Domino’s Pizza shares surge on buyback, dividend news

Published On: March 10, 2021Categories: Stocks & Shares1.4 min read

The company’s revenue grew 11 per cent to £1.35billion and profits by 200 per cent to £56million in the year to December 27

Domino’s Pizza shares surged after it promised to dish out £88million to investors through buybacks and dividends.

Sales soared last year as people turned to takeaways after lockdowns and social distancing measures shut restaurants for months on end.

It picked up 5m customers, many of whom it thinks will keep ordering after the pandemic ends, and order sizes rose by 10 per cent on average as people indulged more.

Revenue grew 11 per cent to £1.35billion and profits by 200 per cent to £56million in the year to December 27.

And the company is now planning to share some of the sales boost during the lockdown with its backers through a £45million share buyback scheme and a 9.1p dividend that will cost £43million.

This would be welcomed by investors at any time, but is especially so now after dozens of major companies slashed their payouts last year, leaving savers, stock market dabblers and pensioners starved of usually reliable extra income.

As one of the ‘winners’ during lockdown, Domino’s is planning to capitalise on last year’s success. It expects to hire 7,000 more people and open another 200 sites. A widespread drive-through service is also in the works to help collection sales.

A rift between the company and its franchisees looks set to be fixed – but nothing has been finalised yet and talks are ongoing.

Many of Domino’s busiest days in 2020 were during events such as Halloween and Christmas, and, after the end of its financial year, New Year’s Eve was its busiest ever day, when it sold an average of 14 pizzas per second.

But there was ample appetite for the group’s stock yesterday, which closed up 8.6 per cent, or 26.8p, at 337.2p.

About the Author: Jonathan Adams

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