Thursday newspaper share tips: Domino's Pizza Group, Brighton Pier Group

9th Jun 2016 15:29

(ShareCast News) - Domino's Pizza Group is starting to look as if it might have same taste appeal for UK investors, suggests the Financial Times' Lex column.It noted a potential swing away from US-quoted Domino's Pizza Inc outshining its London-listed namesake franchisee, breaking a five-year trend."Recently, the companies' returns have been converging. Europe may have the upper hand," the column asserted.Lex said the obvious reason for the performance divergence was Britain's economic tough times following the financial crisis, whereas US pizza eaters recovered their handsome appetites faster.The difference now was that UK consumer confidence had also hit post-crisis highs, accepting present in-out European Union referendum pall.In the US, growth was driven by same-store sales growth rates but actual store numbers had risen more slowly.In the UK, Domino's has opened stores at a fair old clip -- both in Britain and elsewhere in Europe -- but still enjoyed same-store sales growth.Lex observed that the European business model was more reliant on digital sales, and that these were contributing materially to same-store sales rises.London-quoted Domino's Pizza Group had also taken minority investments in Icelandic, Swedish and Norwegian master franchisees, allowing it to participate in their success.By contrast, the US-listed US Domino's Pizza Inc did not own a slice of the UK operation."In a crowded market, Domino's Pizza's strong revenue rally in the US may have run its course," concluded Lex."With more room to grow, European pizza now tastes better."Staying broadly on the takeaway theme, The Telegraph's Questor column suggested avoiding shares in Brighton Pier Group, which owned the south-coast attraction.With the summer sun shining and punters enjoying a takeaway fish-and-chips supper by the sea, Brighton Pier and its multitude of attractions was well located to capture the tourist buck.The pier received about 4.5m visitors a year, and over the past three years it has turned in a steady performance, with revenue growth of about 9% to £13.3m and operating profit growth of 7% a year to £3.5m.But, warned Questor, the one salient risk was cost of repairs to the more than 100 years old structure.The annual maintenance and repair bill totted up to about £700,000 a year, and with one-off capital spending of £4.25m since 2011 came in at about £850,000 a year.The column flagged a detailed underwater survey of the pier due this summer, the last one having been done back in May 2010.The Brighton Pier Group's fortunes were not solely dependent on the success of the pier -- it generated about two thirds of its revenue from bars and a third from the pier, with nearly all the profits coming from the pier."The profits are expected to jump sharply higher in the financial year ended June 2017, with a full year from the pier," noted Questor."We'd stay away until the divers have taken a look below the waterline and we get a look at the first-half next year."