DP Eurasia N.V Trading Update (7341O)
June 03 2020 - 2:00AM
UK Regulatory
TIDMDPEU
RNS Number : 7341O
DP Eurasia N.V
03 June 2020
For Immediate Release 3 June 2020
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its
subsidiaries, the " Group ")
Trading Update
DP Eurasia (DPEU.L), the master franchisee of the Domino's Pizza
brand in Turkey, Russia, Azerbaijan and Georgia, today provides an
update on its operations with respect to developments that have
taken place since its trading update of 22 April 2020, and its
liquidity.
Operations
In both of its core markets, the Group continues to operate
under government mandated operational constraints due to COVID-19
and remains focused upon ensuring the safety of its staff and
customers. As a result of these operational constraints, dine-in
service has been unavailable in both countries and take-away has
been greatly reduced, especially in Russia. Delivery system sales
have increased by 19% in Turkey and have remained flat in Russia
during the post-COVID period (16 March - 31 May 2020) compared to
the same period last year.
In Turkey, the Group has been able to operate a consistent
delivery service even during weekend and long-weekend curfews,
which have continued to be in effect. The number of cities under
curfew, which started with 31 cities, has been decreasing over the
last few weekends except for the 23-26 May long weekend of Eid
holiday, when the entire country was placed under curfew. Take-away
service has also been available with the exception of curfew
periods. Excluding ten stores located in shopping malls, all
Turkish stores are currently operational, and the government lifted
the dine-in restriction in restaurants as at 1 June 2020.
In Russia, 26 stores remain temporarily closed for reasons of
labour optimisation. All other stores continue to provide delivery
and take-away services, though Russia has been under strict
lockdown measures which have been extended to 15 June 2020. The
actions undertaken as part of the Group's Russian plan have been
showing progress in delivery; however, the impact of COVID-19 is
making it difficult to gauge the full benefits of the Russian
plan.
The Group's sales performance is as follows:
Pre-COVID Post-COVID
(1 Jan-15 (16 Mar-31
System sales(1) like-for-like growth(2) Mar) May)
Turkey 23.5% 2.7%
Russia (based on RUB) -10.2% -31.8%
Pre-COVID y-o-y growth Post-COVID y-o-y growth
(1 Jan-15 Mar) (16 Mar-31 May)
(in millions of TRY, unless otherwise
System sales(1) indicated)
Turkey 200.6 26.2% 153.2 0.7%
Russia 113.1 9.6% 68.8 -34.0%
Azerbaijan & Georgia 5.6 43.3% 5.4 29.3%
Total 319.3 20.0% 227.4 -12.7%
Russian pre-COVID and post-COVID system sales decreased by 6.3%
and 34.5%, respectively, in RUB terms. Additionally, the post-COVID
period in 2020 includes the entire month of Ramadan and the Eid in
Turkey, whereas the comparable period in 2019 only includes 26 days
of Ramadan. Comparing trading during Ramadan and the Eid in the
current and prior periods (being 25 April to 26 May 2020 against 6
May to 6 June 2019), Turkish like-for-like growth and the increase
in system sales were 12.7% and 5.6%, respectively.
Liquidity
The Group continues to have a strong liquidity position, having
access to cash at hand and additional borrowing capacity available
from its Turkish banks. As at 1 June 2020, the Group had TRY 144
million of cash at hand and additional available bank lines of TRY
136 million.
The Group is in a constructive dialogue with Sberbank regarding
its covenants for the remainder of the year. The Group can either
look to obtain a covenant waiver or repay the loan voluntarily. The
principal outstanding under the Sberbank loan currently amounts to
RUB 1.6 billion, of which RUB 0.3 billion is supported by a cash
collateral deposit. The Group's strong liquidity position enables
it to prepay its bank borrowings in Russia if required, and still
maintain a strong liquidity position.
Outlook
As steps to ease governmental restrictions are being taken in
Turkey, the Group is experiencing a pick-up in take-away sales in
the cities where weekend curfews are being lifted. The government
also lifted the ban for dine-in as at 1 June 2020. Whilst Russia is
behind Turkey in terms of starting this normalisation process, the
Group is more comfortable that a full shut down of its stores in
its markets in the future is a very remote possibility. Assuming
that the current operational constraints do not significantly
worsen, the Group remains confident in its plans for business
continuity and cash flow.
Enquiries
DP Eurasia N.V.
Selim Kender, Chief Strategy Officer &
Head of Investor Relations +90 212 280 9636
Buchanan (Financial Communications)
Richard Oldworth / Victoria Hayns / Tilly +44 20 7466 5000
Abraham dp@buchanan.uk.com
Notes
(1) System sales are sales generated by the Group's corporate
and franchised stores to external customers and do not represent
revenue of the Group.
(2) Like-for-like growth is a comparison of sales between two
periods that compares system sales of existing system stores. The
Group's system stores that are included in like-for-like system
sales comparisons are those that have operated for at least 52
weeks preceding the beginning of the first month of the period used
in the like-for-like comparisons for a certain reporting period,
assuming the relevant system store has not subsequently closed or
been "split" (which involves the Group opening an additional store
within the same map of an existing store or in an overlapping
area).
Notes to Editors
DP Eurasia N.V. is the exclusive master franchisee of the
Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The
Company was admitted to the premium listing segment of the Official
List of the Financial Conduct Authority and to trading on the main
market for listed securities of the London Stock Exchange plc on 3
July 2017. The Company (together with its subsidiaries, the " Group
" ) is the largest pizza delivery company in Turkey and the third
largest in Russia. The Group offers pizza delivery and takeaway/
eat-in facilities at its 765 stores (550 in Turkey, 203 in Russia,
eight in Azerbaijan and four in Georgia as at 24 May 2020), and
operates through its owned corporate stores (32%) and franchised
stores (68%). The Group maintains a strategic balance between
corporate and franchised stores, establishing networks of corporate
stores in its most densely populated areas to provide a development
platform upon which to promote best practice and maximise
profitability. The Group has adapted the Domino's Pizza globally
proven business model to its local markets.
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END
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