Domino’s Pizza has delivered a surprise for investors - losing its second finance director in a year.
The company said Paul Doughty - who only joined in June - has resigned and will step down at the end of the year. His predecessor Sean Wilkins stepped down suddenly in January.
Until it finds a replacement chief executive David Wild will be also be responsible for the company’s finance activities.
But the news has not upset the company’s shares. They are up 19p at £11.11 after it repeated that it had seen a strong performance in the third quarter, the new quarter had started well and it was comfortable with the market’s full year expectations.
At the time of Doughty’s appointment the company said he brought “a wealth of experience from a leading consumer brand in the technology and FTSE 250 listed enviroment.” Doughty was previously with Moneysupermarket.com, and broker Peel Hunt said the company now says the move was not right for him. Peel Hunt’s Nick Batram said:
Having spoken to the company, the reason being given for Paul’s exit is that ultimately the move wasn’t right for him, being his first involvement a food services franchise business (previously Paul was at Moneysupermarket.com and Morse Plc)
To lose one chief financial officer in a year looks unfortunate, to lose two looks careless. There may be different reasons for the two departures but Paul’s exit is bound to raise concerns about the working environment at executive level. Given this, the board has no room for error with regard to the next chief financial officer. Perhaps the ideal scenario would be an internal appointment but we believe this is unlikely.
But despite the new uncertainty, Batram kept his add recommendation:
Paul’s departure is not a positive in terms of executive team stability. However, these things happen. Furthermore, we have been impressed with the performance of the business and the strengthening of the relationships with franchisees under David Wild’s tenure...The underlying performance of the business remains strong, we see the room for upgrades not just in 2015 but beyond. The rating is not cheap but the delivery remains impressive and furthermore, Domino’s Pizza doesn’t have the living wage distractions of others in the sector. Given this we retain our add and see the opportunity to raise our target price [of £10] over the coming months.
