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Change to full year results date and COVID-19 update

Delay to full year results due to FCA moratorium


DP Poland PLC (“DP Poland or the “Group”)

Delay to full year results due to FCA moratorium

DPP announces that, whilst the Board had declared an intention to announce the Group’s audited results for the year ended 31 December 2019 on 31 March 2020, it has decided to delay the announcement after considering guidance recently issued by the Financial Conduct Authority and the Financial Reporting Council. The Board has also discussed this matter with the Group’s advisers.

The original reporting date falls within the two-week moratorium recommended by both bodies and the Group will, therefore, report no earlier than 6 April 2020. We are choosing not to set a revised announcement date at this time, mindful that any new commitment could be impacted by further regulatory guidance. We will commit to a new date as soon as the regulatory background becomes clearer.

In line with our announcement on 7 February 2020, the Board expects to report full year results for the year ended 31 December 2019 in line with management expectations: System Sales up 13% to approximately PLN 81m and 3% like-for-like growth in System Sales 2019 over 2018. Cash at bank as at 31 December 2019 was £3.6m; control of cash and costs remain key areas of focus for the Group.

Given the delay to the audited full year results and the increased uncertainty created by the spread of COVID-19, the Group today provides an update on its operational response, current trading and outlook.

COVID-19 response, current trading and outlook

Trading in 2020 started broadly in line with management’s expectations for the full year, with only minimal impact from COVID-19 in the first two months of 2020.

With effect from Saturday, 14 March 2020, the Polish government imposed similar ‘lock down’ restrictions to those now prevailing in the UK, including confining people to their homes except for essential activities (including food shopping, dog-walking, going to work and taking care of elderly relatives). While, as part of these restrictions, all restaurants, clubs, bars, and cafes are closed to the public, restaurants are permitted to provide food deliveries. Other public spaces such as gyms, swimming pools, museums, libraries, cinemas and theatres are also all closed.

We have appointed a senior, fully dedicated COVID-19 team, which is focused on this crisis all day and every day. We are following the advice of government and health authorities to ensure that our stores can continue to operate safely and deliver delicious pizzas to our customers.

DPP therefore continues to trade, making deliveries from all of its 69 stores. The Group’s high level of online ordering of delivery sales (82% in 2019), which supports online payment for food orders, is proving attractive to customers in the prevailing environment. In addition we have introduced a Contactless Delivery and Contactless Carry-out process for customers, which have been well received. Eat In dining has stopped altogether for the present.

Meanwhile, we are currently seeing reductions in the cost of ingredients, particularly in cheese – a key component of most pizzas. In addition, in recent weeks the recruitment market has improved markedly for us.

Our first priority is the health and wellbeing of our people. We follow the health and safety recommendations of the local and national authorities in Poland.

Overall, the situation is changing rapidly, and it is difficult to foresee the potential impact on our business and the further threats and opportunities that may await us. As such, there is little visibility on the potential full year outcome for our 2020 Financial Year at this time. However, for so long as we are permitted to continue to sell and deliver great pizzas to our customers we believe that we are well placed to trade relatively well during the lock down. Nevertheless, we cannot anticipate how our customers might react to circumstances, which change almost daily.

Thanks to the strength of the Domino’s brand and its reputation for quality of food and service, however, the Board is confident of being well positioned for growth and the long-term success of the business.

Iwona Olbrys, CEO, commented:

“Our first priority is to do all we can to support responsibly the global efforts to control the spread of COVID-19, and to safeguard our employees and our customers.

Since arriving at DPP in late September 2019, I have been impressed by the loyalty, skill and commitment of our team. Our competitors rightly regard DPP as a tightly run, high quality operation.

The Coronavirus presents our industry – and business in general in Poland and around the world – with some major obstacles. Nevertheless, I believe that the Domino’s brand, and its reputation for quality of product and service, put us in a good position: much of our competition would love to have such a reputation. We continue to deliver to our customers delicious, hot pizzas, typically within 30 minutes from order.

In light of the Coronavirus concerns, we now offer contact free delivery and carry out. We continue to create new initiatives and seek to adapt to the ‘new world’.

Our customers order their pizzas increasingly on our digital platforms, and pay for their orders on that platform too. In Poland we are possibly ‘best in class’ on this front.

Whilst the outlook for the world at present is uncertain, in this new world I believe that DPP occupies an important position in the Polish Food & Beverage industry.”

Enquiries:

  • 020 3393 6954DP Poland PLC
  • Nick Donaldson, Non-Executive Chairman
  • Iwona Olbryś, CEO
  • 020 7418 8900 Peel Hunt LLP
  • Adrian Trimmings
  • Andrew Clark

Full year trading update for 2019, unaudited

System Sales up 13%. Like-for-likes up 3% for the year, up 6% in H2. 82% of delivery sales ordered online. 69 stores.


DP Poland PLC (“DP Poland or the “Group”)

Full year trading update for 2019, unaudited

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 69 Domino’s Pizza stores across 29 cities and towns, 43 corporately managed, 3 under management contract and 23 sub-franchised.

Group performance in line with management expectations for 2019

  • Cash at bank of £3.6m as at 31 December 2019 (£2.0m as at 31 December 2018)
  • System Sales1 up 13% to 81m PLN 2019 (72m PLN 2018)
    • Including 6 highest monthly levels of System Sales for the Group to date
    • 3% like-for-like2 growth in System Sales 2019 on 2018
    • -1% like-for-like growth in System Sales H1 2019 on H1 2018, reflecting the strong comparatives driven by TV advertising in January and February 2018
    • 6% like-for-like growth in System Sales H2 2019 on H2 2018
  • 82% of delivery sales ordered online (77% 2018)
  • 85% increase in corporate store EBITDA
  • Store numbers in 2019 increased from 63 to 69 stores, satisfying the Domino’s Pizza Master Franchise Agreement requirement
  • 6 new corporate stores opened
  • 3 corporate stores acquired by 2 new sub-franchisees across Poland
  • 2 corporate stores taken under management contract

Iwona Olbryś, Chief Executive of DP Poland said:

“2019 delivered continued expansion and growth in System Sales during the year, notwithstanding the strong comparatives driven by our TV advertising in January and February 2018.

While we continue to experience the impact of competition and labour inflation particularly, we expect to continue to see the positive effects of our well-received marketing campaign, our strong digital presence, and the strength of the Domino’s reputation for quality and service.

Poland’s delivery market is expanding and DPP is well-placed to participate in this growth. Our confidence comes from our positioning in the market place with the Domino’s brand and our experienced team offering to the market great products, service and price.”

DP Poland will release its full year results for 2019 on 31 March 2020.

1 System Sales – total retail sales including sales from corporate and sub-franchised stores, unaudited.

2 Like-for-like System Sales growth in PLN, matching trading periods for the same stores between 1 January and 31 December 2018 and 1 January and 31 December 2019.

Enquiries:

  • 020 3393 6954DP Poland PLC
  • Nick Donaldson, Non-Executive Chairman
  • Iwona Olbryś, CEO
  • 020 7418 8900 Peel Hunt LLP
  • Adrian Trimmings
  • Andrew Clark

New CEO appointed

DPP welcomes Iwona Olbrys as Chief Executive

The board of DPP is delighted to announce the appointment of Iwona Olbrys as Chief Executive of the Company with effect from 1 January 2020. Iwona’s appointment as General Manager of DP Polska S.A. (“DP Polska”), the Company’s wholly-owned Polish subsidiary company, was announced in September 2019. Iwona Jolanta Olbryś, aged 45, who is based in Warsaw, has significant experience in the Food & Beverage sector in Poland, having been the General Director of Telepizza Poland Sp. z o. o. (a business with both owned and sub-franchised stores) for eight years immediately prior to joining DPP. This appointment is in line with DPP’s strategy, announced in February, to focus resources in Poland.

