Prospect evaluation of Food Service Industry (Dominos Pizza Group Plc) & Super Tyre project
Added on 2023-04-03
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Prospect evaluation of Food Service Industry
(Dominos Pizza Group Plc)
&
Super Tyre project
MODULE: Corporative financial management
Module Leader:
Student No:
(Dominos Pizza Group Plc)
&
Super Tyre project
MODULE: Corporative financial management
Module Leader:
Student No:
SUMMARY
The first segment of the following paper gives us information on the model of
Dominos Pizza Group Plc, a Food service Company which was founded in the year
1960, by an entrepreneur called Tom Monaghan. He started pizza selling as a single
unit in Ypsilanti, Michigan.
We shall go through several key aspects of company like corporate governance,
environmental study, financial information, risk profile, ratio analysis, capital structure
and dividend distribution policy to understand in a better way how Dominos is
operating in recent times. Based on valid progress assumptions, we have calculated
the valuation/ expected market capitalization of Dominos Pizza Group Plc by usage
of the Discounted Cash Flow Method. This method shows that if predicted growth
takes place the company shall provide fair return in future.
Second part of the paper gives an assessment of Super Tyre project on the basis of
NPV, IRR and its discounted payback period. The project must be executed based
on the profitability shown by the applied assumptions. The various workings and
calculations have been shown in detail.
The first segment of the following paper gives us information on the model of
Dominos Pizza Group Plc, a Food service Company which was founded in the year
1960, by an entrepreneur called Tom Monaghan. He started pizza selling as a single
unit in Ypsilanti, Michigan.
We shall go through several key aspects of company like corporate governance,
environmental study, financial information, risk profile, ratio analysis, capital structure
and dividend distribution policy to understand in a better way how Dominos is
operating in recent times. Based on valid progress assumptions, we have calculated
the valuation/ expected market capitalization of Dominos Pizza Group Plc by usage
of the Discounted Cash Flow Method. This method shows that if predicted growth
takes place the company shall provide fair return in future.
Second part of the paper gives an assessment of Super Tyre project on the basis of
NPV, IRR and its discounted payback period. The project must be executed based
on the profitability shown by the applied assumptions. The various workings and
calculations have been shown in detail.
Contents
Introduction to Dominos Pizza Group Plc.....................................................................3
Corporate governance...................................................................................................6
Micro and Macro framework..........................................................................................8
Financial Performance Ratios.....................................................................................10
Liquidity (Acid Test Ratio, Liquidity ratios).............................................................................12
Efficiency............................................................................................................................... 15
Productivity........................................................................................................................... 16
Solvency............................................................................................................................... 16
Profitability............................................................................................................................ 18
Risk profile and Management.....................................................................................20
Optimal analysis of capital structure choices..............................................................23
Dividend policy (Earnings on share)...........................................................................24
Projections and Fair Valuation of the firm using a valuation model (DCF).................26
Conclusion...................................................................................................................28
Super tyre project assessment....................................................................................29
References..................................................................................................................31
Introduction to Dominos Pizza Group Plc.....................................................................3
Corporate governance...................................................................................................6
Micro and Macro framework..........................................................................................8
Financial Performance Ratios.....................................................................................10
Liquidity (Acid Test Ratio, Liquidity ratios).............................................................................12
Efficiency............................................................................................................................... 15
Productivity........................................................................................................................... 16
Solvency............................................................................................................................... 16
Profitability............................................................................................................................ 18
Risk profile and Management.....................................................................................20
Optimal analysis of capital structure choices..............................................................23
Dividend policy (Earnings on share)...........................................................................24
Projections and Fair Valuation of the firm using a valuation model (DCF).................26
Conclusion...................................................................................................................28
Super tyre project assessment....................................................................................29
References..................................................................................................................31
Introduction
Dominos Pizza Group Plc is a based in United Kingdom. It is a master license of the
famous chain of pizza called Domino's Pizza. Dominos Pizza Group Plc has the
limited right to have possession of, function or license branches of the outlet in the
UK, Switzerland, Germany, Liechtenstein, Ireland & Luxembourg. It holds very little
minority interests in the main franchisees for Domino's Pizza in Iceland, Sweden and
Norway. The company has a listing on the London Stock Exchange i.e. the LSE. It is
also a component of the Index Number FTSE 250.
