Browning West LP publishes letter to the Board of Domino’s Pizza Group PLC

LONDON, Sept. 3, 2025 /PRNewswire/ — Browning West, LP (“Browning West”), one of the largest shareholders of Domino’s Pizza Group PLC (“Domino’s” or “the Company”), with an approximate 5% stake, is today publishing a letter sent to the Company’s Board of Directors on 7 August 2025, prior to the Company’s announcement on 1 September 2025 of a £20 million share buyback programme.

In that letter, Browning West called on the Board to pause any acquisitions for six months and to initiate a substantially larger share buyback programme of at least £100 million.

While Domino’s has since announced a £20 million buyback, Browning West believes this step does not go far enough. The concerns and recommendations set out in the letter therefore remain highly relevant, and Browning West considers it important and urgent to facilitate an open discussion between all shareholders on the appropriate scale of capital return and the Company’s strategic direction.

Browning West has been a long-standing shareholder in Domino’s, first investing in 2019, and continues to believe in the Company’s ability to return to sustainable growth in its core business under the leadership of Chief Executive Officer Andrew Rennie. This is why it is important for the Company to aggressively repurchase shares at the largest possible scale while they are highly dislocated.

In addition, given the constraints imposed on the Company by the public markets, Browning West has significant reservations regarding the Board’s ongoing pursuit of a “second brand” acquisition. Browning West believes that if the Board wishes to pursue this strategy, it should take the Company private by actively identifying a credible private equity partner in the next few months.

The full text of Browning West’s letter, as sent to the Board of Directors, is reproduced below.

August 7, 2025
Domino’s Pizza Group plc 1 Thornbury
West Ashland
Milton Keynes
MK6 4BB

Dear Board of Directors,

Browning West, LP (“Browning West”, “us”, or “we”) is a long-standing shareholder of Domino’s Pizza Group (“Domino’s” or “the Company”), having first acquired a stake in the Company in 2019. We originally invested because we recognized the underlying strength of the business and the opportunities for value creation. We currently own approximately 5% of the outstanding shares, making us one of the Company’s largest shareholders. I have a deep understanding of Domino’s, having served as a non-executive director of the Company between 2019 and 2023. From our work together I hope you have always found me and my firm to be thoughtful and considered investors focused on long-term decision making and strategy.

I am writing to you because I believe the Board needs to ⁽ⁱ⁾ pause any contemplated acquisitions for six months, and ⁽ⁱⁱ⁾ immediately initiate a significant share buyback program of at least £100 million to be completed before year end. There are three main reasons for this:

• An Acquisition Will Distract From Returning The Core Business To Growth: In our experience having served on many public company boards, it is very challenging to acquire additional assets when a company’s core business is not stable. Earnings expectations have now declined for each of the past five quarters.⁽ⁱ⁾ Before making new acquisitions, the Board should demonstrate tangible returns on the significant investments in the core pizza business that it has authorized over the past five years. In light of the earnings results this week, it is critical for management to become entirely focused on returning the core Domino’s business to sustainable earnings growth. A key quality of Domino’s business model is the perceived resilience of its earnings. In its 26-year history as a publicly listed business, the Company had reported only two year-over-year earnings declines, and of a much smaller magnitude than the 11% decline in 2025.⁽ⁱⁱ⁾ A big reason why investors are drawn to Domino’s and why they ascribe a high valuation multiple to the business model is the historical stability of earnings, even in difficult economic environments. For example, the Company delivered earnings growth in the GFC, which was considered a very difficult consumer environment.⁽ⁱⁱⁱ⁾ The Board should do everything in its power to return to earnings growth, including adjusting the Company’s cost structure in the context of the weaker economic environment. The Board should not assume that the economic environment will improve; it should right- size the business for the current or even a worsening environment.
• It Is Very Unlikely That An Acquisition Will Be As Accretive To EPS As Share Repurchases: 

  After the nearly 20% share price decline this week, the shares are at a 10-year low.^(iv) The last time the stock was at 200p in 2014, earnings were two-thirds of today’s level and the share count was 100 million higher than today, i.e. the P/E multiple has collapsed from 20x to 11x.^(v) This record low multiple speaks to the magnitude of skepticism on the Company’s growth prospects and the quality of the business. On a forward basis the valuation is even lower if the Board believes its stated long-term goal of growing the store base to 2,000 stores, which was reiterated on the earnings call this week.
   
