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

Interim Results for the half year to 30 June 2018

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

Continued expansion with a 38% increase in System Sales, 61% increase in corporate store EBITDA and a 39% increase in commissary gross profit.

Financial highlights:

  • 38% increase in System Sales* to 37m PLN H1 2018 (27m H1 2017)
  • 15% like-for-like** growth in System Sales H1 2018 on H1 2017, adjusting for delivery area splits***
  • 61% increase in corporate store EBITDA
  • 39% increase in commissary gross profit†
  • Group EBITDA†† losses widen, impacted as expected by investment in commissary and store operations

Operational highlights:

  • 77% of delivery sales ordered online H1 2018 (73% H1 2017)
  • 5 new stores opened in H1 2018, 1 further opened since the period end
  • 60 stores open to-date, across 27 towns and cities
  • 8 further leases already signed
  • Latest like-for-like System Sales (PLN): July +6% and August +1%, adjusting for delivery area splits, impacted by hot weather and very high comparatives
  • July and August 2017

Peter Shaw, Chief Executive of DP Poland said:

“DP Poland delivered continued expansion and strong growth in System Sales and profit across both corporate stores and commissary during the first half of the year. Pleasingly, this was achieved despite unseasonably hot weather impacting sales expectations as previously reported.

We have expanded the store estate by 11% so far this year and anticipate up to 20% expansion for the year as a whole. The store roll-out is underpinned by our expanded commissary capacity, logistics capabilities and area management, providing a strong platform for the Group’s long-term growth plans. We remain convinced by the longer-term growth trajectory of both sales and profit performance, as more stores are opened and as sales continue to grow across the high proportion of currently immature stores.

The Polish food delivery sector continues to grow impressively††† and we are confident that, underpinned by our well-invested infrastructure and world-renowned service and products, Domino’s Pizza in Poland will continue to outperform this growth. The Polish economy’s strong fundamentals and the continued expansion of our market supports the growing opportunity for the highly successful and competitively robust Domino’s proposition in Poland.”

18 September 2018

  • * System Sales – total retail sales including sales from corporate and sub-franchised stores.
  • ** Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2017 and 1 January and 30 June 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. See note under Finance Director’s Review.
  • † Sales minus variable costs
  • †† Sales minus variable costs
  • ††† Source: Euromonitor 2018
  • ‡ Non-like-for-like stores that are less than 12 months old, with no matching trading periods year on year.
  • ‡‡ Exchange rate average for H1 2018 £1: 4.7988
  • ‡‡‡ Exchange rate average for H1 2017 £1: 4.9625
  •  

    H1 2018 Trading Update

    DP Poland PLC (“DP Poland or the “Company”)
    H1 2018 Trading Update

    System Sales up 38%. Like-for-likes 13%. 77% of delivery sales ordered online.

    • 38% increase in System Sales* H1 2018 on H1 2017
    • 13% like-for-like** growth in System Sales H1 2018 on H1 2017
    • 77% of delivery sales ordered online
    • 59 stores in 26 towns and cities to-date
    • 5 new stores opened in H1 2018
    • 6 further leases already signed and a number of stores under construction

    Peter Shaw, Chief Executive of DP Poland said:

    “System Sales grew 38% in the first half of the year as a result of double digit like-for-like sales growth and sales from non-like-for-like stores (those opened within the last 12 months). This robust growth was achieved in spite of unseasonably warm weather in May and June, warm weather tending to suppress home delivery sales. Balancing the warm weather, from the middle of June the World Cup supported sales as football fans ordered delivery pizza while watching matches on TV; the Poland matches generated particularly high sales.

    The proportion of sales ordered online continues to grow and, at 77% of all delivery sales ordered online, Poland is one of the leading Domino’s markets worldwide for online sales. Online ordering is not only very popular with our customers, it is a highly cost-efficient channel to operate.

    Healthy growth in Poland’s consumer economy has encouraged competitive activity as food delivery aggregators and direct pizza delivery competitors have been investing in both marketing and store openings, consequently the Polish home delivery market is showing significant growth†, as witnessed in many other markets. Domino’s Pizza is well positioned in Poland to take long-term advantage of this market growth, through its focused proposition to deliver consistently great tasting, freshly made hot pizza, fast, time after time after time, the fundamental reason why Domino’s Pizza became the world’s number one pizza chain†† by system sales in 2017.

    Following our record number of store openings in 2017 (19 stores opened) we are focused in 2018 on balancing store openings with growing the sales and EBITDA performance of our immature stores. We expect a store to take 12-18 months to reach breakeven and at the beginning of 2018 half of our corporate store estate was less than 12 months old and two thirds less than 24 months old. As the proportion of immature stores reduces, relative to the overall estate, we expect to see a positive impact on Group EBITDA. In this context we have opened 5 corporate stores so far this year and have a pipeline of 6 store leases already signed, with a target of 10+ store openings by the year end, representing c.20% growth in the total store estate 2018 on 2017. As well as corporate store openings we are in discussions with both existing and potential sub-franchisees on opening more sub-franchised stores this year.

    Our new commissary in Łodz is operating very effectively as it nears it first anniversary, producing growing volumes of dough and distributing growing volumes of ingredients to stores, alongside our Warsaw commissary.

    Gross profit margins in both store and commissary P&Ls were boosted in H1 by price deflation in the European cheese market, margin benefits that we share with our sub-franchisees. The price of cheese is material because it accounts for a significant proportion of the food cost of pizza.

    We intend to announce our interims results for the six months ended 30 June 2018 on 18 September.”

    19 July 2018

  • * System Sales – total retail sales including sales from corporate and sub-franchised stores.
  • ** Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2017 and 1 January and 30 June 2018
  • † Source: Euromonitor 2018
  • †† Domino’s Pizza worldwide sales in 2017 $12.2bn. Pizza Hut worldwide sales in 2017 $12.03bn. Source: Ad Age 20 February 2018
  •  
      • 020 3393 6954DP Poland PLC
      • Peter Shaw, Chief Executive
      • 020 7418 8900 Peel Hunt
      • Adrian Trimmings/George Sellar
    Click this link for an interview with Peter Shaw, Chief Executive

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