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Domino's Pizza UK & IRL plc
Company typePublic (LSE: DOM)
IndustryFoodservice
Founded1985
HeadquartersMilton Keynes, England, UK
Number of locations
732[1]
Area served
United Kingdom, Ireland, Germany
Key people
Lance Batchelor (CEO) Stephen Hemsley (Non-executive chairman)
ServicesMaster franchisee for Domino's Pizza branches in the UK, Ireland and Germany
Revenue£209.9 million (2011)[2]
£42.4 million (2011) [2]
£26.5 million (2011)[2]
Number of employees
20,000 (2012)[3]
Websitewww.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 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. In April 2011, the Group acquired a majority stake in the franchise for Domino’s Pizza stores in Germany.[4]

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, with a store in Dublin.[5] 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.[6] 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).[7] Certain investors such as Colin Halpern and property entrepreneur Nigel Wray[7] retained significant stakes at this time. The company opened its 400th store in Wadsley Bridge, Sheffield in November 2005,[8] with the 500th following in late 2007 in Hatfield.[9] The Domino's share transferred from AIM to the main market of the London Stock Exchange in May 2008,[10] and was promptly added to the FTSE 250 Index at the next quarterly review the following month.[11] In 2009, Domino’s 600th store opened in High Holborn and the company’s first mobile unit took to the road, attending its first festival at Download. The 700th store opened in Willesden in 2011. In April 2011, the Group acquired a majority stake in the exclusive master franchise to own, operate and franchise Domino’s Pizza stores in Germany. [12] There are currently six stores in Germany [13] and Domino’s plans to open 400 in the next ten years [14]

Operations

As of 25 March 2012, there were 732 Domino's stores in the UK, Republic of Ireland and Germany.[15] The greatest concentration of stores is found in the south of the UK, with over 220 outlets in Greater London and South East England.[16] The chain has branches located in all nine regions of England, as well as Wales, Scotland, Northern Ireland and the Republic.[16] An ultimate total of 1,200 branches across the region by 2021 is targeted by the company.[17]

Prospective franchisees are required to pay approximately £280,000[18] to the parent company for the right to operate their own Domino's Pizza outlet.[19][5] Once established, the group also provides other services for the franchisee including production of dough, sourcing and delivery of ingredients and training.[19] The group also delivers IT, advertising and other administrative services on behalf of the franchisees.[19]

Domino’s has a central commissary system which makes dough and supplies this and other fresh ingredients to each store. Domino’s commissaries are located in Milton Keynes, Penrith and Naas in Ireland [20]

Financial information

Domino's Pizza UK & IRL plc financial results.[2][21][22][16][23][24][25]
Year to December 1 Revenue (£ million) EBIT (£m) Net profit (£m) Earnings per share (p)
2011 209.9 42.4 26.5 16.65
2010 188.0 38.0 27.1 15.4
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

Many of the principal shareholders of Domino's Pizza UK & IRL are individuals connected with the company including long-term investor and non-executive director Nigel Wray and former owner Colin Halpern. As of 25 December 2011, major franchiser [26] Moonpal Singh Grewal holds 3.7% and executive chairman Stephen Hemsley owns 2.4%. Institutional shareholders include Barclays Stockbrokers(4.7%) and Standard Life Investments(4.7%).

A further 0.35% of shares are held in treasury stock by the Domino's Pizza UK & IRL plc Employee Benefit Trust.[27]

Labour issues

In 2007 the current affairs programme Newsnight reported on the alleged poor treatment of Domino's Pizza employees.[28] 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".[29] Then-CEO of the company Stephen Hemsley denied that such issues were systemic within the franchise network.[28]

Sponsorship

Domino's Pizza was the sponsor of episodes of The Simpsons on Sky1 between 1998[30] and 2008. In 2007, Ofcom introduced a ban on fast food advertising around programmes aimed at under-sixteens,[31] so the advertising was dropped for a brief period but later resumed. The advertising subsequently became more brand focused, rather than promoting specific products.[32] In October 2008, the company announced that its sponsorship of the show would come to an end.[33] 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 second, third and fourth series of Britain's Got Talent.[34] Orders received on the night of the 2008 final were around a third above those of a typical Saturday night.[34]

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.[35] 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.[36]

