REG - Domino's Pizza Grp - £11 million investment in DP Poland Plc

Domino's PizzaAnnouncement

27/03/2024 17:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240327:nRSa5763Ia&default-theme=true

RNS Number : 5763I  Domino's Pizza Group PLC  27 March 2024

27 March 2024
 
LEI: 213800Q6ZKHAOV48JL75

This announcement contains Inside Information

 

Domino's Pizza Group Plc

 

£11 million investment in DP Poland Plc to support growth opportunities

Domino's Pizza Group plc ("DPG" or the "Company") is pleased to announce that
it has agreed to invest £11 million in DP Poland plc ("DPP") to support
growth opportunities across DPP's business (the "Investment"). DPP, an AIM
listed company, operates 111 Domino's Pizza stores and restaurants in Poland
and a further five in Croatia.

The Investment will be executed via a primary issuance of ordinary shares by
DPP. The Investment is one component of a broader fund raising to raise
approximately £20.5 million that was announced by DPP today (the
"Fundraise"). The Investment will be executed at a price of 9.92 pence per
share, representing a 23.1% discount to DPP's closing price on 26 March 2024.
Following completion of the Investment, and assuming the full £20.5 million
is raised, the Company will own approximately 12.1% of DPP's issued share
capital. The Investment is conditional on the approval of DPP shareholders and
will be funded out of DPG's free cash flow at completion. Following
completion, DPG will have the right to appoint one representative to the DPP
Board.

The proceeds from the Fundraise will be used to further accelerate DPP's
growth by leveraging its organic sales expansion with store rollouts and
potential acquisition opportunities. The Board of DPP estimates the market
potential of Poland to be approximately 500 Domino's stores by 2030.

Alongside the Investment, the Company has entered into an option agreement to
have the ability to purchase additional ordinary shares at a future date from
Malaccan Holdings Limited up to a maximum total position of 29.99% of DPP's
issued share capital including ordinary shares held by DPG and DPG's concert
parties 1 .

Following DPG's recently announced growth framework, DPG has been working at
pace, and with discipline, to assess select value enhancing opportunities to
build a larger and more cash generative business. The Board has been clear
that any investment in international markets must fall within rigorous and
disciplined guardrails and have the potential to create meaningful long-term
shareholder value.

DPG highlighted investing in international markets underpinned by strong and
profitable growth drivers, such as the Investment, as an opportunity to create
value. The current management of DPG has deep experience, with enhanced
capability both within the team and at the Board level, of operating and
delivering profitable, international growth. DPG's CEO Andrew Rennie has
extensive international experience and a proven track record as CEO of
Domino's Pizza Enterprises (DPE) France and Belgium from 2006 to 2010, and CEO
of DPE's broader European business from 2014 to 2020, which included France,
Germany and the Netherlands. In addition, prior to his appointment at DPG,
Andrew was a non-executive Director of DPP where he played an important role
in appointing DPP's current CEO Nils Gornall, which the Board considers highly
beneficial to DPG.  Andrew continues to hold shares in DPP which were
acquired during his time as a Director of DPP. Nils Gornall is a veteran of
Domino's with nearly 30 years of operating and management experience. Under
Nils's leadership, DPP grew like-for-like System Sales in 2023 by 19.7% in
Poland.

The Investment represents a unique opportunity to re-enter international
markets in a disciplined, capital-light manner, and in partnership with a
high-performing business, operated by an experienced management team. DPP's
markets are high growth, and significantly underpenetrated. Stoffel Thijs 2 ,
who recently joined DPG, will represent the Company on the Board of DPP.
Stoffel has worked within the Domino's systems for 25 years and has a proven
track record in Europe.

 

Andrew Rennie, DPG Chief Executive Officer, said:

"I'm delighted to be partnering with DPP as we continue to execute against our
new growth plan. DPP is a fantastic business with a significant growth
opportunity ahead of it. Whilst the Domino's brand is strong in Poland and
Croatia, both markets are significantly underpenetrated with a unique store
opening and profitability opportunity."

"We have strong guardrails in place as we re-enter international markets, and
our investment in DPP is structured in a capital-light manner, with an initial
investment of £11 million. Stoffel Thijs, who has deep experience operating
in the European markets, will be our Board appointee to help accelerate growth
and drive value for our shareholders. I look forward to working with DPP's
CEO, Nils Gornall, a near 30-year Dominoid, who has done an outstanding job
leading DPP since his arrival almost 2 years ago."

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 and was authorised for release by Adrian Bushnell, Company
Secretary.

 

 

For further information, please contact:

Domino's Pizza Group plc:

Will MacLaren, Head of Investor Relations
07443 192 118

Brunswick:

Tim Danaher, Abbie Sampson

020 7404 5959

 

About Domino's Pizza Group

Domino's Pizza Group plc is the UK's leading pizza brand and a major player in
the Irish market. We hold the master franchise agreement to own, operate and
franchise Domino's stores in the UK and the Republic of Ireland

 1  Concert parties include Andrew Rennie (DPG CEO) who holds 15,442,553 DPP
ordinary shares.

 2  Stoffel Thijs (DPG Board appointee) has a beneficial holding of 6,169,938
DPP ordinary shares.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCPPUQCWUPCGQM