viewDP Poland PLC

DP Poland trialling partnership with the country's largest delivery aggregator

"The share placing completed at the end of February gives the business the requisite funds for further corporate store openings and investment in sales and marketing," said CEO, Peter Shaw

Domino's Pizza International awarded DP Poland a second consecutive "Gold Franny" award for sales growth and quality standards

Pizza chain operator DP Poland PLC (LON:DPP) is trying out a partnership with Poland's largest takeaway delivery aggregator and the early signs are promising.

The company, which operates the Domino's Pizza franchise in Poland, has already warned the market that it faced increased competition in the second half of 2018 from the two main delivery aggregators and it has evidently decided that if you can't beat 'em, join 'em.

“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 significant advertising spend,” revealed Peter Shaw, the chief executive officer (CEO) of DP Poland.

READ: DP Poland expects 2018 earnings to be in line with expectations, approaches 2019 with caution

In 2018, system sales rose 24% to 72mln Polish zloty (PLN) from PLN 58mln in 2017, despite the tough second half to the year.

On a like-for-like basis, adjusted for delivery splits (i.e. new outlets cannibalising the sales of nearby outlets), system sales were up 6% year-on-year.

The group's revenue rose 18% to PLN 60mln from PLN 50mln in 2017, or to £12.37mln from £10.38mln in sterling terms.

The group's underlying loss (LBITDA) widened slightly to £1.92mln from £1.78mln in 2017 (using average exchange rates), as a result of the lower than expected sales in the second half of the year.

The loss before tax (using actual exchange rates) deepened to £3.79mln from £2.63mln and included provisions for impairments against leasehold improvements relating to possible store closures and the possible sale of certain corporate stores to sub-franchisees, plus possible sub-franchisee bad debt.

Last year, a number of the company's corporate stores were identified as 'underperformers' and specific plans were put in place to turn those performances around. DP Poland said it is seeing some positive responses to these actions.

“We are also discussing the possible sale of some of these stores, to sub-franchise, and we are considering the possibility of some closures for those stores where their location is a particular challenge,” said CEO Peter Shaw.

Shaw, who, it was revealed in February, will be stepping down from the CEO role in June, said the company put in a solid performance in 2018.

"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,” Shaw said.

“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,” he added.


Quick facts: DP Poland PLC

Price: 8.5 GBX

Market: AIM
Market Cap: £21.55 m

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