Domino's Pizza Share Discussion Threads

[wig123] 07/12/2008 16:40

Anyone know where Dominos source their pork/bacon/ham toppings from?

[life of crime] 07/12/2008 16:35

DOM's main rivals are Pizza Hut, Pizza Express and Papa John's and none of their prices are half the cost of DOM. Local pizza firms with just one outlet may well be cheaper, with BOGOF offers, but you usually get what you pay for, i.e. there was an Evening Standard review of an independent outlet near me which summed it up: "throw away the pizza, eat the box".

I think DOM is competitive to their peers, which does not include KFC who aim at a different market, IMO.

[davidosh] 07/12/2008 13:01

I am certainly not suggesting people will not still want to treat themselves with the odd takeaway but it is immensely competitive out there now and you can get twice as much pizza from competitors for the same price and a whole bucket of KFC feeding a family of four for £9.99 whereby one pizza will fall very short.

[life of crime] 07/12/2008 11:07

gipps,

They are building a new facility adjacent to their HQ in Milton Keynes, which I think is due to open next year. It will increase their capacity to supply all the planned new stores with ingredients - DOM want to double the number of stores from the current 500 to 1000, so it matches the same profile of stores to population that the American operation has. It is a freehold site, so they will not have any rental costs once built.

FWIW, I think DOM will survive the credit crunch quite well. The evidence is that people are down-shifting, so the expensive restaurants may suffer while customers opt for a takeaway. I was in Starbucks the other day and they were still doing good business, my point being that people still want to treat themselves, especially in a gloomy period, and small "luxuries" like coffees and takeaway pizzas should do well as a result.

[davidosh] 06/12/2008 18:05

The net assets at the interims were just £6.2m against £12.8m at the last interims and that is set against a market cap of nearly £300m. There is very little cash and the borrowings have been escalating with the new facilities being built. This company is all about growth and any possibility that it cannot be maintained at double digits will start to ring alarm bells with underlying assets very weak. Just my thoughts and opinion watching so many stocks hammered even though they still have strong assets and growth albeit just low single digits now and may go flat. Those companies are on p/e ratings of four or five right now and not eighteen.

[welsheagle] 06/12/2008 15:37

From November's 'Company Refs', when price was 167p:-
a/ Prospective PE ratio of 14.8 (based on nine broker forecasts, four recommending 'buy', three recommending 'overweight', one recommending 'hold', and one recommending 'sell').
b/ Gearing of 15.9%.
c/ Turnover up from £61.6m to £115m in last five years.
d/ Three directors selling recently.

[gipps] 05/12/2008 14:53

Fair comment, i suppose in fairness it has come back to nearly half its value in the past year so some may now say its good value for a cash rich company thats been buying its shares back which has paid a sensible dividend.

I remember reading that they were going to build a new distribution centre somewhere that was going to save them money in long run does that ring a bell with you?

[davidosh] 05/12/2008 13:33

My worry is that if the like for likes fall steadily then the franchises will be harder to sell and will not command the premium price in the sector. It also suggests they may be at a saturation point so a double whammy of slowdown and saturation. The mature stores will then have less to pay across as the revenues will go down.

I am not suggesting major problems but just wondering if DOM still demands a high double digit growth rating and maybe should be more a p/e of 12 or evenslightly lower in these markets.

[gipps] 05/12/2008 12:50

Davidosh Surely the figures that you are showing are the increase ie 8.8% increase in Sep which isnt bad under the circumstances.
The Dominos that you are investing in is the franchiser and they say that they are on track to open 50 new stores this year so if the existing stores are up 8.8% plus they sell 50 new franches this year for a sustantial sum to each franchasee.
Also i think i am right when i say that earlier this year they re negotiated with there wholesale chease suppliers etc to get a better deal but i bet that the stores still have to pay them the same.

[davidosh] 04/12/2008 23:32

What has been the rate of growth for new franchises ? Has it started to slow down and what has been the average revenue per store ?

Does anyone follow this closely ?

I have checked the like for likes over the last couple of years and they seem to be rapidly in decline

Dec 06...9.7%
Jun 07...14.9%
Dec 07...14.7%
Jun 08...11.4%
Sep 08...8.8%

[jfishy] 04/12/2008 21:20

I've come to the conclusion that DOM products are incredibly overpriced so I've decided not to remove DOM from my watchlist. I just can't see how they can make profits in this climate & if they aren't making money, franchises will close, new ones will not open.

