16th Dec 2021 14:38
(Alliance News) - Domino's Pizza Group PLC on Thursday said it has reached a "resolution" with its franchisees.
The master franchiser for the Domino's Pizza delivery brand in the UK and Ireland said the acrimony with its franchise partners had "held the company back", and it can now "begin a new era".
Shares were up 24% at 429.20 pence on Thursday afternoon in London.
Under the terms of the deal, Domino's will make a one-time capital investment of about GBP20 million, spread over three years, to boost digital acceleration. It will increase marketing investment and develop an improved new store incentive scheme, to encourage new site openings. The deal runs for an initial three years from January 3.
Domino's said 2021 results will be in line with expectations. It also confirmed that, despite the increased investments planned as part of the new agreement with franchisees, earnings before interest, tax, depreciation and amortisation, as well as earnings per share, will be in line with current market expectations in 2022. Underlying Ebitda was GBP109.0 million in 2020, while underlying basic EPS was 18.2 pence.
Domino's lifted its medium-term system sales guidance to at least the upper end of the previously announced GBP1.6 billion to GBP1.9 billion target. System sales in 2020 were GBP1.35 billion.
"This is an important moment for Domino's, and I'm delighted we have reached what is truly a great resolution with our franchisees," Chief Executive Officer Dominic Paul said.
By Tom Waite; [email protected]
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