after we all loaded up on lockdown pizza, Domino’s is back in expansion mode. Buy

Linda J. Dodson

Food collection saves Domino’s petrol and so is typically more profitable, but franchisees have gained from offering a simpler menu, as well as from business rates relief and a reduction in VAT to 5pc that runs until January. Analysts at Peel Hunt, the broker, have pencilled in £170,000 of earnings per store this year, a 17pc rise compared with last year.

This boost could pave the way for a long-term thaw in relations. That is the hope of Domino’s new management line-up, completed last week when Neil Smith, stand-in finance director, joined the board permanently. Alternatively, it could spell more bad blood if returns in 2021 don’t match this year’s.

For now, tails are up, as the announcement of 5,000 new jobs and 1,000 apprenticeships demonstrated. Trading appears encouraging despite the Eat Out to Help Out drive that urged people to leave their homes. In the medium term, Domino’s could benefit from the economic stress that will mean fewer high street restaurants.

It remains bullish about competing with takeaway apps such as Deliveroo and Just Eat, hoping that maintaining control of its supply chain, including regional food centres in Warrington and Milton Keynes, where pizza dough and toppings are prepared, is a plus. That’s fine, as long as diners aren’t craving a curry or some noodles.

The lack of accord with franchisees has been a brake on the shares, which are down slightly since Questor said in June 2018 that they were worth holding despite some challenging top-line growth. If Dominic Paul, the chief executive, can get them on side, Domino’s could switch to expansion mode once again.

Currently, it is treading carefully by adding about 20 outlets each year. The 1,150-strong estate in Britain is a long way from the 1,600 takeaways management once thought possible. Also in the in-tray for Mr Paul, who used to run the Costa coffee chain, is finding a buyer for operations in Sweden, Switzerland and Iceland, the distracting remnants of overseas misadventure.

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