Leading analyst Simon French at Cenkos comments on this morning’s people moves at Greene King and The Restaurant Group (TRG), and on how the latter might have been a beneficiary of the strong trading at Cineworld. At the same time, he says he struggles to identify the growth opportunity derived from Domino’s new partnership with its largest franchisee in London.

Kirk Davis currently chief financial officer of Greene King is leaving to assume the vacant chief financial officer role at The Restaurant Group. He is being replaced at Greene King by Richard Smothers, currently chief financial officer of Mothercare. Both will be joining in February 2018.

French said: “On the face of it this is a strange move with Kirk moving to a much smaller company and one not without its challenges in a very difficult casual dining market. However, he has been at Greene King for three years and prior to that spent a number of years at Wetherspoons. Post the Spirit Group integration we suspect the demands of the chief financial officer role at Greene King have evolved and the challenges and opportunities facing the Restaurant Group may prove more exciting and hands-on.

“For Greene King the appointment of Richard is a further addition to a top team with increasingly broader consumer experience. Neither company has commented on trading but yesterday’s results from Cineworld suggest trading over July was strong and with very wet weather so far in August, we suspect Restaurant Group may be a beneficiary; it reports H1 results on 31 August.

“In another strange move Domino’s has announced a partnership with its largest franchisee in London. It will own 75% of the group, which operates 25 stores, in return for £24m of consideration. It says this will enable the group to take advantage of the significant growth opportunity in the London area.

“However we think London is the most competitive food delivery market in the world (Just Eat, Deliveroo, Uber Eats, Amazon and a whole host of smaller operators) and struggle to identify the growth opportunity. It also fundamentally changes the dynamics of the P&L and the overall investment case from a pure franchisor. We think the stock remains overvalued on a 2017E P/E of 19.2x dropping to 17.4x next year.”