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MARKET REPORT: Domino’s Pizza shares soar as it dishes out £88m divi

Domino’s Pizza shares soared after the group promised to dish out £88million to investors through buybacks and dividends.

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

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

Lockdown winner: Domino’s Pizza sales ballooned last year as people turned to takeaways after lockdowns and social distancing restrictions shut restaurants for months on end

Revenue rose 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 stay-at-home sales boost 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. 

Stock Watch – Genedrive 

Diagnostics group Genedrive has signed a deal with a US military contractor to supply kit that can rapidly test for dangerous pathogens.

By working with Mountain Horse Solutions, Manchester-based Genedrive will be able to bypass what it described as the ‘challenging and time consuming’ process of arranging contracts directly with the US government. 

Its BioPlex products can be used during suspected biological attacks.

Shares rose yesterday by 1.1 per cent, or 1.5p, to 135p.

As one of the ‘lockdown winners’, 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.

Sceptics might wonder how long the takeaway boom can last when restaurants and bars reopen.

Many of Domino’s busiest days in 2020 were party 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.

Baggage handler and plane refueller John Menzies Group was also in demand, as the market looked past a £120.5million loss and predictions that it will not make a full recovery for another two years.

The airport services group – which made a £18million profit last year – saw turnover tumble by more than a third.

But shares rose 2.1 per cent, or 5p, to 240p, as it said it would focus more on cargo operations, which have been less affected by the slump in air travel during Covid.

Covent Garden landlord Capital & Counties, on the other hand, fell out of favour, dropping 1.7 per cent, or 2.9p, to 169.2p. 

The value of its portfolio of properties in the central London shopping and theatre district fell by 26 per cent to £1.9billion last year as rents from its retail and restaurant tenants were pummelled by three lockdowns.

The FTSE 100 finished marginally higher, up 0.2 per cent, or 11.21 points, at 6730.34, held back a drop in miners including Anglo American (down 4.4 per cent, or 133p, to 2885.5p), Rio Tinto (down 3.7 per cent, or 221p, to 5819p) and Evraz (down 2.7 per cent, or 16.2p, to 583.6p).

Cairn Energy fell 3 per cent, or 5.9p, to 192.8p as it unveiled two deals alongside bruising full-year figures. 

It will sell its stakes in two North Sea oil fields for £331million and will spend £233million buying assets in Egypt from Shell (down 0.1 per cent, or 0.8p, to 1487p). 

After rising above $71 a barrel on Monday in the wake of an attack on key infrastructure in Saudi Arabia, oil prices were back below $68 last night. The spike had taken Brent crude to its highest level since May 2019.

Harry Potter-publisher Bloomsbury jumped 5 per cent, or 13p, to 273p after brokers at Peel Hunt upgraded the rating on its stock from ‘hold’ to ‘add’. They believe a drop in its shares over the past month is ‘unmerited given the strong series of Covid updates’.

The FTSE 250 rose 0.81 per cent, or 172.25 points, to 21382.47 points.

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