Domino’s Pizza

“The pound appears to be reflecting hopes that a (somewhat) revised offer from the EU at the 11th hour can smooth the passage of Theresa May’s Brexit deal through the House of Commons.

“The strong pound is putting pressure on the FTSE 100 as the relative value of overseas earnings takes a knock.

“The late-night drama in Strasbourg felt a bit stage-managed and much will depend on attorney general Geoffrey Cox’s interpretation of the EU’s new assurances that the UK will not be trapped in a customs union by the backstop agreement, the key objection of Brexiteers.

“And the ultimate moment of truth will come tonight when MPs vote. If, against all the odds, May’s deal squeaks through then Wednesday could see a relief rally for sterling as well as UK-focused sectors like real estate, housebuilding and banking.

“Perhaps a more likely scenario is that May’s deal is voted down by a significantly less than the record 230-vote defeat she suffered in January which could point the way to victory in a third vote, perhaps after more concessions from Europe.

“Defeat for the bill is expected to pave the way for MPs to vote on a no-deal Brexit and a possible extension of Article 50. For now, the only thing which remains certain is that without fresh legislation, the default position is for the UK to leave the EU without a deal in a little over two weeks’ time,” says AJ Bell Investment Director Russ Mould.

Domino’s Pizza

“Once the poster child of the franchise industry, profit is now going backwards at Domino’s Pizza.

“Overseas operations continue to be problematic and there has been a backlash against the company by many of its UK franchisees.

“The latter face rising costs and Domino’s decision to split geographical territories means new stores may be less profitable. As such, franchisees have joined forces to lobby for a greater share of profits.

“These two issues have been hanging over Domino’s for some time and today’s full year results don’t install any confidence that they will be resolved soon.

“It would be fair to say Domino’s language is increasingly cautious and that the outlook is gloomy, particularly in light of a slowing UK roll-out and ongoing discussions with franchisees over commercial terms.

“Two things were notably absent from the results, adding to investor woes. There was no comment on current trading which may lead some people to speculate life isn’t getting better for the business. There was also no new share buyback despite the stock trading close to a four-year low. Companies often buy back shares if they think the stock is undervalued.”

These articles are for information purposes only and are not a personal recommendation or advice.