Domino's generates its retributions by Charge of the payments to its licence holders
or franchisees. The charges are based on the use of the brand name of Domino’s
and the marks i.e. a percentage on the total sales. The revenues and earnings are
mostly based from the franchisees in Canada and the U.S., made from the food
supply, sale of the equipments and materials. It also operates large numbers of sole
stores for generation of much more revenues. The local customers provide great
amount of earnings by the purchase of pizzas and beverages.
The Domino’s group falls under the second largest servers of pizza serving chain of
restaurants on a global basis. It is located in over 85 markets and more than 16,100
locations. It was founded in the year 1960 and its base lies in expedient delivery of
pizzas. The brand has a high recognition all over the world, but it focuses mainly on
performing by creation of larger franchisee networks. On an average, the brand has a
sale of 3 million or more pizzas all across the globe.
1
Dominos Pizza Group Plc is a based in United Kingdom. It is a master license of the
famous chain of pizza called Domino's Pizza. Dominos Pizza Group Plc has the
limited right to have possession of, function or license branches of the outlet in the
UK, Switzerland, Germany, Liechtenstein, Ireland & Luxembourg. It holds very little
minority interests in the main franchisees for Domino's Pizza in Iceland, Sweden and
Norway. The company has a listing on the London Stock Exchange i.e. the LSE. It is
also a component of the Index Number FTSE 250.
Domino's generates its retributions by Charge of the payments to its licence holders
or franchisees. The charges are based on the use of the brand name of Domino’s
and the marks i.e. a percentage on the total sales. The revenues and earnings are
mostly based from the franchisees in Canada and the U.S., made from the food
supply, sale of the equipments and materials. It also operates large numbers of sole
stores for generation of much more revenues. The local customers provide great
amount of earnings by the purchase of pizzas and beverages.
The Domino’s group falls under the second largest servers of pizza serving chain of
restaurants on a global basis. It is located in over 85 markets and more than 16,100
locations. It was founded in the year 1960 and its base lies in expedient delivery of
pizzas. The brand has a high recognition all over the world, but it focuses mainly on
performing by creation of larger franchisee networks. On an average, the brand has a
sale of 3 million or more pizzas all across the globe.
1
Shareholding Structure
Majority of the principal shareholders of the Group of the Dominoes Brand are
including both the investors of long-term and the director under non-executive
category. A decent number of shares are carried by Nigel Wray and the former owner
Colin Halpern. In the treasury stock, the Dominos Pizza Group Employee Benefit
Trust holds around 0.35% of shares.
Major Institutional investors are listed below.
2
Majority of the principal shareholders of the Group of the Dominoes Brand are
including both the investors of long-term and the director under non-executive
category. A decent number of shares are carried by Nigel Wray and the former owner
Colin Halpern. In the treasury stock, the Dominos Pizza Group Employee Benefit
Trust holds around 0.35% of shares.
Major Institutional investors are listed below.
2
Corporate Governance
Corporate governance is the essential component of any corporate’s key objectives
and the Board of Domino’s has applied the moralities and requirements in the
Financial Reporting. It has been made according to the United Kingdom Corporate
Governance Code in all years.
The Code which has been duly applied by Domino’s Pizza Group Plc sets out the
moralities and specific requirements on the direction and controlling functions of the
company, so that it may accomplish standards of worthy corporate governance.
Domino’s in its Annual Report, states that its Board has a commitment towards the
requirements of corporate governance and also its corporate social responsibility.
The Board regularly takes note of the corporate governance guiding principles of all
its institutional shareholders and also their evocative bodies.
The UK Corporate Governance Code has an application to all companies which have
a premium listing of their equity shares in the exchange, irrespective of where they
are incorporated, be it in the UK or anywhere else. The company has a mandatory
requirement of reporting as per the Code for every financial year without any fail.
