Domino's Pizza UK & IRL

Domino's Pizza UK & IRL plc

Type	Public (LSE: DOM)
Industry	Foodservice
Founded	1994
Headquarters	Milton Keynes, England, UK
Number of locations	over 600[1]
Area served	United Kingdom, Ireland
Key people	Stephen Hemsley (Executive chairman), Chris Moore (CEO)
Services	Master franchisee for Domino's Pizza branches in the UK and Ireland
Revenue	£188.6 million (2010)[2]
Operating income	£38.0 million (2010)[2]
Profit	£24.1 million (2010)[2]
Employees	330 (2008)[1]
Website	www.dominos.uk.com

The exterior of a Domino's Pizza store in North London, England.

Domino's delivery motorcycles outside a store in East Finchley, London.

Domino's Pizza UK & IRL plc (LSE: DOM) is a United Kingdom-based franchisee of international fast food pizza delivery chain Domino's Pizza. Through its subsidiary Domino's Pizza Group, the company holds the exclusive right to own, operate and in turn franchise branches of the chain in the United Kingdom and Ireland. The firm's shares are listed on the London Stock Exchange and are a constituent of the FTSE 250 Index as of June 2008.

History

See also: Domino's Pizza

The Domino's Pizza company was founded in 1960 by American entrepreneur Tom Monaghan as a single pizzeria in Ypsilanti, Michigan. Through franchising, the firm had opened 200 American locations by 1978. The first British branch opened in Luton in 1985, with expansion into Ireland following six years later.^[3] The master franchise for the British Isles was sold off by the parent company in 1993 to Domino's Pizza Group, a subsidiary of the International Franchise Systems holding company controlled by sibling investors Colin and Gerry Halpern.^[4] The company partially floated its shares on London's Alternative Investment Market in 1999, by which time it had expanded to a network of almost 200 branches (of which all but eight were franchises).^[5] Certain investors such as Colin Halpern and property entrepreneur Nigel Wray^[5] retained significant stakes at this time. The company opened its 400th store in Wadsley Bridge, Sheffield in November 2005,^[6] with the 500th following in late 2007.^[7] The Domino's share transferred from AIM to the main market of the London Stock Exchange in May 2008,^[8] and was promptly added to the FTSE 250 Index at the next quarterly review the following month.^[9]

Operations

At the end of 2008 there were 553 branches of Domino's Pizza in the UK and Ireland, of which only one was wholly owned by the parent company.^[10] The greatest concentration of stores is found in the south of the UK, with over 175 outlets in Greater London and South East England.^[1] The chain has branches located in all nine regions of England, as well as Wales, Scotland, Northern Ireland and the Republic.^[1] An ultimate total of around 1,000 branches across the region is targeted by the company.^[6] Prospective franchisees are required to pay approximately £250,000 to the parent company for the right to operate their own Domino's Pizza outlet.^[11][3] Once established, the group also provides other services for the franchisee including production of dough, sourcing and delivery of ingredients and training.^[11] The group also delivers IT, advertising and other administrative services on behalf of the franchisees.^[11]

Financial information

Domino's Pizza UK & IRL plc financial results.^{[2][12][1][10][13][14]}

Year to December 1	Revenue (£ million)	EBIT (£m)	Net profit (£m)	Earnings per share (p)
2010	188.6	38.0	24.1	17.4
2009	155.0	30.0	33.6	13.8
2008	136.0	22.5	15.7	10.9
2007	114.9	18.3	13.2	8.4
2006	95.0	13.7	10.0	6.2
2005	81.7	10.4	8.3	5.1
2004	74.2	9.1	6.7	4.1
2003	61.6	6.0	4.6	2.8

^1 - Accounts to 2005 prepared according to United Kingdom Generally Accepted Accounting Principles. Accounts from 2006 onwards prepared according to International Financial Reporting Standards.

