If I write about anything that is consumer-facing on this website, you can bet somewhere in the text will be a semi-funny joke about why I have not contributed directly to said company's corporate results because I am almost personally post-consumption. Naturally, that does not apply to the rest of the family and because my excuse about the importance of the global corporate earnings season was wearing a bit thin this school holiday, in lieu of a holiday to the Costa del Horrible, the Domino's Pizza (DOM) online capability has recently acquired a new customer…
Of course I have not gone completely mad and we have only ordered to-date when there is some kind of offer ongoing. Naturally it did not take me long to become a dab hand at getting within a quid of the minimum spend to satisfy some required spending level to open up a 50 per cent discount or whatever. I have to say I have been pretty impressed. And to be fair the underlying operational performance has never been a problem at the UK's number one by market share pizza name. The latest interim results show a 3.9% UK systems like-for-like growth which is far from shabby – and this was a theme of my previous musings on the stock back in early May, where I was moved to conclude: 'Just don't hack off your franchise operators and - just maybe - think about a European business deal or JV with a peer or peers in those markets to bulk up. In the digital/convenience consumer game, either you bulk up or you go home. Domino's is just lucky it is the big dog in the UK/Irish market.'
And the two clearest issues above - hacking off franchise operators and looking to sort out the stuttering European business - are still the key issues today. The big news in the interims is that the embattled CEO David Wild is to 'retire'. Now at previous links there has been plenty of historic discussion about his struggles with franchisees, allegedly because of a heavy-handed attitude sufficient to hack plenty of them off. Maybe this is just the natural tension between a head office and the provinces, but this felt more messy and at the door of the CEO, especially with the company struggling to hold onto CFOs too. Certainly even comments today such as 'new store openings are being delayed' is not good. Anyhow, interesting to juxtapose Mr Wild's 'retirement' and the anticipation of a 2020 date to 'agree a sustainable win-win solution'. Funny that. Otherwise, the European operations - in places such as Germany, Switzerland, Norway and Iceland - saw losses more than triple to just over £6 million. Now with the UK business making over £50 million pre-tax profit at the interim stage, no shocker...but it raises the question implied at the link above as to why it is even bothering. I am sure a new CEO might well think that too.
What would you value Domino's UK/Ireland franchise at? It should make easily over £100 million this year in profit and is a clear market leader, best technology and related. Change the CEO, work out something sensible with the franchisees and a mid-teens multiple seems workable. Deduct all the current corporate net debt at c. £225 million and you have an EV of a little bit over £1 billion...which is where the market cap is today. Now, close/sell the European franchise, walk away from the losses and wait for talk about the (cash flow covered) 4%+ dividend to start to become attractive to those frothing-at-the-mouth private equity boys... Well it is one scenario, another is that this just becomes again an annuity-style investment chucking off cash. Maybe I need to order another pizza online to work it all out but my gut is to buy the stock here. It still makes decent margins even with these 50% off deals, you know.
Filed under: Domino's Pizza, Burford Capital, Carson Block, UK Oil & Gas, MySale, Thomas Cook
RISK WARNING & DISCLAIMER - FiveFreeShareTips.com tips are provided by independent authors via a common carrier platform and do not represent the opinions of FiveFreeShareTips.com. FiveFreeShareTips.com does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at FiveFreeShareTips.com and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or FiveFreeShareTips.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and FiveFreeShareTips.com shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.
Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.
Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.
We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.
You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.
There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.
Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?
Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now
We've put together a panel of top tipsters, including:
Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"
Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit
Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks
Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books
Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers
Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies
Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments
The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view
Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.
The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). FiveFreeShareTips.com & its sister site ShareProphets.com defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.