UK pizza company Domino’s is planning to return £88m to shareholders through a dividend and share buyback scheme thanks to increased demand for food delivery during the pandemic.
The group, which is a master franchise of Domino’s in the US, announced on Tuesday that it would pay a dividend of 9.1p a share to investors, amounting to £43m. It will supplement this with £45m of share buybacks, having generated £110m of free cash during the year to the end of December 2020.
Its shares rose 11 per cent in morning trading in London after the results were published.
Domino’s said that despite having shut its outlets for collection during the first lockdown, home delivery sales had more than offset the loss and it ended the year with overall revenues up 10.3 per cent to £1.3bn. The drop in in-store collections, however, meant that total order count decreased 6 per cent.
The group said it invested £9m in making stores coronavirus-safe and has been able to open for delivery during the more recent lockdowns. It also reduced net debt by about a quarter to £171m.
The disposal of its lossmaking businesses in Norway and Sweden helped to improve its cash position. Efforts to sell its Swiss and Icelandic businesses are still under way.
The group said it had a medium-term plan to reach between £1.6bn and £1.9bn of sales and open 200 stores.