WITH a range of companies announcing plans to make big payouts to shareholders through buy backs in recent weeks, divisions in the corporate world are becoming increasingly clear in a way that could spur much -needed change to the tax system.

Many of the businesses that survived the carnage resulting from the coronavirus crisis are hanging on for dear life. While the significant easing of lockdown restrictions from this week should provide hope for some companies, many firms and their employees will be dreading the end of Government support for jobs under the furlough programme in September.

Others are sitting pretty; in some cases at least partly as a result of their having enjoyed a boost to demand for their services or products that appeared to be related to the coronavirus crisis.

Pizza giant Domino’s gave a flavour of what was to come in March, when it announced plans to return up to £45 million to shareholders through buybacks after recording dramatic growth last year. The buybacks come in addition to the final dividend of 9.1p per share Domino’s paid this month for 2020, worth around £40m in total.

The company’s 2020 results showed Domino’s benefitted from the huge increase in demand for home deliveries resulting from lockdowns. “Online traffic to our sites doubled at the start of the lockdown period and has remained at elevated levels,” said the company.

What Domino’s terms total system sales, which include those of franchisees, rose by 11.4 per cent annually, to a whopping £1.3billion.

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Underlying profits increased by £2.4 million to £101.2m even after the group recorded £9m costs related to Covid-19, which it said reflected moves to support franchisees to trade safely. These were offset by an estimated £3.6m benefit associated with the cut in VAT made by the Government to help the economy amid the coronavirus crisis.

After recording a strong start to the current year, the company said it saw substantial opportunities ahead.

Consumer products giant Unliver upped the ante last month when it said it would pay out up to €3 billon (£2.6bn) this year through share buybacks. The company, whose brands include Domestos and Cif, has noted the impact of elevated demand for surface cleaners.

Supermarket giants, which have enjoyed a big boost to demand as a result of the pandemic even if it has entailed heavy costs, may be preparing to follow suit.

After posting 5.3% growth in first quarter total sales last week, Wm Morrison said it intended to refresh its long-term capital allocation plans when it announces interim results in September.

“During the pandemic there has been a renaissance of the supermarket in Britain and customers are enjoying cooking at home more,” declared the company.

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One firm that has been able to capitalise on a shake-up in high street retailing which has been given fresh impetus by lockdowns joined the list of companies announcing plans for buybacks earlier this month. The Frasers business led by Mike Ashley said it planned to return £60m to shareholders.

The group’s operations range from Sports Direct to the House of Fraser stores chain, which has a flagship outlet in Glasgow.

In April Frasers said that it could cut the book valuation of its properties by £200m to reflect the impact of lockdowns.

Frasers said in January that its famed Jenners store on Edinburgh’s Princes Street would close after the group failed to agree a new rental deal with the owner of the site.

However, in August Frasers bought gym and finess assets from the sports group founded by Mr Ashley’s rival Dave Whelan for up to £43m after the latter group fell into administration. It has increased its holdings in the Hugo Boss fashion and Mulberry bags businesses in recent months.

Some would feel that buybacks can provide a good way for companies to allow investors to share in the success of firms. Others may wonder if a decision to launch a buyback programme signals that the firms concerned simply have more money than directors know what to do with.

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Whatever, the fact that some firms are paying out so much money at a time when the public finances are under huge pressure raises the question of whether the tax system should be changed to allow other stakeholders to benefit alongside shareholders in such cases.