REG - DP Poland PLC - Trading Update

DP PolandAnnouncement

21/07/2023 07:00

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RNS Number : 7042G  DP Poland PLC  21 July 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")

 

Q2 & H1 2023 Trading Update

 

 

DP Poland, the operator of pizza stores and restaurants across Poland and
Croatia, announces a trading update for first half of 2023.

 

DP Poland's Chief Executive Officer, Nils Gornall, said:

 

"I'm delighted to announce record sales in the first half of 2023.
Like-for-like sales in Poland increased 18% compared with the prior year,
supported by order count growth of 11.3%.

 

We have continued to execute on our strategy of building a High Volume
Mentality business, delivering a compelling value proposition for our
customers based on fantastic quality pizza delivered quickly. These efforts
have resulted in an improvement in customer satisfaction ratings and increased
consumer loyalty which place the business in a strong position to capitalise
on the strong potential we see in both Poland and Croatia.

 

At the same time we improved our footprint by the opening of one store and
full refurbishment of four stores in Poland as well as opening our fourth
store in Croatia. We expect to open another two stores in Poland and one in
Croatia by the end of this year.

 

High inflation in energy and food have eventually started to abate in May, and
whilst  labour rates are still under inflationary pressures we are constantly
focusing on further optimization projects. We expect performance to continue
improving and remain optimistic about the outlook for the Group."

 

Highlights

·   LFL System Sales(1) in Poland increased by 16.8% in Q2 2023 compared to
Q2 2022, driven by a strong increase in order counts

 

·   Inflationary pressures in food and energy have begun to recede, though
remain in labour markets

 

·   Two store openings (in each of Poland and Croatia) in H1 2023 and three
planned for H2

 

·   Four store refurbishments completed in H1 2023

 

·   Investment in an updated scooter fleet and IT system enhancements

 

·   Cash at bank of £2.5 million as at 30(th) June 2023 (31(st) December
2022: £4.1 million)

 

 

 

Trading Update H1 2023

 

Poland

                        Q1 2023             Q2 2023             H1 2023
                        PLNm  % YoY change  PLNm  % YoY change  PLNm   % YoY change
 Total System sales(1)  53.1  15.4%         55.0  14.4%         108.1  14.9%

 LFL System sales(2)    52.2  19.4%         53.7  16.8%         105.8  18.0%
 non-delivery           16.9  47.7%         18.8  6.3%          35.7   22.6%
 delivery               35.3  9.3%          34.8  23.3%         70.1   15.8%

( )

                         H1 2023
                         Million Units  % YoY change
 Total System orders(1)  1.85           7.7%
 LFL System orders(2)    1.81           11.3%

( )

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

 

(2   )Like-for-like System Sales growth in Polish Złoty, matching trading
periods for the same stores

 

Current trading remains strong, with double digit sales growth underpinned by
higher order counts. System Sales increased by 14.9% in H1 2023 vs. H1 2022,
with the growth split between sales channels. LFL Sales in H1 2023 were up by
18.0% vs 2022.

 

Inflationary costs have begun to diminish in food and energy, however, labour
inflationary pressures have remained.

 

In the first half of 2023, one new store was opened in the Polish market and a
contract signed for an additional store opening to take place in Q3. A third
store opening is planned for Q4 2023.  At the same time, four ex-Dominium
stores have been fully upgraded to Domino's standards and two stores were
closed as part of the store network optimisation plan with a future relocation
planned.

 

Croatia

 

                     Q1 2023             Q2 2023             H1 2023
                     EURm  % YoY change  EURm  % YoY change  EURm  % YoY change
 Total System sales  0.49  52.9%         0.55  37.7%         1.04  44.5%
 LFL System sales    0.37  15.7%         0.40  5.5%          0.78  10.2%

 

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

(2   )Like-for-like System Sales growth in Euro, matching trading periods
for the same stores between 1 January and 30 June 2022 and 1 January and 30
June 2023

(3) Difference between Total System Sales growth and LFL system sales growth
driven by 3(rd) store opening in June 2022

 

The transition of the Croatian currency from the Kuna to the Euro at the
beginning of 2023 contributed to weaker sales in January, whilst also being
impacted by inflation. However, since February, Croatia has seen strong double
digit LFL Sales growth, excluding a temporary drop in June resulting from two
long public holiday weekends.

 

H1 2023 System Sales increased by 44.5% vs. H1 2022, benefitting from the
third store opening in June 2022.  LFL Sales also increased strongly, up
10.2% against the prior period.

 

At the start of 2023, the Croatian business began utilising the benefits of
group purchasing, which should meaningfully reduce direct costs.

 

A fourth store opened in Croatia at the end of June and has reported strong
sales since launch. A fifth store is planned to be opened at the end of Q3.

 

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 / Jen Boorer

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 117 stores and
restaurants throughout cities and towns in Poland and Croatia.

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