References

  1. ^ "Domino's toppings set to be über alles". Retrieved 26 January 2012.
  2. ^ a b c d "Preliminary Results 2011" (PDF). Domino's Pizza UK & IRL. Retrieved 9 April 2012.
  3. ^ "About us". Domino's Pizza UK & IRL. Retrieved 9 April 2012.
  4. ^ "Domino's capitalises on German appetite". 28 April 2011. Retrieved 3 February 2011.
  5. ^ a b "Domino's serves up 25% profit surge". This is Money. 25 July 2006. Retrieved 22 June 2008.
  6. ^ Murray-West, Rosie (17 May 2001). "Wray grabs a larger slice of Domino's". The Daily Telegraph. Retrieved 22 June 2008.
  7. ^ a b English, Simon (18 October 1999). "Domino's Pizza scoots to market". The Daily Telegraph. Retrieved 22 June 2008. [dead link]
  8. ^ "Domino's Pizza Opens UK and Ireland's 400th Store" (Press release). Domino's Pizza UK & IRL, PR Newswire. 1 November 2005. Retrieved 23 June 2008.
  9. ^ "Christmas Trading Update" (PDF). Domino's Pizza UK & IRL. 8 January 2008. Retrieved 23 June 2008.
  10. ^ Dawber, Alistair (19 May 2008). "Small Talk: Domino's savours its move to the main market". The Independent. Retrieved 23 June 2008.
  11. ^ "Ferrexpo and Petrofac to join FTSE 100 as Home Retail and Persimmon ousted". AFX News. Forbes. 11 June 2008. Retrieved 23 June 2008.
  12. ^ "Domino's capitalises on German appetites". FT. Retrieved 12 April 2012.
  13. ^ "(DOM) Domino's Pizza". Interactive Investor.
  14. ^ "Dominos Pizza acquires German franchisee". Sharecast.
  15. ^ "dominos-toppings-set-to-be-ber-alles". thisislondon. 28 March 2012.
  16. ^ a b c "Annual Report 2008" (PDF). Domino's Pizza UK & IRL. Retrieved 28 November 2009.
  17. ^ "Prelim results" (PDF). www7.investorrelations.
  18. ^ "Franchising". Dominos.
  19. ^ a b c "Information pack" (PDF). Domino's Pizza UK & IRL. Retrieved 23 June 2008.
  20. ^ Cite error: The named reference Information pack was invoked but never defined (see the help page).
  21. ^ "Annual Report 2010" (PDF). Domino's Pizza UK & IRL. Retrieved 26 January 2012.
  22. ^ Preliminary Results 2009
  23. ^ "Financial performance: Five year summary". Domino's Pizza UK & IRL. Retrieved 23 June 2008.
  24. ^ "Annual Report 2005" (PDF). Domino's Pizza UK & IRL. Retrieved 23 June 2008.
  25. ^ "Annual Report 2003" (PDF). Domino's Pizza UK & IRL. Retrieved 23 June 2008.
  26. ^ ""Dominos Pizza acquires German franchisee"". Sharecast. Retrieved 27 April 2011.
  27. ^ "Share information: Major shareholders". Domino's Pizza UK & IRL. 29 January 2010. Retrieved 31 May 2010.
  28. ^ a b Shankleman, Martin (27 September 2007). "Domino's staff claim exploitation". BBC News. Retrieved 28 September 2007.
  29. ^ Shankleman, Martin (31 July 2007). "Domino's workers in 'slavery' row". BBC News. Retrieved 28 September 2007.
  30. ^ "Domino's Pizza is 20!" (PDF). Domino's Pizza UK & IRL. Retrieved 24 June 2008.
  31. ^ Thelwell, Emma (24 July 2007). "Simpsons loss cannot spoil Domino's winners". The Daily Telegraph. Retrieved 22 June 2008.
  32. ^ Charles, Gemma (1 April 2008). "The Marketing Profile: Robin Auld of Domino's Pizza". Brand Republic. Retrieved 13 July 2008.
  33. ^ Sweney, Mark (15 October 2008). "Domino's on its last slice of Simpsons". The Guardian. Retrieved 28 November 2009.
  34. ^ a b Gallagher, Rosemary (7 June 2008). "Want a pizza the franchise action?". The Scotsman. Retrieved 22 June 2008.
  35. ^ "Domino's Pizza by TXT service is dangerously good". cnet.co.uk. 20 August 2007. Retrieved 25 May 2010.
  36. ^ "Dominos Facebook widget helps pizza fans earn a crust". Daily Mirror. 13 May 2010. Retrieved 25 May 2010.
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