Direct Line Insurance Group saw its share price drop 1% in early morning trading on Tuesday as it released mixed financial results for 2021 with one-off costs offsetting a rise in operating profit.

The company reported an operating profit increase of 11.4% to £581.8 million against £522.1 million in 2020.

Direct Line Insurance further reported a pre-tax profit decrease of 1.2% to £446 million against £451.4 million in 2020.

“Direct Line has had a strong end to the year. Especially considering price reforms and a challenging wider backdrop, the reiteration of targets is no mean feat,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

“With more people back on the road following lockdown, motor claim frequency crept back up to normal levels in the second half, which isn’t unexpected.”

The company blamed the decline in profit on a £62.1m increase in restructuring and one-time costs reflecting property portfolio restructuring, alongside the purchase of its Bromley office in 2021.

The Group distributed an interim dividend per share of 7.6p against 7.4p in 2020, alongside a final dividend of 15.1p against 14.7p in 2020.

“Operating profit has increased to £582 million, own brands policies grew as our Home, Commercial and Rescue businesses performed strongly, whilst in Motor we steered a smart path through another uncertain period as the market sought to predict the impact of Covid-19,” said Direct Line CEO Peter James.

“2021 has been a year of significant strategic progress – we’ve successfully completed the main elements of our technology build and data capability, both key enablers of future growth.”

“Our new motor platform is improving our competitiveness, we’ve announced a new partnership with Motability Operations that is expected to see over 640,000 customers join us in 2023 and we’ve extended our Home partnership with NatWest Group until 2027.”

Capricorn Energy saw its share price fall 2.1% to 208.2p in early morning trading on Tuesday after it reported production of 36,500 boepd and $57.1m revenue in 2021.

The oil producer saw a $1 billion return to shareholders over 2021 and 2022, following a tax dispute with the Indian government which ended with a tax refund to the company in 2021.

Capricorn reported further profit following its procuring of Shell’s Egypt operations in 2021.

The company also reported a $895 million post-tax profit after its devastating $394 million loss in 2020.

Capricorn reported an operating loss of $131 million, however, a slight deterioration in its 2020 loss of $130 million.

“2021 was a transformational year for Capricorn; we continued to successfully reshape our portfolio and achieved a positive resolution of our Indian tax dispute,” said Simon Thomson, Chief Executive at Capricorn Energy.

“We acquired an attractive portfolio of low breakeven oil and gas production in Egypt, where we are already delivering production growth and emission reductions, and which has significant further opportunities for value creation.”

“We also retain the balance sheet capacity to further expand the production base through value-accretive acquisitions.”

“We look forward to continuing to deliver our strategic aims in 2022 with a strong commitment to safety, social responsibility and our pathway to net zero carbon emissions by 2040.”

Greggs saw its share price fall 9.1% in early morning Tuesday trading after the company said it saw like-for-like sales drop and warned on rising costs.

The company reported a pre-tax profit of £145.6 million against a £13.7 million loss in 2020.

Greggs further announced a total sales increase of 5.3% to £1.2 billion as they opened new stores. However, sales fell like-for-like 3.3% on a same store basis.

The food producer reported a diluted earnings per share of 114.3p against a 12.9p loss, alongside a final dividend of 42p per share recommended, resulting in a total ordinary dividend of 57p against the lack of dividend from 2020.

Greggs opened 131 shops in 2021 and closed 28 stores. It currently has a total of 2,181 shops trading from 1 January.

The company is scheduled to open 150 stores in 2022 and reportedly aims to reach 3,000 outlets in time.

“We have started 2022 well, helped by the easing of restrictions,” said Greggs CEO Roger Whiteside. 

“Cost pressures are currently more significant than our initial expectations and, as ever, we will work to mitigate the impact of this on customers, however given this dynamic we do not currently expect material profit progression in the year ahead.”

Analysts have warned that rising inflation and labour shortages will result in a more difficult 2022 for the fast food chain.

“Supply chain issues, cost increases, and labour shortages all pose significant and persistent risks for Greggs,” said Third Bridge analyst Ross Hindle.

“Greggs has had to trim its range due to ingredient shortages, now labour shortages might stunt Greggs’ growth ambitions.”

