Is Domino’s Pizza UK Gearing Well For The CEO Succession Plan?

  • Mar 28, 2019 GMT
  • Team Kalkine
Is Domino’s Pizza UK Gearing Well For The CEO Succession Plan?

Domino's Pizza is a British pizza delivery company, based in Buckinghamshire, United Kingdom. The group holds the exclusive right to own, operate and franchise branches of Domino's brand in several European countries, including the United Kingdom, and is a major player in the Republic of Ireland and several other markets.

The board has held “internal debates” over succession planning for David Wild (Chief Executive) and Stephen Hemsley (Chairman), the company has confirmed on Tuesday. 

Domino’s had indicated in its annual report last week that its board expects UK store openings will be lower than 2018 given the ongoing franchisee discussions. The report notes that the inflationary environment has contributed to a period of extra intense commercial discussions with franchisees which have continued into the new year. It expects continued development in the UK and the group has also reiterated its target for International sales to breakeven.

The company said that the group would not “speculate on the outcome of any board changes and will update the market as and when there are any further developments.”

Mr Stephen Hemsley and Ms Helen Keays have served on the board for nine and seven years respectively. According to changes last year to the UK’s corporate governance code, board chair has remained unchanged for more than nine-year years.

In a statement in the report, Mr Hemsley said, “the timing and sequencing of these board changes must be appropriate for the business”. He added that the nominations committee had agreed to extend his tenure by at least 12 months in order to “facilitate orderly succession planning”.

In recent weeks, Domino’s management has been in a rift with its franchisees. According to media reports, franchisees were refusing to open more stores until they receive a greater share in profits. Associates of the Domino’s Franchisee said that their share of earnings had decreased from 61% to 50% in the previous four years.

Domino’s share price has decreased by nearly 30 per cent in the past 12 months as it has struggled with its European expansion plans and a drop-in profit. In its full-year results earlier this month, the company reported losses for its recently opened Swiss, Norwegian and Swedish businesses.

The changes in the UK corporate governance code has putting pressure on many companies to change their board of Directors. Last week, gambling company GVC confirmed that it was reviewing the tenure of chairman Lee Feldman. Similarly, in February, Imperial Tobacco said that it would be seeking a new chairman to replace current chairman Mark Williamson who has been in the post for the past 12 years.

Domino’s UK is the leading franchisee of America’s Domino’s, which holds exclusive franchise rights in six European markets, including the UK, Norway and Sweden. The company shares closed 1.037 per cent higher at GBX 243.5 on March 27, 2019.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK