Does MM like Dominos (DMP) capital raise?

Hi Tony,

DMP went into a trading halt last week to raise $165mn at $65.05, as you say only 2% below its share price at the time, the plan is to use the capital to fund the acquisition of the balance of its German joint venture while any surplus $$ will be used to pay down debt.

The small discount proved relatively unappealing to investors with the stock trading sub $65 on Wednesday and Thursday albeit to a small degree. At MM we’ve successfully steered clear of DMP for a number of reasons over the last year, specifically because growth was slowing but importantly, they rely on sourcing people and ingredients, and they sell into a price conscious demographic.  The cost of people and ingredients has gone up pressuring margins, although we suspect some of this pressure will ease. We also think they will benefit from tougher economic times in 2023 as purchases trade down, however for now, we think it’s still too early to think too positively about DMP.

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Domino’s Pizza Enterprises (DMP)

LAST UPDATED 08/12/2022 16:38

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Domino’s Pizza Enterprises (DMP)

LAST UPDATED 08/12/2022 16:38