Intro
Domino's Pizza Group is the exclusive master franchise holder for Domino's Pizza in the United Kingdom and Ireland. The company doesn't own the Domino's brand itself – it licenses it from the US-based Domino's Pizza Inc – but it does control the entire UK and Irish operation: the supply chain, the digital platform, and the franchise relationships with the local operators who run about 1,400 stores.
The UK franchise dates back to 1985, when the first store opened in Luton. The master franchise was acquired in 1993. For a while, management tried to replicate the model abroad – Norway, Sweden, Iceland, Switzerland – but those ventures proved costly and distracting. Between 2019 and 2021, the company exited all its directly operated international markets and refocused entirely on the UK and Ireland. It was the right call.
2025 brought more disruption at the top. CEO Andrew Rennie departed by mutual agreement in November after just two years in the role, reportedly over strategic disagreements with the board. The CFO seat was also vacant for much of the year. Despite the leadership churn, the business kept grinding: system sales grew to £1.6 billion and Domino's captured a remarkable 52% share of the UK takeaway pizza market.
Valuation
The shares have been roughly halved from their 2025 highs and now trade around £1.73, giving a market capitalisation of approximately £660 million. At that price, the stock sits on about 10 times underlying earnings – a level that doesn't look demanding for a business with a dominant market position and highly cash-generative franchise economics. The dividend yield is around 6.5%.
Free cash flow came in at £81 million in FY2025. Since March 2021, the company has returned over £500 million to shareholders through dividends and buybacks – a staggering amount relative to today's market cap. A further £20 million buyback was completed in late 2025, and management has signalled that capital allocation priorities will be updated once the new CEO is in place.
What's next?
The near-term picture is admittedly messy. Both the CEO and CFO roles have only recently been filled (or are still being filled), underlying EBITDA dropped 6.6% in FY2025, and like-for-like orders fell 2.3% as UK consumers tightened their belts. Rising labour costs from the 2024 budget weigh on franchisee margins. There is also the inherent risk of operating under a master franchise agreement – the relationship with the US parent must be maintained, and the terms can evolve.
But step back and the picture looks different. This is a business with over 50% market share in its category, a franchise model that requires minimal capital expenditure, and a track record of robust free cash flow generation. The international distractions are gone. Store expansion continues – 31 new openings in FY2025. At a single-digit P/E with a 6.5% yield, the market appears to be pricing in permanent decline for a business that has barely stopped growing.
Current Price
£1.73 per share
Disclosure
The author is currently long DOM.
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