Shareholder structure

As of 29 January 2010, many of the principal shareholders of Domino's Pizza UK & IRL are individuals connected with the company: long-term investor and non-executive director Nigel Wray holds a 15.6% stake, while former owner Colin Halpern retains 3.1%. Major franchiser^[15] Moonpal Singh Grewal holds 6.9% and executive chairman Stephen Hemsley owns 2.5%. Institutional shareholders include Capital Group (5.4%), Barclays Stockbrokers (5.2%), Standard Life Investments (5.1%), BlackRock (3.4%) and Legal & General Investment Management (3.2%). A further 3.5% of shares are held in treasury stock by the Domino's Pizza UK & IRL plc Employee Benefit Trust.^[16]

Labour issues

In 2007 the current affairs programme Newsnight reported on the alleged poor treatment of Domino's Pizza employees.^[17] Workers at one franchise claimed to be victims of "modern day slavery", according to union T&G Unite, with money unlawfully deducted from the workers' pay sometimes leaving workers being paid nothing or even made to pay the company. Some of the deductions made by the company included the costs of insuring the cars used to deliver pizzas, and one worker was deducted all her wages for the first week of work because the franchise designated it "unpaid training".^[18] Then-CEO of the company Stephen Hemsley denied, however, that such issues were systemic within the franchise network.^[17]

Sponsorship

Domino's Pizza was the sponsor of episodes of The Simpsons on Sky1 between 1998^[19] and 2008. In 2007, Ofcom introduced a ban on fast food advertising around programmes aimed at under sixteens,^[20] so the advertising was dropped for a brief period but later resumed. The advertising subsequently became more brand focused, rather than promoting specific products.^[21] In October 2008, the company announced that its sponsorship of the show would come to an end.^[22] The firm has also sponsored episodes of The Simpsons on Channel 4 (which were previously sponsored by Pizza Hut). In 2006, Domino's launched products based on the show such as the "Homer's Hot Stuff" pizza, along with TV advertising featuring the characters. Domino's has also sponsored the first four series of Britain's Got Talent.^[23] Orders received on the night of the 2008 final were around a third above those of a typical Saturday night.^[23]

Digital strategy

In 2007 Domino's became the first pizza company in the UK to launch a service that allows customers to order pizzas by text message.^[24] In 2010, it launched a widget for social network sites, allowing any user with a blog, Facebook or MySpace account to promote Domino’s Pizza and receive a cash reward every time an order is placed through the widget.^[25]

