Domino's Pizza Share Discussion Threads

[pame100] 23/7/2007 13:44

hi,
there has been no mention here of the exceptional costs for the next three years-due to the increased commissary provisions(no pun intended) that will be needed for the expanding business.
£4m(2.4pps) in the current year. £25m(15pps) in the next year, and £15m(9pps) the year after. these are going to reduce the eps's by quite an amount.

in my opinion it is a great, well run business. i sold out recently as i think the share price has got above itself. i have done this, wrongly in the past with other things so i'm not saying that i'm right.

the thing that would make me jump back pdq is if they were to expand by buying the european rights to Dominoes which, i believe, need some improved management input.

[techmark] 23/7/2007 13:36

Growth will slow, if they post 20% this year then there's a very good chance that growth will slow to 15% as I said, but it could be lower say 12% given how strong the numbers are this year. Especially if store openings miss targets.

[trt] 23/7/2007 13:02

Charles Stanley has now raised its share price target to £3.35

[trt] 23/7/2007 12:38

Growth will not slow next year but increase as expected and as I have said before DOM are now increasing profits year on year.

- Group further strengthen its market leadership not only in terms of system sales and units but also by pioneering innovations that are leading the way in the home delivery food industry.

- The use of realtime technology in stores, has resulted in dramatic improvements in customer service standards. The technology we have introduced enables our franchisees to pinpoint how their team members can work together to make and bake a pizza as quickly as possible without compromising on quality. The team's combined efforts in-store provide delivery drivers with ample time to get the pizza safely to the customer. A national incentive has encouraged all stores to get behind this effort and we have already achieved our 2010 target for improved service times, with an average out-the-door time of 13.5 minutes (January 2006:
16.0 minutes).

-

[techmark] 23/7/2007 12:03

trt they are pre tax figures. Use the EPS, currently forecast around 7.8p for this year.

291p divided by 7.8p that gives us a P/E of 37. I suspect that growth will slow next year certainly to 15% and perhaps down to 12%. I can see no reason for paying such a high multiply for the growth on offer here. A nomalised market P/E of 15 would give a share price of just 117p, now clearly there's is going to be a premium for the quality of earnings, but with the shares at 290p that is one heck of a premium. Any disappointments or changes in market sentiment and the shares run the risk of being thumped.

Regards.

[trt] 23/7/2007 11:49

Because the brokers are forecasting £3.30 based on £17m profit but DOM is going to exceed this substantially.

[techmark] 23/7/2007 11:46

Trt,

What I'm squealing because a 1p move against me? Incidentally you supplied no valuation method for how you arrived at £3.50 and how you justify at p/e 43. Why am I not surprised.

Regards.

[trt] 23/7/2007 11:43

Desperate measures now techmark,

Squealing when you see the price rise and not all brokers have got their revised targets out yet, when they do and advise clients to buy it could get nasty for you. If you do have a short open I suggest you close it now !!!

[techmark] 23/7/2007 11:30

It's pity that constantly repeating the same story doesn't sink into your head.

When the shares go sub 200p I hazard a guess that you will no longer be posting on this board.

Regards

[trt] 23/7/2007 11:22

Back up we go hold onto your hats !!!

Results now sinking in with investors - brokers recommending private clients now buy

[trt] 23/7/2007 11:20

from the BBC:

Domino's rallies in soggy summer

Domino's now has 470 outlets in the UK and Ireland
The wet summer has helped takeaway chain Domino's Pizza serve up a growth in profits, the company said.
Heavy rainfall and cooler temperatures saw sales grow 14.9% in the six months to 1 July at its UK and Ireland stores open for more than a year.

A Meateor pizza and another, themed on The Simpsons, also boosted sales which drove pre-tax profits up 35% to £8.3m.

Orders placed online and through interactive television made up 14.3% of sales of delivered pizzas.

Weather woes

The firm has been promoting its internet service as part of its sponsorship of The Simpson's on Sky One.

This came after a television watchdog ban on the advertising of junk food on programmes which appeal to children - meaning it could no longer promote specific products

Online ordering generated higher sales per customer and had lower costs for its stores, the firm said.

Domino's, which has 470 stores in the UK and Ireland was "firing on all cylinders" said analysts at Altium Securities. Its shares climbed 3%.

[trt] 23/7/2007 10:57

Thanks theeagle2 - and I look forward like many others for progression towards those £3.30ish price targets and the market at last beginning to realise DOM's growth continues unabated.

[techmark] 23/7/2007 10:56

Well at least the company isn't buying back it's shares with the money, having realised its shares are way overvalued. I wonder how long it will be before the directors start bashing out a few sells again?

Regards

[theeagle2] 23/7/2007 10:53

Thanks trt for the Press Updates. Dom shares are on a high rating, but an excellent long term core holding!!!

[trt] 23/7/2007 10:49

I just love - " The business is genuinely firing on all cylinders." and they will exceed £17m full year profits - absolutely superb !!!! + those share price targets of £3.30ish

[techmark] 23/7/2007 10:44

Can you explain to why the shares should trade on 43 times earnings? Do you not understand the principles of valuation?

[trt] 23/7/2007 10:38

Thats two brokers with share price targets over £3.20 - Now just waiting for the rest.

I wonder how much full profits will exceed market expectations and we could see further rerating later in the year once analysts have the visited company and seen how good things are going.

i reckon price targets of £3.50 + will be forthcoming

[trt] 23/7/2007 10:21

Surprisingly one assumes its "His" and Numis Securities have just upped their share price target from £2.81 to £3.34 and their recommendation to ADD

[techmark] 23/7/2007 10:17

Is that last comment yours or his?

[trt] 23/7/2007 10:11

Press comments have started:

Daily Mail:

Company watchers believe there is more to come from Domino's, which now has more than 450 stores in the UK and Ireland.

Altium Securities' analyst Greg Feehely says that Domino's is also set to gain from a heavyweight television advertising campaign, burgeoning online orders and its 'relentless' focus on speedy delivery which sees its pizzas delivered in 20 minutes on average - twice as quickly as its nearest rival.

Mr Feehely said: 'The shares have justifiably been excellent performers over the last year yet further progress remains likely in our view.

'The lack of exposure to the smoking ban is a further positive.'

[keran] 23/7/2007 09:07

Good results this morning I see. Wasn't expecting such a huge rise in profits so thats really great. The dividend increasing by 46% - nows that mind blowing not sure any comapny has increased its Interim divi by such a large amount. This shows how confident the board are when looking forward to the rest of the year.

Nice to see profits will exceed market expectations come the year end.

I have some spare cash so i will certainly top up at this level

Thanks to one and all and what a superb company Domino's is.

[trt] 23/7/2007 08:32

The press carry weight when it comes to bringing new investors on board - ignore at your peril.

Just noticed the 46% increase in the dividend is paid at the end of August for those holding the shares on the 3rd August - earlier payout than I had expected which is nice.

[techmark] 23/7/2007 08:25

Trt,

I'm unphased by media hype. In fact, it often encourages me to take the opposite view to them.

Regards