When I say overpriced, I'm looking at 3 areas:
1. Total expenditure.
For the amount you would pay for a meal, you can eat anywhere else for less money. Including sitting down in a standard restaurant.
2. Cost of the product compared to competition - Every delivery / takeaway pizza place I've looked at is cheaper than Dominos outlets.
3. Value for money. Bread, cheese, tomato sauce. Seems incredible that they cost more than say a curry which will include meat, or a steak. The better half pointed out that I have not had takeaway pizza for quite a while now - she is right - I've been eating supermarket pizza without noticing. I used to use Perfect Pizza once a week, but even they look expensive to me now thanks to the credit crunch. (For comparison PP sells any pizza any size, collection only for £8 - I think that is expensive - now look at the price from DOM for a collected pizza).

I've been watching for a while as I'm a pizza fan & always fantasised about having a pizza franchise & also since TWs tip but I just can't see any positives about it in this climate.

Good luck to any holders though, I hope I'm wrong for your sakes, but I'm outa here.

[davidosh] 01/12/2008 14:14

There is a limit to the number of franchises you can sell and they will only want to expand if they can prove that the mature sites are still growing otherwise they will not have happy current franchisees. Canibalisation hurts if you have too many in close proximity. We have two Dominos about a mile either side of us so naturally one franchisee cannot have the custom.

[gipps] 01/12/2008 10:22

I appreciate that there is competiton on the high street but surely a large part of there income arises from selling new shops to franchises and as they say they are on track for 50 new ones this year that must be a sizeable chunk of income plus they will have 50 new stores that have to buy their materials from them so surely if the existing stores sell a little less than in previous years the new stores will make up for it.Just my thoughts...

[davidosh] 20/11/2008 11:41

I think the problem will be that all the many pizza takeaway and delivery outlets will be competing hard on price and offers so it may be hard to keep sales growth. Customers will be tempted to check out the rivals and so many land on the doormat every week. The Chicago Town stuffed crust on offer at Waitrose for £1.99 recently was easily as good as any delivered pizza. We did have to pop them in our own oven though but in these hard times...needs must !! The kids really enjoyed them both fully loaded and pepperami. DOM is bound to see sales slide in this climate and the last update was before the October high street and economic woes. Just my thoughts..

[gipps] 04/11/2008 11:01

Ref the rns today does that meen that l and g have bought more shares or sold them.

[andy] 26/10/2008 11:51

I ordered two single pizzas last week, from my local Domino, and collected myself, (as it was BOGOF for collections), and was astonished to be charged £12.95!

The pizza toping was ok, but hardly well covered, and less than some restaurants, where if I had had to pay for two, it would have been cheaper!

Hmm!

I see people switching to supermaket prepared foods at those prices!

[life of crime] 26/10/2008 10:12

jfishy, if you collect your order then I think the most you'll pay for any sized pizza is £10. You always pay more when it's delivered (I assume your food was delivered).

Two large pizzas from DOM at £20 would more than suffice for 4 people and I think that is why they have been doing so well during this downturn.

[jfishy] 23/10/2008 17:45

I've been wondering about buying DOM for a while & the fundamentals seem to add up but one thing niggles me:

I ordered some last night - great food but £30 to feed 2 adults & one kid. I could have gone to a restaurant! Seems to me that this is not "save money eat at home" food. As such, I can see these slumping in a recession. Personally, I can see people moving to supermarket ready meals (which seem to be nearly on a par with takeaway now) in hard times.

Add to that, takeaway & delivered pizza seems to be massively overpriced when you compare to other foods.

I just can't bring myself to buy - any thoughts?

[johnnypardal] 06/10/2008 08:20

Footsie -4.95% DOM -1.02%.

[johnnypardal] 06/10/2008 07:59

Footsie -4.49% DOM -1.53%. Can't be bad!

[gipps] 01/10/2008 14:50

Like for like sales increased even in these hard times sounds good news to me.

[the blue knight of no] 01/10/2008 12:49

ADVFN's tip of the day by the look of it.

[gipps] 25/9/2008 07:32

The dough is rising

[gaean2] 22/9/2008 15:04

DOM's rises outweigh by far the falls and it tends to go against the current on bloodbath days. More or less your money is guaranteed, at any turbulence.
That's a tremendous advantage for traders who need their cash immediately,
grab incidental excessive falling opportunities elsewhere, and return back to safe heaven.
It is also one of the least shorted stocks, and the spread is getting tighter.

[clarky5150] 19/9/2008 07:53

Come on DOM largest bounce in donkeys and we are dragging our heals.