Broadly the pizza chain is having a decent 2019. Having shot up to £2.83 within the first few weeks trading, the stock then founds itself slipping towards £2.20 in mid-March after its fourth quarter update sapped it of energy at the end of January.
It’s on something of an upswing at the moment, teasing £2.70 as April wrapped up. Domino’s Pizza Group PLC (LON:DOM) now sits at a current trading price of £2.64, a solid near-13% increase since year’s open.
In a self-labelled ‘mixed year’, Domino’s saw Group system sales rise 9% to £1.26 billion, while UK like-for-like system sales were up 4.6%, only a mild slide from the previous year’s 4.8% growth.
The real focus was the 22.2% plunge in pre-tax profit to £61.9 million as the company incurred charges of £31.5 million, relating to ‘International impairments, UK supply chain transformation and integration costs’. Talking of its International performance, Domino’s said that it had experienced ‘some growing pains’ but now has ‘strengthened’ its management teams.
As for its forecasts for 2019, it is targeting a similar UK store pipeline to 2018 – when it opened 59 new locations – while internationally is aiming to break even by the end of the year. Capex is set to be around £25 million to £30 million, with ‘controlled international investment’.
Given the huge impact its International arm had on its performance last year, the focus of Tuesday’s Q1 update is likely going to be on whether or not there has been any tangible improvement in the division. That is, as long as the UK and Ireland hasn’t seen any issues.
Domino’s Pizza Group PLC(LON:DOM) has a consensus rating of ‘Hold’ alongside an average target price of £3.15.
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