What it does
Poland is one of the last large high-growth takeaway markets left in Europe.
How is it doing
System sales rose in the first half of 2019 and DPP is looking to continue expanding its sub-franchise estate in the second half.
For the six months ended 30 June, the group reported sales of £8.3mln, 10% higher than the prior year, with the number of orders originating online rising to 80% from 77%.
Like-for-like sales growth dipped slightly by 1% in the period, while pre-tax losses were flat at around £1.8mln.
The figures were bang in line with a trading update issued in July, which had highlighted that despite “strong comparatives” denting LFL sales in January and February, growth had recovered in later months with LFLs in July and August rising 1% and 8% respectively.
Looking ahead, the company said it is in discussions with existing and potential sub-franchisees to open new stores and expected the number to rise in the second half alongside planned growth across its entire store estate, which grew 10% in the first half to 69 locations.
The firm added that the rise of delivery aggregators in Poland such as UberEats, Pizza Portal and Pyzszne would be “particularly helpful” in regions where the Domino’s brand was less well known.
Nick Donaldson, DP’s non-executive chairman, said that despite “recent headwinds” in the sector, including food and labour costs, the group was “confident” that it would continue to grow in the market.
What the broker says: Peel Hunt
“We believe that the business is still on track for a positive EBITDA result in 2022,” Peel Hunt said in September.
“With continued store growth, and a key new management hire we believe the business is still on track for EBITDA and cash flow breakeven in FY22E and we reiterate our Buy rating and 15p target price.”
- Iwona Olbrys appointed as general manager in Poland
- Polish economy remains strong
- Discussions with sub-franchisees ongoing over new stores to expand estate in the second half of 2019