DP Poland PLC H1 2018 Trading Update (0932V)
July 19 2018 - 2:00AM
UK Regulatory
TIDMDPP
RNS Number : 0932V
DP Poland PLC
19 July 2018
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(1) H1 2018 on H1 2017
-- 13% like-for-like(2) 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(3) , 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(4) 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 more than a third 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 odz 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."
(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 2017 and 1 January
and 30 June 2018
(3) Source: Euromonitor 2018
(4) Domino's Pizza worldwide sales in 2017 $12.2bn. Pizza Hut
worldwide sales in 2017 $12.03bn. Source: Ad Age 20 February
2018
Enquiries:
DP Poland PLC
Peter Shaw, Chief Executive
www.dppoland.com 020 3393 6954
Peel Hunt LLP
Adrian Trimmings / George Sellar 020 7418 8900
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 59 Domino's
Pizza stores, 33 corporately managed, 2 under management contract
and 24 sub-franchised.
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END
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