REG - DP Poland PLC - Full year unaudited trading update for 2020

DP PolandAnnouncement

31/03/2021 07:00

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RNS Number : 0317U  DP Poland PLC  31 March 2021

 

31 March 2021

 

DP Poland PLC

("DP Poland" or the "Group")

 

Full year unaudited trading update for 2020

and

Update on the progress of integration with Dominium S.A.

 

DP Poland, the operator of pizza stores and restaurants across Poland,
announces a trading update for the year ended 31 December 2020 and an update
on the progress of integration following completion of the acquisition of
Dominium S.A. ("Dominium") (the "Acquisition") on 8 January 2021.

Trading Update

DP Poland's trading performance is in line with management expectations for
the year ended 31 December 2020:

·    53 corporate stores and 16 sub-franchised stores in operation

·    System Sales(1) up 7% to PLN 87.1m (2019: PLN 81.4m)

o  approximately 4.6% like-for-like(2) growth in System Sales

·    85% of delivery sales ordered online (2019: 82%)

·    Cash at bank of £1.2m as at 31 December 2020 (pre-fundraise; £3.9m
as at 31 December 2019)

Trading performance for the Group and pro forma consolidated results for the
year ended 31 December 2020 (which include the unaudited results of Dominium
for the year ended 31 December 2020 for illustrative purposes):

               DP Poland      Pro forma consolidated

               (standalone)   (incl. Dominium)
 System Sales  PLN 87.1m      PLN 158.2m
 Revenues      PLN 74.8m      PLN 144.7m

 

·    As of 31 December 2020, prior to the Acquisition completing, DP
Poland and Dominium (together the "Enlarged Group") operated a combined 125
stores, including 107 corporate stores and 18 sub-franchised stores

·    The Enlarged Group's business is currently skewed towards delivery
sales, which generated 75% of System Sales in 2020. Management believe this
provides a stable basis should  restrictions linked to the COVID-19 pandemic
continue throughout 2021, linked with an opportunity to recover some of the
lost dine-in sales once the restrictions are lifted

·    -1.1% like-for-like decline in System Sales, comprising:

o  a significant like-for-like growth in delivery sales (+16.6%)

o  a significant like-for-like decline in dine-in sales (-32.6%). Dine-in
sales have been negatively impacted by the COVID-19 pandemic and the resulting
lockdowns and operational restrictions imposed in Poland

Integration of Dominium

Since the completion of the Acquisition, the Enlarged Group has been
implementing a comprehensive integration programme, as outlined in the
admission document published on 21 December 2020 which is progressing well.
The key milestones achieved during Q1 2021 include:

·    Completed the buy-back of 5 sub-franchisee stores, to optimise the
Group's store footprint and operational efficiency;

·    A new organisation structure, integrating the teams of DP Poland and
Dominium, has been implemented;

·    Where required, equipment at Dominium locations has been upgraded to
meet the requirements of the Domino's Pizza Master Franchise Agreement;

·    Staff training and revised operating manuals have both been
completed;

·    The key suppliers for the Enlarged Group going forward have been
selected and approved;

·    The DP Poland commissaries and supply chain have been reorganised and
upgraded, where required, to accommodate supplies to all of the Enlarged
Group's stores; and

·    The DP Poland e-commerce platform has been upgraded and successfully
launched for the DP Poland stores. The new e-commerce platform will handle all
online orders for the Enlarged Group once fully integrated.

The final stages of the integration plan, which are currently in progress and
are expected to conclude during Q2 2021, will involve:

·    Integrating the IT systems of Dominium locations to the DP Poland
platform;

·    Converting the Dominium franchise so that Dominium locations operate
under the "Dominium by Domino's" brand, with these locations also migrating to
the DP Poland e-commerce platform; and

·    Implementing new delivery areas, taking into consideration the denser
network of stores.

The Board is hopeful that the government-imposed restrictions in response to
the COVID-19 pandemic will be lifted during Q2 2021, with at least partial
re-opening of restaurants for dine-in sales. The gradual recovery of dine-in
sales is expected to improve the Enlarged Group's performance throughout 2021.

 

On the occasion of announcement of full-year results for the year ended 31
December 2020, which is expected as soon as possible in Q2 2021, the Board
plans to organise a webinar for investors, presenting an overview of the
conversion process, expected to be completed by that date, as well as the
run-rate performance of the Enlarged Group.

 

Commenting on the integration of DP Poland and Dominium, DP Poland's Chief
Executive Officer, Piotr Dzierżek, said:

"I'm very proud of the combined team of DP Poland and Dominium, and the pace
of integration work that my fellow colleagues have progressed since January,
despite the COVID-19 headwinds. We look to the future with optimism: we expect
that fully integrating our IT infrastructure and systems will make the
Enlarged Group more resilient to the ongoing impact of COVID-19, and we
believe that we will be able to demonstrate the full potential of our combined
business once dine-in services are allowed to resume in Poland".

(1)System Sales - total retail sales including sales from corporate and
sub-franchised stores, unaudited

(2)Like-for-like System Sales growth in PLN, matching trading periods for the
same stores between 1 January and 31 December 2019 and 1 January and 31
December 2020

 

The information contained within this announcement is deemed to constitute
inside information for the purposes of article 7 of the market abuse
regulation (EU) no. 596/2014.

The person responsible for arranging the release of this announcement on
behalf of the Company is Nick Donaldson, Non-Executive Chairman.

 

 Enquiries:

 DP Poland plc                                                Tel: +44 (0) 20 3393 6954
 Nick Donaldson, Non-Executive Chairman

 N+1 Singer (Nominated Adviser and Broker)                    Tel: +44 (0) 20 7496 3000
 Shaun Dobson / Will Goode / George Tzimas / Amanda Gray

 

 

Notes for editors

About DP Poland plc

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. Following its acquisition of Dominium S.A., which constituted a
reverse takeover under the AIM Rules for Companies, the group now operates
over 100 stores and restaurants across a number of cities and towns in Poland.

 

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