Recession, takeaways push pizza shares up

SHARES in Britain's biggest pizza chain, Domino's Pizza, are set to soar as customers opt to stay in and order takeaways rather than eating out during the recession.

SHARES in Britain's biggest pizza chain, Domino's Pizza, are set to soar as customers opt to stay in and order takeaways rather than eating out during the recession.

The company yesterday announced that strong trading in the third quarter would send its shares soaring to an all-time high.

Chief executive Chris Moore said its marketing campaigns had played a major role in its success.

The company has just completed the second of a three-year sponsorship deal for TV show Britain's Got Talent and has also advertised during the hugely popular X-Factor.

But, said Moore, the recession also had a part to play.

Domino's shares, which have outperformed the FTSE All Share Leisure & Travel index by 46percent over the past 12 months, was at one staged valued at about R600million.

The company, which operates the British and Irish franchises of the global home delivery brand, said like-for-like sales increased by 10,8percent in the third quarter.

Altium Securities upgraded its 2009 pretax profit forecast to R342million, reiterated its 'buy' recommendation and lifted its price target on the stock.

"Domino's has one of the most compelling growth stories within our stock universe. The likelihood of further upgrades to estimates over the forecast period remains high," said Altium analyst Greg Feehely.

Numis, which reiterated its 'buy' recommendation, upgraded its pretax profit forecast for the year to R341million. - Reuters

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