DOMINO'S PIZZA ENTERPRISES LIMITED (DMP)



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General Information
Company Name: Domino's Pizza Enterprises Limited
Stock Code: DMP
Website: www.dominos.com.au
GICS Sub-Industry: Restaurants
Market Cap ($M): 948
Equiv. Shares (M): 70

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 13.500 $ 13.200 $ 13.600 $ 13.070 $ 13.780 196,839 $ -0.280  -2.032 %

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 23rd Apr 2013
12 Month Target Price (average): $10.545
Brokers Surveyed: 6

Company Overview

Business Description:
Domino's Pizza Enterprises Limited (DMP) is the Master Franchise licence owner of the Domino's Pizza brand. DMP sits in the Quick Service Restaurant segment within fast food retail and has a licence which covers Australia, New Zealand, France, Belgium, the Netherlands and the Principality of Monaco. The Domino’s brand is owned by Domino’s Pizza, Inc, a listed US company.

Strategy Analysis:
DMP is implementing a number of strategies to expand and insulate the business from a tougher economic climate. In particular, there is continued focus on organic growth, coupled with a sell down of corporate stores. Across Australia and New Zealand there has been a shift towards increasing the quality of offerings, as well as menu expansion into sides such as pasta and chicken wings. The substitution of premium ingredients which are also available as toppings, at a surcharge, are being advertised heavily. Advertising through online, social-network sites, mobile and TV-based technology should serve as a cheaper form of promotion across all geographical areas. Domino's Pizza Enterprises reported NPAT up 15.71% to $14.54m for the half-year ended 30 December 2012, driven by same-store sales and supported by successful marketing promotions. Revenues from ordinary activities were $140.8m, up 7.59% from last year. Diluted EPS was 20.6 cents compared to 18.0 cents last year. Net operating cash flow was $12.88m compared to $14.75m last year. The interim dividend declared was 15.5 cents, compared with 13.0 cents last year. During the half-year, the company added 11 new stores to its network in Australia and NZ, and 15 in Europe. This brings the total store network to 934 at the end of the period.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2014  F 35.9 51.2 14.7 26.4 35.0 2.6 100.0
2013  F 31.3 44.6 15.8 30.2 31.0 2.3 100.0
2012  A 26.9 38.5 24.8 20.2 27.1 3.5 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F
Domino's Pizza Enterprises (DMP) $967 M 0.2427 0.1336 0.1587 35.8854 31.6563 27.3196 0.0197 0.0226 0.0258
Retail Food Group (RFG) $533 M 0.0095 0.0513 0.1396 15.5513 14.7920 12.9800 0.0428 0.0483 0.0550

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
DMP 1.60 31.4 8.06 2.15 3.60
Market 0.83 14.8 1.28 1.89 1.78
Sector 1.35 17.4 1.87 2.40 1.46

Directors
Name Position Start Date
Mr Norman Ross Adler Chairman 23 March 2005
Mr Don Meij Chief Executive Officer,Managing Director 24 August 2001
Mr Barry James Alty Non-Executive Director 23 March 2005
Mr Paul Cave Non-Executive Director 23 March 2005
Mr Grant Bourke Non-Executive Director 24 August 2001

Management
Name Position
Richard Coney Group Chief Financial Officer
Allan Collins Chief Marketing Officer
Andrew Rennie Chief Operating Officer
Craig Ryan Company Secretary
John Harney General Manager Supply Chain
Chris O'Dwyer National Franchise Operations Manager
Melanie Gigon President - France
Andrew Megson President - The Netherlands
Patrick McMichael ustralia / New Zealand Franchise Development Manager

Substantial Shareholders
Holding Name
4,002,300 (5.73%) Capital Group Companies Inc
9,506,413 (13.60%) FMR LLC and FIL (formerly FMR Corp and FIL)
4,316,944 (6.18%) Acorn Capital Limited
3,599,575 (5.15%) Hyperion Asset Management Limited
16,683,217 (23.87%) Somad Holdings Pty Limited
4,278,661 (6.12%) Westpac Banking Corporation Group and its associated companies

Calendar of Events
Date Event
12 February 2014 Report (Interim)
07 October 2013 Report (Annual)
13 August 2013 Report (Prelim)
21 June 2013 Div Pay Date
07 June 2013 Books Close
03 June 2013 Div Ex Date
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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