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Domino's Pizza UK & IRL - Proposes three-for-one share split

March 2007

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • DOM
  • Price:
  • 667p
Domino's Pizza UK & IRL (to give it its full name) has the Master Franchise agreement with Domino’s Pizza Inc in the US enabling it to operate stores under the Domino’s brand in the UK and Ireland, in exchange for a 2.7% royalty on sales. Of course Domino’s has its own franchisees who in turn pay it a royalty on sales. As history has shown the franchise model has significant benefits, notably the ability for Domino’s to expand without much of a commitment to capital. The model also means that it has only 300 direct employees, of which 130 are in head office and 170 in the central kitchens, compared to 11,000 in the UK Domino’s system. The latest results for 2006 show just what economies of scale ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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