Final results for the full year to 31 December 2017DP Poland PLC (“DP Poland or the “Company”)
Momentum continuing to build. Record number of store openings. 51% growth in System Sales.DP Poland, through its wholly owned subsidiary DP Polska S.A, has the exclusive right to develop, operate and sub-franchise Domino’s Pizza stores in Poland. There are currently 56 Domino’s Pizza stores, 32 corporate, of which 2 are managed under management contract, and 24 sub-franchised.
- 19 stores opened in 2017, from 35 to 54 stores
- 56 stores open to-date 2018
- Total System Sales* up 51% to 58m PLN 2017 (39m PLN 2016)
- 17% like-for-like** growth in System Sales 2017 on 2016
- 21st consecutive quarter of double digit like-for-likes, Q4 2017
- Mature stores are outperforming original expectations in both sales and EBITDA
- Group EBITDA*** losses increased (£1.78m†) 2017 vs (£1.58m††) 2016 at actual exchange rates
- 75% of delivery sales ordered online
- Robust growth in commissary gross profit†††
- First national television advertising campaign in Q1 2018, results are encouraging
- Like for-like growth in System Sales 2018: January 24%, February 18%
Peter Shaw, Chief Executive of DP Poland said:
“Momentum is continuing to build, with a record number of store openings and 51% growth in System Sales in 2017. The Group EBITDA loss increased, 2017 on 2016, impacted by the high number of new corporate store openings in 2017 (stores are initially loss making), margin pressures from inflation in food and labour costs and more aggressive price promotion as we responded to competitive marketing activity.
The greatest volume of System Sales growth over the last 2 years has come from the opening of 31 stores, 2016-17, corporate and sub-franchised. These 31 stores, the majority of the estate, are still immature and as such have significantly lower sales than the more mature stores. The key focus for new stores is to generate sales and acquire customers, EBITDA should follow as the customer count builds. Our most mature corporate stores of 6+ years delivered significantly higher sales and EBITDA in 2017 than our original mature store model predicted.
Our commissary delivered robust growth in gross profit from royalties on sub-franchised store sales and margin on food sales to stores. However we are very mindful of sub-franchisee profitability and, in the context of cost inflation, manage our margins on food sales carefully.
The buoyant Polish consumer economy continues to provide positive conditions for growth, but also brings challenges through greater competition and wage inflation. Looking forward, European cheese prices began to fall in Q1 2018 and are predicted to fall further this year as supply increases.
As the profile of the store estate matures we can expect to see improvement in Group EBITDA on the back of continuing robust growth in System Sales.”
26 March 2018.
- 020 3393 6954DP Poland PLC
- Peter Shaw, Chief Executive
- 020 7418 8900 Peel Hunt
- Adrian Trimmings/George Sellar