TIDMDPP
RNS Number : 8321W
DP Poland PLC
20 April 2023
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
DP Poland PLC
("DP Poland", the "Company" or the "Group")
Q1 2023 unaudited trading update
DP Poland, the operator of pizza stores and restaurants across
Poland and Croatia, is pleased to announce a trading update for Q1
2023.
DP Poland's Chief Executive Officer, Nils Gornall, said:
"It was fantastic to see continued strong sales momentum with
19.2% LFL (like-for-like) sales growth for the Group despite
inflationary pressures, benefitting from the strategic investment
in our first TV campaign for five years. Our drive to reduce
delivery times and increase our customer value proposition resulted
in a five-minute time reduction compared to the same period in
2022.
Inflationary pressures continued through Q1, though we are
seeing the first signs of cost pressures reversing on food. We have
invested in the implementation of a new labour scheduling system,
which is in the process of being rolled out, and have seen some
early cost savings as a result.
In Croatia, Q1 LFL sales increased by 15.7% whilst total system
sales increasing by 53%, benefitting from a new store opening in
2022.
We are planning to announce full year results in June and expect
EBITDA for FY2022 to be in line with market expectations."
Strategic highlights
-- A TV campaign was aired for six weeks from mid-January, this
is the first TV advertising for five years and grew new customer
sales
-- Investment in new labour scheduling system and successful
integration of upgraded accounting systems across entities
Financial & operating highlights
-- Cash at bank of GBP3.6 million as at 31 March 2023 (2022 Year
End: GBP4.0 million). Major investments in Q1 included store
development (one store opening and two store conversions), the TV
campaign, upgrading of the scooter fleet and IT system
enhancements
Poland
-- LFL System Sales(1) increased by 19.4% in Q1 2023 compared to
Q1 2022, benefitting from a satisfactory split between higher
average ticket price and increased order count
-- Total System Sales(2) increased by 15.0% in Q1 2023 compared
to Q1 2022, lower than the LFL sales due to the eight store
closures as part of our post-merger relocation plan to optimize
store locations and improve profitability
-- Dine-in business stays at growth trajectory delivering 30.4%
uplift in sales compared to Q1 2022, benefitting from the removal
of COVID restrictions in March 2022 in Poland
-- Carry-out business performs strongly, up 61.5% on Q1 2022,
benefitting from a strong customer value proposition and growing
awareness of the offer
-- Delivery business increases 9.3% in Q1 2023 compared to Q1
2022, despite strong Q1 2022 base with a massive share of delivery
sales in post-COVID market
Croatia
-- The Croatian business was acquired by DP Poland in June 2022
-- Like for like System Sales(1) increased in Q1 2023 by 15.7% compared to Q1 2022
-- Total System Sales(2) increased in Q1 2023 by 52.9% compared
to Q1 2022, benefitting from the opening of the third store in June
2022
(1) Like-for-like System Sales growth in Polish Z oty and Euro
for Croatia respectively, matching trading periods for the same
stores between 1 January and 31 March 2022 and 1 January and 31
March 2023
(2) System Sales - total retail sales including sales from
corporate and sub-franchised stores, unaudited
Trading performance - Poland
PLNm Q1 2021 Q1 2022 Q1 2023 % change % change
vs. 2021 vs. 2022
-------- -------- -------- ----------
Total System sales 37.5 46.2 53.1 41.7% 15.0%
LFL System sales 35.9 43.7 52.2 45.4% 19.4%
dine-in 0.7 5.0 6.5 804.8% 30.4%
carry-out 3.6 6.4 10.4 185.6% 61.5%
delivery 31.5 32.3 35.3 11.9% 9.3%
-------------------- -------- -------- -------- ---------- ----------
The 15.0% Total System Sales growth, and 19.4% LFL growth in Q1
2023 versus Q1 2022 demonstrate the continued strength in the
growth of the business. This was driven by a recovery of the
dine-in business (up 30.4%), as Q1 2022 results continued to be
affected by COVID-19 restrictions. There has also been a focus on
creating a compelling value proposition in carry-out which drove
strong sales growth, up 61.5%. Despite strong growth in other
channels, delivery sales were up 9.3%.
Delivery times in Q1 2023 were five minutes faster than Q1 2022,
a 16% reduction in the average delivery time. We have continued to
invest in our delivery fleet to ensure the fastest and most
reliable times possible. In early April we received the first
e-bikes, part of a trial to replace scooters, helping us to utilise
Poland's effective cycle routes and reduce CO(2) emissions.
The Group has been reviewing product recipes and promotions
based on consumer feedback and reinforced communication on free
deliveries through the TV campaign, a differentiating value
proposition in the Polish market.
Strong consumer inflation remained a headwind to sales growth in
Q1 2023, though LFL order counts increased year on year.
Inflationary pressures on food costs, energy and labour have
continued the trend from last year and stayed strong over Q1 2023,
however, food price rises are beginning to abate, with some food
costs expected to drop throughout Q2 2023, which should support
EBITDA progression from the levels seen in 2022.
The new labour scheduling system has been launched in Q1 2023,
which is in the process of being rolled out.
The Group expects to announce its final results for the year
ended 31 December 2022 in the first half of June, which will
include a webinar for investors. The Management expects that full
year EBITDA figures for 2022 will be in line with market
expectations.
The person responsible for arranging the release of this
announcement on behalf of the Company is Nils Gornall, CEO.
Enquiries:
DP Poland plc
Nils Gornall , CEO
Tel: +44 (0) 20 3393 6954
Email: ir@dppoland.com
Singer Capital Markets (Nominated Adviser and Broker)
Shaun Dobson
Tel: +44 (0) 20 7496 3000
Notes for editors
About DP Poland plc
DP Poland, has the exclusive right to develop, operate and
sub-franchise Domino's Pizza stores in Poland and Croatia. The
group operates 114 stores and restaurants throughout cities and
towns in Poland and Croatia.
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