The Company has a recognition that using a system of appropriate governance can
help in delivering the best strategy, safeguarding the interests of the shareholders.
Furthermore, it helps in generating value for shareholders for the overall growth of
the business too.
To abide by good corporate governance, Domino’s Board takes the below
responsibilities:
3
Corporate governance is the essential component of any corporate’s key objectives
and the Board of Domino’s has applied the moralities and requirements in the
Financial Reporting. It has been made according to the United Kingdom Corporate
Governance Code in all years.
The Code which has been duly applied by Domino’s Pizza Group Plc sets out the
moralities and specific requirements on the direction and controlling functions of the
company, so that it may accomplish standards of worthy corporate governance.
Domino’s in its Annual Report, states that its Board has a commitment towards the
requirements of corporate governance and also its corporate social responsibility.
The Board regularly takes note of the corporate governance guiding principles of all
its institutional shareholders and also their evocative bodies.
The UK Corporate Governance Code has an application to all companies which have
a premium listing of their equity shares in the exchange, irrespective of where they
are incorporated, be it in the UK or anywhere else. The company has a mandatory
requirement of reporting as per the Code for every financial year without any fail.
The Company has a recognition that using a system of appropriate governance can
help in delivering the best strategy, safeguarding the interests of the shareholders.
Furthermore, it helps in generating value for shareholders for the overall growth of
the business too.
To abide by good corporate governance, Domino’s Board takes the below
responsibilities:
3
To set and approve the overall policy of the Business Group;
To review the corporate governance engagements;
To exercise control by yearly and periodic review of all matters earmarked
specifically for the Board;
To make and review all major corporate decisions;
To monitor existing trading practices against previously permitted plans;
To review all significant vowed pledges of the company;
To review and regulate Capital Expenditure.
To review any major risks and extenuation strategies to avoid risks;
To plan the Executive and high-ranking management sequence; and
Apart from above, the company has an Anti-Bribery and Corruption Policy in place. It
also has a Non-Audit Services Policy which summarizes the policies and procedures
for the engagement of the Auditors on non-audit assignments. The company is keen
on ensuring there is both gender and age diversity among its employees.
The company also supports Modern Slavery Act 2015 that helps in ensuring about
the not usage of slavery and any kind of human trafficking in the businesses.
4
To review the corporate governance engagements;
To exercise control by yearly and periodic review of all matters earmarked
specifically for the Board;
To make and review all major corporate decisions;
To monitor existing trading practices against previously permitted plans;
To review all significant vowed pledges of the company;
To review and regulate Capital Expenditure.
To review any major risks and extenuation strategies to avoid risks;
To plan the Executive and high-ranking management sequence; and
Apart from above, the company has an Anti-Bribery and Corruption Policy in place. It
also has a Non-Audit Services Policy which summarizes the policies and procedures
for the engagement of the Auditors on non-audit assignments. The company is keen
on ensuring there is both gender and age diversity among its employees.
The company also supports Modern Slavery Act 2015 that helps in ensuring about
the not usage of slavery and any kind of human trafficking in the businesses.
4
Micro and Macro Environment
When it comes to Micro Environment, Domino's Pizza Group Plc is the leading
master franchisee in the Domino's system, when measured by merchandising
transactions and proceeds of the store.
Below is a comparative analysis of various peers of Dominos Pizza Group Plc in
terms of revenue, income, market cap etc.
Initially the Company was known as IRL Plc and Domino's Pizza UK. During May
2012, it transformed its name to Domino's Pizza Group plc. The company runs 1,261
stores in Europe markets.
5
When it comes to Micro Environment, Domino's Pizza Group Plc is the leading
master franchisee in the Domino's system, when measured by merchandising
transactions and proceeds of the store.
Below is a comparative analysis of various peers of Dominos Pizza Group Plc in
terms of revenue, income, market cap etc.
Initially the Company was known as IRL Plc and Domino's Pizza UK. During May
2012, it transformed its name to Domino's Pizza Group plc. The company runs 1,261
stores in Europe markets.
5
End of preview
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