect like for like sales growth to slow dramatically in the second half and hence retain our sell recommendation.

[philanderer] 12/7/2010 10:38

July 12 (Bloomberg)

KBC Peel Hunt 'buy' increases target price to 485p...


Domino's was helped as customers watched World Cup matches at home on television, plus a "Two for Tuesday" advertising campaign that started last August. Second-quarter gains in sales at stores open at least a year of 17 percent were "spectacular," said Paul Hickman, a KBC Peel Hunt analyst.

"Three factors contributed to this overperformance," wrote Hickman, who has a "buy" recommendation on the shares. "The continued success of the 'Two for Tuesday' promotion, the third year of sponsorship of 'Britain's Got Talent,' and the World Cup."

Domino's rose 3 pence to 406 pence at 9:06 a.m. in London. The shares have increased 36 percent so far this year, giving the company a market value of 653 million pounds.

Same-store sales will slow in the second half due to comparisons with last year's Tuesday promotions, Chief Financial Officer Lee Ginsberg said in a telephone interview.

He said analysts are "penciling in" second-half increases of 4 percent, and "I'm hopeful we can beat that."

In August, Domino's will start advertising its lunch menus, plus new oven-baked submarine sandwiches, he said.

======================================

Paul Hickman at KBC Peel Hunt said the figures had beaten his forecasts and repeated his buy recommendation:

While we expected estimates to be beaten this was by more
than we anticipated. Like for like sales were up 13.7%. After a 10.5% rise in the first quarter, this was a spectacular performance in the second quarter at +17.2%. Three factors contributed to this overperformance: (1) the continued success of the Two For Tuesday promotion; (2) the third year of Domino's sponsorship of Britain's Got Talent; (3) the World Cup. While the World Cup was helpful, it only contributed around 1% to the first half like for like, so this performance was by no means a one-off.

We are upgrading our December 2010 forecast by 6% to pretax profit of £35.7m and earnings per share of 16.0p. This is based on an 8% like for like assumption for the year, which should allow scope for further over-achievement.

While there could always be stock placings by directors, we would also expect to see share buybacks at some stage. We are raising our discounted cash flow-driven target share price to 485p.

[philanderer] 12/7/2010 09:52

Seymour Pierce reiterating their 'buy' for DOM this morning.

[philanderer] 12/7/2010 08:15

Morning SAS,

It`ll be interesting to look out for any broker upgrades / target prices today and tomorrow - analysts meeting with the company in 15 minutea,

[slowandsteady] 12/7/2010 07:50

Morning all,

Yes, a very nice set of results. I wonder how much of that was already in the price and how much we'll see DOM rise.

I'm hoping for another 10-15% rise short term.

S

[philanderer] 12/7/2010 07:23

Morning Jon, just don`t understand why Panmure went out on a limb like that last week ! Credibility well and truly scr*wed !

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A presentation to analysts will be held at 09.30 on 12 July 2010 at Numis Securities Ltd, The London Stock Exchange Building, 10 Paternoster Square, London, EC4M 7LT.

[jon827] 12/7/2010 07:12

another great report here. Well held phil :-)

[philanderer] 12/7/2010 07:09

Morning all, well that`s a cracking set of results :-)

dnfa1975 , are you long or short DOM ?

[dnfa1975] 12/7/2010 06:27

yes but next year will be rubbish - no world cup and now saturation for store numbers?

WATCH OUT FOR DIRECTOR SALES IMO

[fromtheblue] 12/7/2010 06:22

Great set of results - Panmure got it wrong! Looks like full year dividend of 10p.

[nellie1973] 09/7/2010 22:53

Tipped in the Times