Domino’s Pizza Group PLC (LON:DOM) announced it is paying the final dividend suspended in March but it is not declaring an interim distribution to save cash.
Shareholders will receive 5.56p per share in relation to 2019, for a total cost of £26mln.
READ: Domino’s downgraded following recent share strength as Peel Hunt highlights strong case for dividend return
The pizza chain said trading in the first few weeks of the second half has been encouraging, helped by the return of Premier League football, an increase in UK holidays and the VAT reduction on hot food.
With lockdown restrictions easing, costs related to safety measures are expected to decline to £2mln in the second half compared to £6.2mln in the six months to June.
The franchiser said it is too early to conclude on how consumer behaviour will evolve, though it guided for £20-25mln of capital expenditure for the whole year to build its Scottish supply chain facility and extend the facility in Naas in Ireland.
Domino’s did not provide an update on the dispute with its franchisees but said it has increased communication with them throughout the pandemic, while it also accelerated payment dates and deferred some property rents.
In the six months to June 28, sales in UK & Ireland advanced 5% to £628mln, as the firm was allowed to trade during lockdown, for profit before tax up 14% to £45mln.
Loss from discontinued international operations in Norway, Sweden, Switzerland and Iceland widened 95% to £19mln, with sales down 25% to £37mln.
'Perplexing' lack of franchisee update
The disposal processes are expected to take more time than previously anticipated due to coronavirus disruption.
Analysts at Liberum said the lack of commentary on the franchisee negotiations is "perplexing as no comment has been provided for years now".
"It is not as if, anyone is asking for a running commentary, but surely an update is called for as this is the burning question and could materially impact the outlook and investment case," they noted.
"At headline level, COVID-19 has clearly been a tailwind for franchisee margins due to government interventions and with the VAT cut from 20% to 5% will be used in part to help sustain activity and some franchisees no doubt using this to protect margins. By no measure do we see these government initiatives as long term supports or dissuade our view that underlying the long term trend for franchisees remains negative."
Shares dipped 2% to 317.2p on Tuesday in early trading.
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