  We believe it would be a mistake to acquire a business, which adds leverage, integration risk, and distraction ahead of the economic environment potentially weakening. The current P/E valuation is not only the lowest in the Company’s own history, but is also less than half of Domino’s US and 20% lower than Domino’s Australia, which is facing significant operational challenges.^(vi) Incredibly, the Company’s P/E valuation is now 30% lower than stable but low growth large UK utility companies.^(vii)

  We are skeptical that an acquisition of a high quality second brand can be achieved at a lower valuation than the Company’s own valuation, and we are concerned that an acquisition cannot be as accretive to EPS as a share repurchase. We are also concerned by any acquisition that comes with a requirement to invest significant capital and we believe that shareholders will not look favorably on any acquisitions where the Board attempts to justify EPS accretion by adjusting earnings or evaluating accretion more than one year in the future.

• The Board And Management Should Spend The Next Few Months Pursuing A Private Equity Partner If They Wish To Pursue A Multi-Brand Strategy: As I have communicated to you in the past, I believe the Company’s current PLC construct is not well-suited to a multi-brand strategy. The Board has been pushing the multi-brand plan for almost two years, including with this week’s results, and shareholders again demonstrated their concern with the poor stock reaction. The Company is hamstrung by limits on financial leverage, dividend commitments, and an inability for public market investors to tolerate another investment period with integration risks. Because of these limitations, the Board could at best make a relatively small acquisition versus the Company’s current £1.1 billion enterprise value, which means that any acquisition would not be needle moving relative to the Company’s existing business. Such an acquisition strategy will be far easier to execute and at a greater scale in a private setting. If the Board wants to pursue a multi-brand strategy, we encourage Andrew and the management team to take the Company private by actively identifying a credible private equity partner in the next few months. We believe that such an outcome is very logical for all stakeholders, including shareholders who would likely accept a fair premium above the current stock price.

Since the Board announced its strategy to acquire a second brand two years ago, critical factors have recently changed: ⁽ⁱ⁾ the economic environment has worsened and could become increasingly worse, and ⁽ⁱⁱ⁾ the Company’s share price and valuation have fallen lower than could have been imagined. The Board must be dynamic and adjust its strategy given these present realities.

Sincerely,

Usman S. Nabi

ⁱ Market data per Bloomberg as of August 6, 2025. Represents Bloomberg consensus estimates for 2025 earnings per share measured from Q1 2024 through Q2 2025.

ⁱⁱ Domino’s Pizza Group Annual Reports and 2025 Half Year Results Press Release. Earnings growth refers to underlying earnings per share for historical periods and calculates 2025 earnings per share based on the midpoint of guidance.

ⁱⁱⁱ Domino’s Pizza Group Annual Reports. Represents change in underlying earnings per share measured each year from 2007 to 2010.

^iv Market data per Bloomberg as of August 6, 2025.

^v Domino’s Pizza Group Annual Reports and 2025 Half Year Results Press Release. Underlying net income measured from 2014 to 2025 based on the midpoint of guidance and share count is adjusted for share splits.

^vi Market data per Bloomberg as of August 6, 2025. P/E valuation for Domino’s and peers measured on a 2025 calendar year basis. Domino’s P/E valuation calculated using 2025 earnings per share based on the midpoint of guidance and peer P/E valuation calculated using Bloomberg consensus estimates.

^vii Market data per Bloomberg as of August 6, 2025. UK utility companies’ valuation represents average P/E for 2025
calendar year using Bloomberg consensus estimates. Companies include National Grid, SSE, Severn Trent, Centrica, United Utilities Group, Drax Group, Pennon Group, and Telecom Plus.

CONTACT:
Greenbrook
Rob White, Michael Russell, Theo Bryan
Email: BrowningWest@greenbrookadvisory.com
Tel: +44 (0) 20 7952-2000

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