Canaccord Genuity Sell 556.50 600.00 550.00 500.00 Downgrades

had a quick look, and a number of unhappy issues highlighted

N+1 Singer Hold 555.75 600.00 611.00 611.00 Retains

Canaccord comment today:
"System sales are up 13.8% and despite operating margins rising 30bps, PBT growth has lagged sales growth at 10.3%. These growth rates exclude Germany and Switzerland which when accounted, has resulted in PBT falling 46%. The group has incurred exceptional charges of £12.3m relating to impairments of the German business. Whilst the headline UK and IRE LFL sales number will make for some positive reading at c6.5%, we are not seeing the expected profit flow through that one would expect. Greater clarity on the price, mix and volume dynamic is required as one should not lose sight that DOM Plc makes c75% of its revenues as a food distributor to its franchisees. Overall EPS (FD) is up 5.4%, DPS is up 7.6% but overall net debt is up 43% to £23.3m. Moreover the CFO, Lee Ginsberg is leaving the business at the 2014 AGM and a search for his successor will commence shortly
The performance of the German business is of increasing concern. Whilst management highlight German LFL sales up 23.8%, at the same time there is a £12.3m write down of German assets. The CEO comments further on that there will be a longer path to profitability with breakeven in 2016 or 2017 rather than 2015 We are also concerned that the drivers of the +6.4% LFL sales in H1 are not sustainable, and could be impacting franchisee margins via an increase in overall system promotional activity. Whether this dynamic as well as the majority of new openings being area splits, could be hampering franchisee appetite to open more stores. This would represent the one main risk to the investment case. Comments that pressures on commodity prices are rising could also lead to higher prices being passed onto franchisees.
The shares trade on a PE of 27x and EV/EBITDA of 16.6x for a business that is now delivering forecast and balance sheet downgrades. Our forecasts assume PBT growth of c15% in the UK & IRE business vs. the 10% delivered in H1, with the overall group c5% - forecast risk remains on the downside. Cash from operations of £15.5m (2012: £18.8m), significant working capital investment in Germany (increase in debtors) has resulted in higher debt. We feel the combination of multiple moving parts has resulted in higher risk suggesting a moderation to our Quest™ derived target price which we reduce to 500p. SELL.

I've just noticed the Director/PDMR Dealing -

Lee Ginsberg, the Chief Financial Officer of the Company disposed of a total of 70,000 Ordinary Shares on 30 July 2013 at an average price of 578 pence per Ordinary Share.

He did very well price wise!

"The Chief Financial Officer of the Company disposed of a total of 70,000 Ordinary Shares".. I'm not surprised after looking at it's chart.

Not investing in this one. Divi is only 2.4% yield anyway. 7 of my 8 shares are in profit.
5 are with more than 4% yield.

02 Sep Citigroup Buy 596.00 - 675.00 Initiates/Starts

Domino's Pizza Group PLC will announce its interim management statement for the 13 weeks ending 29 September 2013 on Wednesday 2 October 2013.

chart is looking very congested, but certainly worth watching as this isn't a bad sector in which to be taking a bite (sorry!) if you believe the market in general is on the up

numbers tomorrow as well

have had a nibble(!) having sold my (profitable) NXT

Good luck cynic - trading update tomorrow - and don't you have a theory about these and numbers!

nope; as usual not at all, and though the product is pretty rank, it has an excellent reputation and market presence ...... historically, the sp tends to dump on figures, but as it is already well down from all sorts of levels, the risk doesn't look too bad

overall, i think this is a good sector to be in, especially with the economy now recovering ...... though people don't yet have more in their pockets, i sense rather more optimism in the air, and DOM is a good and cheap way to have a "treat" without much expense

it was these or RTN

Yes you may be right - and RTN have carried on up after my recent sell - heyho!

comparative market performance with RTN (red)

Interim Management Statement

The Company has continued to make solid progress since the half year. System sales for the period were up by 10.4% to £140.9m (2012: £127.6m) with year to date system sales up by 11.1% to £437.9m (2012: £394.1m). Despite the impact of an extended period of unusually warm weather, like-for-like sales in the period in the 669 mature stores were up by 4.0% (2012: 3.7%) with a strong end to the last two periods of the quarter. Year to date like-for-like sales were up by 5.6% (2012: 5.1%).

Online sales also continue to grow strongly, with digital sales now accounting for 62.4% of UK delivered sales (2012: 58.4%) in the period. Total online sales for the period rose by 19.8% to £72.3m (2012: £60.4m) and have reached £230.7m for the year to date (2012: £177.6m). Mobile sales continue to rise sharply, up by 102.5%, and now account for 29.3% of total online sales.

During the period, Domino's opened eight new stores in the UK with 23 new stores now open this year. As well as the usual planning challenges, we introduced a new store design in early 2013, which pushed back the opening schedule towards the latter part of the year. We now anticipate opening around 50 stores this financial year. At the period end, Domino's had a total of 750 stores in the UK (2012: 700).

Domino's continues to place marketing at the heart of the business and, during the period, we launched a new above and below the line advertising campaign, 'Greatness', which premiered on UK & ROI primetime TV. Domino's also undertook a major TV sponsorship deal in the UK, partnering with The X Factor App and further cementing the brand's ownership of the Saturday night TV experience.

International

System sales in the Republic of Ireland rose by 3.7% to €11.5m in the period (2012: €11.1m) and year to date were up 4.5% to €36.1m (2012: €34.6m). Like-for-like sales have now seen nine periods of consecutive positive growth and, in the quarter, were up by 2.4%, despite the warm weather in the period as mentioned above. Year to date like-for-like sales were up 5.2% (2012: 1.2%). During the period, a high profile marketing activity saw the brand sponsor the primetime Friday night entertainment programme 'The Hit', which helped underpin the sales growth. There are 48 stores in the Republic of Ireland (2012: 48).

The German market generated system sales in the period of €2.8m (2012: €1.0m) and like-for-like sales of 9.4% (2012: 16.8%). Year to date, system sales were up 336.4% to €7.4m (2012: €2.2m) and like-for-like were up 18.7% (2012: 20.9%). The franchisee stores continue to make good sales progress and at higher sales levels than the corporate stores.

At the end of the period, Germany had 25 stores in total, 15 of which were corporate stores. No new stores were opened in the period (2012: zero), the year to date total therefore remaining at seven (2012: four).

As highlighted at the interim results, the decision has been taken to transition the majority of the German corporate stores across to franchisee management as soon as practicable. The business is making good progress with this process and we are confident that a good proportion of these stores will have transferred into franchisee hands by the year end.

Switzerland continues to perform well with system sales in the period of CHF 3.0m and like-for-like sales rising by 4.7% and 6.2% for the year to date. At the end of the period there were 10 stores (2012: 12) in this market.

Take your pick :-

Numis Buy 607.50 589.00 710.00 710.00 Reiterates

Canaccord Genuity Sell 607.50 589.00 500.00 480.00 Reiterates

N+1 Singer Hold 607.50 589.00 550.00 550.00 Retains

not a bad call in a shit market was it :-)

Well done cynic, nice trade.

just got out at 612 ..... a nice though not huge profit for <48 hours investment