Interim Results for the half year to 30 June 2019

DP Poland PLC (“DP Poland or the “Company”)

System sales up 10%, like-for-likes returning positive from March and more sub-franchisees in place Appointment of General Manager in Poland

Financial highlights:

  • 10% increase in System Sales1 to 41m PLN H1 2019 (37m PLN H1 2018)
    • including the three highest monthly levels of System Sales for the Group to date
  • -1% like-for-like2 growth in System Sales H1 2019 on H1 2018, reflecting the strong comparatives driven by TV advertising in January and February 2018
    • Latest like-for-like System Sales: July +1% and August +8%
    • System Sales growth continuing in September to date
  • Pre-IFRS 16 Group EBITDA5 losses increased, impacted as expected by investment in operations and weaker commissary performance
  • Net cash of £5.1m as at 30 June 2019 (£2.0m as at 31 December 2018)
  • Group performance in line with management expectations for 2019

Operational highlights:

  • 80% of delivery sales ordered online H1 2019 (77% H1 2018)
  • 4 new stores opened in H1 2019, 2 further opened since the period end
  • 69 stores open to-date, across 29 towns and cities
  • 2 further leases signed
  • 3 corporate stores acquired by 2 new sub-franchisees across Poland
  • 3 corporate stores taken under management contract by 1 existing sub-franchisee
  • Appointment of Iwona Olbrys as General Manager in Poland joining from Telepizza Poland; an experienced Food & Beverage executive
  • Positive interaction with aggregator Pyzszne

Nick Donaldson, non-executive Chairman, said:

“DP Poland delivered continued expansion and growth in System Sales across both corporate stores and commissary during the first half of the year, notwithstanding the strong comparatives driven by TV advertising in January and February 2018. March to June 2019 saw positive growth in both like-for-like System Sales and like-for-like order count. Pleasingly, System Sales growth has continued in July, August and September.

We have expanded the store estate to 69 stores. We intend to continue to increase the number of stores through corporate and sub-franchise openings.

We are delighted to announce the appointment of Iwona Olbrys as our new General Manager in Poland, succeeding Peter Shaw. Iwona, who is based in Warsaw, has significant experience in the Food & Beverage sector in Poland, having been the general director of Telepizza Poland – a business with 93 stores, both company owned and sub-franchised – since 2011. This appointment is in line with our strategy, announced in February, to focus our resources in Poland.

The recent headwinds affecting the Polish food delivery sector, including food and labour costs, and the impact of the aggregators on the sector, continue. However we remain confident that, underpinned by our well-invested infrastructure and world-renowned service and products, Domino’s Pizza in Poland will continue to grow in this environment. The strong fundamentals in the Polish economy and continued expansion of the delivery market support the growing opportunity for the Domino’s proposition in Poland.”

25 September 2019

  1. System Sales – total retail sales including sales from corporate and sub-franchised stores, unaudited.
  2. Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2018 and 1 January and 30 June 2019.
  3. When a store’s delivery area is split, by opening a second store in its original delivery area, a significant portion of the original store’s customer database is allocated to the new store, resulting in the original store losing sales.
  4. Sales minus variable costs
  5. Excluding non-cash items, non-recurring items and store pre-opening expenses.
  6. Source: PizzaPortal
  7. Non-like-for-like stores that are less than 12 months old, with no matching trading periods year on year.
  8. Exchange rate average for H1 2019 £1: 4.9158
  9. Exchange rate average for H1 2018 £1: 4.7988
 
    • 020 3393 6954DP Poland PLC
    • Nick Donaldson, non-executive Chairman
    • 020 7418 8900 Peel Hunt
    • Adrian Trimmings/George Sellar
    • A full copy of the interim results can be downloaded below

      Notes to editors:

      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 69 Domino’s Pizza stores, 42 corporately managed (4 of which are under management contract) and 27 sub-franchised.

