Domino’s Pizza Group PLC (LON:DOM) saw its shares spike Thursday morning after it reported a 7.1% increase in like-for-like sales in the first part of 2018 and gave more cash handouts to shareholders.
Shares in the franchise and pizza outlet group rose 5% to 334.8p as it announced a further share buyback of £50mln and a 12.5% increase in the annual dividend.
READ: Domino’s set to deliver better-than-expected profit after strong finish to 2017
David Wild, Domino’s chief executive, said the group had made progress despite weaker consumer demand and cost inflation.
Total sales, including both franchise and owned outlets, rose 15% to £1.15bn for 52 weeks to December 25, though like-for-like sales growth more than halved to 4.8% after a weak first half.
Sales picked up in the second half, however, and this momentum had carried on into 2018, Domino's said.
Stripping out franchises, own stores saw sales rise 29% to £467mln.
Group profits rose by 10% to £94.4mln on an underlying basis, but fell slightly at the pre-tax level after a number of one-off and impairment charges.
In addition to the heavy payouts to shareholders, Domino's has been spending heavily on its infrastructure, including a new warehouse and supply centre at Warrington.
Domino's is raising its borrowing limits to meet the additional expenditure, but sees it as essential spending for the longer term.
“We continue to take share in the pizza delivery market, and the investment in our new supply chain centre in Warrington will leave us well placed to meet our ambition to get to at least 1,600 sites," said Wild.
At present, it has 1,192 stores across six markets, including 1,045 stores in the UK. A further 65-75 UK stores are set to open in 2018.