Domino’s UK launches £20m share buyback

Domino’s UK has launched a £20m share buy-back programme, as the group reaffirmed its full-year forecast and said it was “confident” in the group’s prospects. 

The pizza chain said the move will enable it to take advantage of the opportunity to purchase shares in “meaningful size” at their current share price levels, generating “attractive” returns for its shareholders.

The maximum number of shares that may be purchased is 39,471,274, and the programme is expected to run from today (1 September) until completion.

It comes as the group said Domino’s UK is a “highly cash generative, resilient and market-leading business”, with a “robust” financial position.

It added that its forecast for FY25 remains unchanged from its interim announcement, though year end net debt is now expected to be between £280m and £300m. It previously expected it to be between £260m and £280m.

Domino’s has appointed Panmure Liberum Limited to manage the programme within pre-set parameters, and the programme will be reviewed later in the year.

In its last half-year results, Domino’s saw pre-tax profits plummet 14.8% to £43.7m, as the group was hit by weaker consumer sentiment.

Although sales nudged up 1.4% to £331.5m, underlying EBITDA fell by 7.4% to £63.9m.

The group also recorded lower than expected store openings over the period, as franchisees were “cautious” in light of the increased employment costs they will be facing. 

At the time, Andrew Rennie, CEO said: “Against a more difficult market backdrop, Domino’s is significantly increasing its market share by offering great value, innovative products and even faster delivery times. This is a result of a relentless focus from our colleagues and franchise partners, and I’d like to thank them all for their hard work.

“There’s no getting away from the fact that the market has become tougher both for us and our franchisees, and that’s meant that the positive performance across the first four months didn’t continue into May and June. Given weaker consumer confidence, increased employment costs and uncertainty ahead of the Autumn Statement, franchisees are taking a more cautious approach to store openings for the time being.”

He added: “Despite these near-term challenges we remain confident in our strategy and the prospects for our resilient, market-leading business. That confidence is demonstrated by our decision to increase the interim dividend, and we also continue to assess a range of accretive growth opportunities.”