PIZZA delivery firm Domino’s is poised to reap the early benefits from a turnaround at its German unit as it prepares to deliver a trading update.
The FTSE 250 stock, which is the American brand’s master franchisee for the UK and Ireland, is expected to make a £6 million full-year loss at its German operations when it posts its fourth-quarter figures on Wednesday.
But analysts think Domino’s is turning a corner in the German market, which it entered in 2011, and predict the chain will see the benefits in the coming year.
Lance Batchelor resigned as chief executive last month, just weeks after Sean Wilkins was appointed to succeed Lee Ginsberg when he resigns as finance director at this year’s annual general meeting.
Douglas Jack, an analyst at Numis Securities, said: “Recent weakness reflects the churn in senior management, slower expansion and higher German losses.
“However, we believe all of this could be rectified if the right new chief executive is appointed, in addition to which 2014 should benefit from Germany becoming a growth tailwind.”
Jack added: “The recruitment process for the next chief executive should attract high-quality candidates.”
Domino’s – which has sponsored TV shows such as Britain’s Got Talent and Splash, which returned to STV last night – opened its first UK branch in 1985. The chain opened in Ireland in 1991 and Liechtenstein, Luxembourg and Switzerland in 2012.