References

1. ^ ^{a b c d e} "Annual Report 2008". Domino's Pizza UK & IRL. http://ww7.investorrelations.co.uk/dominos/uploads/reports/2008AnnualReport.pdf. Retrieved 2009-11-28. 
2. ^ ^{a b c d} Preliminary Results 2010
3. ^ ^{a b} "Domino's serves up 25% profit surge". This is Money. 25 July 2006. http://www.thisismoney.co.uk/news/article.html?in_article_id=411069&in_page_id=2. Retrieved 2008-06-22. 
4. ^ Murray-West, Rosie (17 May 2001). "Wray grabs a larger slice of Domino's". The Daily Telegraph. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2001/05/17/cnwray18.xml. Retrieved 2008-06-22. 
5. ^ ^{a b} English, Simon (18 October 1999). "Domino's Pizza scoots to market". The Daily Telegraph. http://www.telegraph.co.uk/htmlContent.jhtml?html=/archive/1999/10/18/cndom18.html. Retrieved 2008-06-22. ^{[dead link]}
6. ^ ^{a b} "Domino's Pizza Opens UK and Ireland's 400th Store" (Press release). Domino's Pizza UK & IRL, PR Newswire. 1 November 2005. http://www.prnewswire.co.uk/cgi/news/release?id=157231. Retrieved 2008-06-23. 
7. ^ "Christmas Trading Update". Domino's Pizza UK & IRL. 8 January 2008. http://www.dominos.uk.com/media_centre/pdf/Christmas%20Trading%20Update.pdf. Retrieved 2008-06-23. 
8. ^ Dawber, Alistair (19 May 2008). "Small Talk: Domino's savours its move to the main market". The Independent. http://www.independent.co.uk/news/business/sharewatch/small-talk-dominos-savours-its-move-to-the-main-market-830646.html. Retrieved 2008-06-23. 
9. ^ "Ferrexpo and Petrofac to join FTSE 100 as Home Retail and Persimmon ousted". AFX News (Forbes). 11 June 2008. http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/11/afx5105331.html. Retrieved 2008-06-23. 
10. ^ ^{a b} "Financial performance: Five year summary". Domino's Pizza UK & IRL. http://ww7.investorrelations.co.uk/dominos/financial/index.jsp. Retrieved 2008-06-23. 
11. ^ ^{a b c} "Information pack". Domino's Pizza UK & IRL. http://www.dominos.uk.com/pdf/information_pack.pdf. Retrieved 2008-06-23. 
12. ^ Preliminary Results 2009
13. ^ "Annual Report 2005". Domino's Pizza UK & IRL. http://ww7.investorrelations.co.uk/dominos/uploads/reports/AR_270306.pdf. Retrieved 2008-06-23. 
14. ^ "Annual Report 2003". Domino's Pizza UK & IRL. http://ww7.investorrelations.co.uk/dominos/uploads/reports/AR2003.pdf. Retrieved 2008-06-23. 
15. ^ "Party's big name backers". Surrey Advertiser. 14 January 2008. http://www.getsurrey.co.uk/news/s/2020185_partys_big_name_backers. Retrieved 2008-06-23. 
16. ^ "Share information: Major shareholders". Domino's Pizza UK & IRL. 29 January 2010. http://ww7.investorrelations.co.uk/dominos/shares/major_holders.jsp. Retrieved 31 May 2010. 
17. ^ ^{a b} Shankleman, Martin (2007-09-27). "Domino's staff claim exploitation". BBC News. http://news.bbc.co.uk/1/hi/business/7017152.stm. Retrieved 2007-09-28. 
18. ^ Shankleman, Martin (2007-07-31). "Domino's workers in 'slavery' row". BBC News. http://news.bbc.co.uk/1/hi/business/6922951.stm. Retrieved 2007-09-28. 
19. ^ "Domino’s Pizza is 20!". Domino's Pizza UK & IRL. http://www.dominos.uk.com/media_centre/pdf/FINALFACTSHEET.pdf. Retrieved 2008-06-24. 
20. ^ Thelwell, Emma (24 July 2007). "Simpsons loss cannot spoil Domino's winners". The Daily Telegraph. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/24/cndomino124.xml. Retrieved 2008-06-22. 
21. ^ Charles, Gemma (1 April 2008). "The Marketing Profile: Robin Auld of Domino's Pizza". Brand Republic. http://www.brandrepublic.com/InDepth/Features/798396/Marketing-Profile-Robin-Auld-Dominos-Pizza/. Retrieved 2008-07-13. 
22. ^ Sweney, Mark (15 October 2008). "Domino's on its last slice of Simpsons". The Guardian. http://www.guardian.co.uk/media/2008/oct/15/marketingandpr-bskyb. Retrieved 28 November 2009. 
23. ^ ^{a b} Gallagher, Rosemary (7 June 2008). "Want a pizza the franchise action?". The Scotsman. http://business.scotsman.com/fooddrinkagriculture/Want-a-pizza-the-franchise.4163289.jp. Retrieved 2008-06-22. 
24. ^ "Domino's Pizza by TXT service is dangerously good". cnet.co.uk. 20 August 2007. http://reviews.cnet.co.uk/andrewlim/0,139101708,49292308,00.htm. Retrieved 2010-05-25. 
25. ^ "Dominos Facebook widget helps pizza fans earn a crust". Daily Mirror. 13 May 2010. http://www.mirror.co.uk/news/technology/2010/05/13/dominos-facebook-widget-helps-pizza-fans-earn-a-crust-115875-22254898/. Retrieved 2010-05-25. 

External links

• Official website
  • UK consumer site
  • Ireland consumer site
• Profile at Google Finance