      Attachments

H1 2019 Trading Update

DP Poland PLC (“DP Poland or the “Company”))

System sales up 10%. Like-for-likes returning positive from March. More sub-franchisees in place.

  • 10% increase in System Sales1 H1 2019 on H1 2018
  • 80% of delivery sales ordered online
  • Like-for-likes building from March 2019:
    • 5% like-for-like growth in System Sales2 March-June 2019 on March-June 2018
    • 6% like-for-like growth in order count3 March-June 2019 on March-June 2018
    • -1% like-for-like growth in System Sales January-June 2019 on January-June 2018
  • 3 corporate stores acquired/agreed to be acquired by 2 new sub-franchisees on 1st July 2019:
    • DP Poland has currently 10 sub-franchisees across Poland
  • 3 corporate stores taken under management contract by 1 existing sub-franchisee
  • 67 stores in 28 towns and cities to-date
  • 4 new stores opened in H1 2019

Nick Donaldson, non–executive Chairman of DP Poland, said:

“The first half of 2019 has seen momentum return to like-for-like performance following the strong comparatives driven by TV advertising in January and February 2018. Like-for-like order count has grown 6% since March. Total System Sales grew 10% in the first half as a result of like-for-like performance and new store openings. Our efforts in sub-franchisee recruitment are bearing fruit with 2 additional sub-franchisees acquiring/agreeing to acquire 3 corporate stores between them this month We have also entered into 3 more management contracts with 1 of our existing sub-franchisees.

We intend to announce our interim results for the six months ended 30 June 2019 on 24 September 2019. ”

 
  • Enquiries:
  • 020 3393 6954DP Poland PLC
  • Nick Donaldson, non-executive Chairman
  • 020 7418 8900 Peel Hunt
  • Adrian Trimmings/George Sellar

Notes to editors

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 67 Domino’s Pizza stores, 43 corporate, of which 4 are managed under management contract, and 24 sub-franchised.

  • 1 System Sales – total retail sales including sales from corporate and sub-franchised stores
  • 2 Like-for-like System Sales growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2018 and 1 January and 30 June 2019
  • 3 Like-for-like growth in the number of orders, matching trading periods for the same stores between 1 January and 30 June 2018 and 1 January and 30 June 2019

AGM Trading Update

DP Poland PLC (“DP Poland or the “Company”))

Ahead of today’s Annual General Meeting, to be held at 9am, DP Poland announces a trading update for Q1 2019, the period from 1 January – 31 March 2019.

  • Trading in line with management expectations
  • 3 new stores opened in Q1, bringing the total number of stores to 66, across 30 towns and cities
  • 4 further leases signed for new sites

Peter Shaw, Chief Executive of DP Poland said:

“Our marketing campaign featuring Damian Kordas launched in the second half of January and has been effective at driving sales, as has our trial partnership with food delivery aggregator Pyszne. All 66 of our stores are now on the Pyszne system.”

 
    • 020 3393 6954DP Poland PLC
    • Peter Shaw, Chief Executive
    • 020 7418 8900 Peel Hunt
    • Adrian Trimmings/George Sellar

Final results for the full year to 31 December 2018

DP Poland PLC (“DP Poland or the “Company”, or the “Group”))

24% increase in System Sales, 18% growth in revenue, 66 stores open to-date

Financial highlights:

  • 24% increase in System Sales* to 72m PLN 2018 (58m PLN 2017)
  • 6% like-for-like** growth in System Sales 2018 on 2017, adjusting for delivery area splits***
  • 18% growth in revenue to 60m PLN 2018 (50m PLN 2017)
  • 85% increase in corporate store EBITDA
  • 21% increase in commissary gross profit†
  • Group EBITDA†† loss (£1.92m•) 2018, versus (£1.78m••) 2017
  • Group loss for the period (£3.79 m•) 2018, versus (£2.63m••) 2017

