Leading analyst Douglas Jack, of Peel Hunt, has upgraded his 2018E and 2019E forecasts for Domino’s by £2m to reflect this morning’s announcement that it has entered into a partnership with its largest franchisee in London.

He said the move was a positive one for a group that is currently under-represented in the capital.

He said: “Historically, Domino’s franchisees have not expanded as quickly in London as they have elsewhere. This acquisition involves a selective group of central London sites, with high address counts, that are ripe for store splits. Domino’s intends to exploit this opportunity by accelerating expansion in London. The transaction is expected to complete in September.

“We believe that five of the key drivers influencing changes in LFL sales are: comparatives (11.3% in H1; 4.3% in H2), innovation (Apple Pay now live; GPS roll out from September), rainfall (down 29% in H2 2016; down 22% in H1); competition, and consumer confidence (value deals/advertising are now to the fore). Competition should remain intense; for the other factors, the backdrop is unlikely to be more adverse in H2 than in H1, in our view.