- Shares gain on appointment of permanent CEO
- High quality candidate with strong track record
- Removes share overhang
It may have taken a year for pizza franchise chain Domino’s Pizza (DOM) to find a permanent replacement for CEO Dominic Paul, who jumped ship for Whitbread (WTB) in June 2022, but investors have given new appointee Andrew Rennie a warm reception with the shares gaining 3.5% to 302.4p.
Rennie has broad experience in the Domino’s system and spent over two decades with Sydney-listed Domino’s Pizza Enterprises (DMP:ASX).
During his tenure as CEO of the European business between 2014 and 2020 the company increased its sales by 4.6 times and profit by 13.5 times.
Chairman Matt Shattock commented: ‘I am delighted to welcome Andrew Rennie as our CEO. Andrew understands the power and potential of the Domino’s brand as well as anyone in the business globally.
‘He is an energetic and entrepreneurial leader with an incredible track record of delivering growth in Domino’s businesses around the world.
‘All of us on the board believe that working with our brilliant colleagues and world-class franchisees, he is just the right person to take the business to the next level.’
A POSITIVE BOOST FOR THE SHARES
Numis analysts Richard Stuber and Tim Barrett consider Rennie a ‘very high quality’ appointment and one that removes a ‘key overhang’ for the share price.
‘We think the lack of a permanent CEO has been a material overhang on the DOM share price and this announcement, particularly noting the calibre of the individual, is likely to be well received. DOM trades on 14x FY24 PER, (price to earnings ratio) almost a 50% discount to Domino’s Pizza Enterprises.’
After analysing the remuneration package Numis estimates it could be worth up to around £6.8 million including a one-off award of premium priced options.
To receive the maximum reward, the share price would need to reach 450p (50% higher than the current price) and 2025 EPS (earnings per share) would need to grow to 28.8p.
The consensus EPS estimate for 2023 is 16.8p implying a 71% increase over the next two years is required to trigger the maximum pay.
Numis has a 2025 base case EPS of 23.5p and a blue sky estimate of 30.5p.
LEARN MORE ABOUT DOMINO’S PIZZA