“Investors will be studying how Greggs manages its cost increases, which could turn out to be double-digit, in order to protect its margins in the months ahead.”

M&G generated £2.8bn, exceeding the investment management firm’s goals for capital generation, resulting in a share buyback of £500m.

M&G shares were trading up 13.8% to 202.9p on Tuesday morning after news of shares buyback.

Adjusted operating profit before tax dropped by £67m to £721 in 2021 as a result of reduced benefits from changes in lifespan estimates. Retail and savings segment contributed £660m to that figure whereas the corporate centre took away £254m.

Mergers and Demergers

Targets for mergers have reached fruition ahead of schedule with capital generation targets met, and investor cost reduction of £145 million were realised a year ahead of schedule.

IFA Sandringham Financial Partners was acquired by M&G Wealth in early 2022. Highlights of their acquisitions include a stake in Moneyfarm, a digital wealth platform and the buyout of TCF Investment, model portfolio services provider.

A controlling stake of 90% in responsAbility, an impact investing firm, has been agreed upon for M&G to continue growth in their sustainable investing capacity. The remaining 10% will be acquired in due course.

The group plans to expand into Italy with Future+. Future+ is a European version of M&G’s UK PruFund proposition.

John Foley, Chief Executive Officer, M&G said, “it has been another year of robust operational and financial performance, as we have delivered on all our demerger commitments including total capital generation of £2.8 billion over two years, well ahead of our original target.”

“In light of this performance and our strong capital generation we are able to announce today £500 million to be returned to shareholders by way of a buy-back programme, expected to start shortly. Together with dividends paid, we will have returned £1.8 billion of capital to shareholders, equivalent to 32% of M&G’s market value at demerger. Alongside this, we have achieved our annual shareholder cost savings target of £145 million one year ahead of schedule.”

The second interim dividend amounts to 12.2p, in line with M&G’s ‘stable or increasing’ dividends policy.

Dominos saw a 97% increase in statutory profit after tax, going from £38.6m in 2020 to £78.3m 2021, as the pizza chain recovers from the pandemic.

Domino’s top line saw an 11% growth to £560.8m. Underlying profit before tax is £113.9m, up 12.5% from 2020 as a result of strong underlying trading.

Recovery from the pandemic, saw a 5.5% growth in order sales in 2021. Collection orders are still recovering but delivery performed well. Digital channel sales contributed to 91.2% of system sales. Average delivery time was around 25 minutes sustaining the group’s service standards.

Franchisee Resolution and Ventures

In an attempt to speed up long and short term growth, Dominos are set out to tap into their franchisees to help drive new stores and boost marketing.

Investment of £20m has been spread over 3 years to make developments in their e-commerce app development and in-store innovations. Marketing investments have grown too, in order to promote new national campaigns.

Franchisee’s have committed to increase the sales through creating a schedule for new stores, resulting in 45 new stores each year for the next 3 years, out of which 30 have already opened for this years quota. In contrast to previous years, a commitment on participating in the upcoming promotional deals has also been agreed upon. The franchisees have agreed to trial and test new technology and innovations for the benefits of the group.

Investments of £6.6m for 46% shares with an association who is operating 22 stores in Northern Ireland to enable future growth plans of the franchisee. The group has exited from directly operated international markets to focus on the UK and Ireland markets.

The group has opened their 3rd supply chain centre in Cambuslang, Scotland.

Net debt has increased 16.2% to £199.7m as the company paid dividends of £56m and share buybacks of £80m. The proposed final dividend for 2021 is 6.8p bringing the total dividend to 9.8p. The dividend yield is 2.9% which is fairly decent compared to the FTSE 250 average.

“There were two major milestones in the year. First, the launch of our new strategy, which is already delivering outstanding results and a better experience for our customers.”

“Secondly, the resolution with our franchisees which has unlocked further potential within the system. Our franchisees are world class operators and the whole team is already embracing a new era of collaboration, with the system working together more closely than ever before,” said Dominic Paul, Chief Executive Officer, Dominos.

Domino’s shares sunk over 5% in early trade on Tuesday morning, before shares recovered to trade just 1% down at the time of writing.