Domino’s Pizza Shares Hit 52-Week High on Cash Flow Surge

Domino’s Pizza Group (LON: DOM), the master franchise holder for Domino’s Pizza in the UK and Ireland, rose to a fresh 52-week high today after half-year results showed sales, earnings and free cash flow all strengthening, with management reaffirming full-year guidance and raising the interim dividend.

Shares were up 2.59% in morning trade at 209.49p, having climbed from yesterday’s close of 204.2p to an intraday high of 210.6p, a new 52-week high.

The group reported like-for-like sales up 4.9% and like-for-like orders up 1.6% across the 26 weeks to 28 June, with positive monthly growth throughout, driven by core pizza sales, the new CHICK ‘N’ DIP launch and a World Cup uplift. Chief executive Nicola Frampton said: “We have delivered a strong first half, with positive momentum across sales, orders, earnings and cash flow.”

System sales, the total value of orders across franchised and company-run stores, rose 6.1% to £825.3m, while underlying EBITDA, earnings before interest, tax, depreciation and amortisation, increased 3.6% to £66.2m. The standout figure was underlying free cash flow, which rose to £50.2m from £28.7m a year earlier, a jump Sharecast calculated at 74.9%, helped by working capital timing and lower tax payments. That cash generation underpinned a 2.8% rise in the interim dividend to 3.7p, payable on 25 September.

Management said the group remained confident of meeting full-year expectations, with major cost lines hedged for the current financial year and into the next. The explicit guidance reaffirmation, rather than the headline sales beat alone, appeared to be what the market rewarded, given the shares had already priced in a strong first half.

Net debt stood at £290.1m at the half-year mark, with leverage flat at 2.3 times underlying EBITDA excluding lease liabilities. The company also opened its 1,400th store during the period, having added 11 new sites in the first half.