US Edition Domino's Pizza
471.3p -0.6
Questor says HOLD
Wednesday saw yet another excellent update from pizza chain Domino's, the sponsors of Simon Cowell's Britain's Got Talent TV programme.
In the 13 weeks to September 26, like-for-like sales growth at 553 stores came in at an impressive 9.9pc, compared with same-store sales growth of 1.8pc in the equivalent period of last year. This brought the running total for like-for-like sales this year to 12.5pc.
The group has had considerable success with its online offering. E-commerce accounted for 39.7pc of UK delivered sales, up from 29.2pc. Total online sales for the period were up 68.7pc to £33m and have reached £89.9m in the year to date.
Management expects full-year profits to come in at the upper end of current market expectations.
The shares were first tipped on July 21 last year when they were trading at 235¼p. They are now up 100pc compared with a market up 24pc.
Domino's shares are trading on a December 2010 earnings multiple of 30 times, falling to 25.7 next year. This is high, even considering the fact earnings forecasts are likely to rise after this statement. The dividend yield is 2pc, but investors who bought in on the original tip would have locked in a yield of about 4pc.
Because of the high rating the shares are now a hold. Indeed, the average price target of the nine City analysts who are monitored by Bloomberg is 473.89p, a few pence above the current share price. Hold.