Operational highlights:

  • 77% of delivery System Sales ordered online 2018 (75% 2017)
  • 9 new stores opened in 2018, 3 further opened in 2019 to-date
  • 66 stores open to-date, across 30 towns and cities
  • Peter Shaw, Chief Executive of DP Poland said:

    “In spite of a challenging second half to the year we achieved a 24% increase in System Sales and significant growth in both corporate store EBITDA and commissary gross profit in 2018. Understanding the external factors that negatively impacted sales growth, namely the unusually warm and dry weather and unprecedented levels of advertising spend by the two main delivery aggregators, has informed our sales and marketing response in 2019.

    We have launched an innovative marketing campaign for 2019 featuring bespoke video and image content that will run throughout the year on digital, rather than traditional, channels, including YouTube, Facebook and Instagram. Alongside this campaign we are trialling a partnership with the largest delivery aggregator, Pyszne (Takeaway.com) and early signs of significant incremental sales look promising as we leverage Pyszne’s advertising spend.

    The share placing completed at the end of February gives the business the requisite funds for further corporate store openings and for investment in sales and marketing.”

    Notes to editor

    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 66 Domino’s Pizza stores, 42 corporately managed, 2 under management contract and 24 sub-franchised.

    26 March 2019

    * System Sales – total retail sales including sales from corporate and sub-franchised stores, unaudited.

    ** Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 31 December 2017 and 1 January and 31 December 2018.

    *** When a store’s delivery area is split, by opening a second store in its original delivery area, a significant portion of the original store’s customer database is allocated to the new store, resulting in the original store losing sales. Calculating pre-split like-for-likes allows us to see sales growth by matched delivery areas, irrespective of the opening of new stores. Pre-split like-for-likes are a standard measure adopted by many major Domino’s Pizza master franchisees. Up to 31 December 2017 we had only split two delivery areas, out of 54 stores, hence not analysing pre-split like-for-likes before 2018. See note under Finance Director’s Review.

    † Sales minus variable costs

    †† Excluding non-cash items, non-recurring items and store pre-opening expenses

    • Exchange rate average for 2018 £1: 4.8169

    •• Exchange rate average for 2017 £1: 4.8950

     

Interviews with Peter Shaw, following the trading update

Following the trading update of 12th December Peter Shaw, Chief Executive, DP Poland PLC was interviewed by both BRR Media and Proactive Investors:

For the BRR Media interview click here

For the Proactive Investors interview click here

All of DP Poland’s interviews can be found on the following sites BRR Media and Proactive Investors. BRR Media interviews can also be found under the About us section of this site, under DPP Webcasts.

Trading update

DP Poland PLC (“DP Poland or the “Company”)

DP Poland plc provides the following trading update for the year to date.

System Sales have grown substantially year-to-date, but as seen in the July and August sales numbers, announced within the interim results, we have seen softening like-for-like sales growth continue into the fourth quarter. A combination of warm and dry weather continuing into November and sustained advertising spend by competing delivery aggregators, in particular, impacted share of voice and sales performance. In addition to these external factors our investment in top-line sales support in Q4 2017 was not replicated in Q4 2018, as we focused more on balancing sales growth with enhanced store profitability.

Despite the sales pressure, Company EBITDA for 2018 is expected to be broadly in line with expectations, but we approach the year ahead with caution and believe that sales and EBITDA performance for 2019 will continue to be impacted by competition for share of voice.

The Company intends to release a full year trading update on 29 January 2019.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Note:

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 62 Domino’s Pizza stores, 36 corporately managed, 2 under management contract and 24 sub-franchised.

 
    • 020 3393 6954DP Poland PLC
    • Peter Shaw, Chief Executive
    • 020 7418 8900 Peel Hunt
    • Adrian Trimmings/George Sellar

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