-Like-for-like system sales jump 25% year to date
-Company now operating at critical mass
-Acquisition of Domino’s Croatia
Polish pizza operator DP Poland (DPP:AIM) said like-for-like system sales increased 25% year-on-year in the first five months of 2022 to £14 million.
The company said that although tourism had yet to fully recover to pre-Covid-19 levels and offices were still operating a hybrid remote working model, dine-in saw a huge improvement with like-for-like sales surging 172% to £4.5 million.
By contrast delivery like-for-like sales were only 1% ahead of the prior year, rising 1% to £10 million. The strong bounce-back in trading was warmly received by investors with the shares gaining 21% to 6.4p.
BUILDING SCALE
The company has exclusive rights to develop, operate and sub-franchise Domino’s Pizza stores in Poland. In January 2021 the firm acquired Dominium which almost doubled the number of stores to 121 and created a combined business with critical mass.
After integrating the business and making substantial investments despite Covid-19 disruptions, the combined business is now benefiting from economies of scale.
DP Poland also took the opportunity to take delivery inhouse and has been able to reduce delivery times which it claims has created ‘one of the most compelling delivery services in Poland’.
EXPANDING INTO CROATIA
In a separate announcement the company said it had agreed terms to acquire All About Pizza, trading as Domino’s Croatia for a total consideration of £2.4 million.
The transaction will be satisfied via the issue of 29.8 million shares at a price of 8p per share. All About Pizza owns the rights to operate Domino’s stores in Croatia and has two stores in the capital Zagreb with a third store scheduled to open in June 2022.
Management believe there is potential for up to 50 stores across Croatia which has a population of 4.2 million potential customers. The pizza market has attractive characteristics with sales per store almost double those in Poland.
The company proposed the conditional appointments of Nils Gornall, CEO of All About Pizza and Andrew Rennie, ex-CEO of Domino’s Pizza Enterprises in Europe to the board as chief executive officer and non-executive director respectively.
Non-executive director of DP Poland and managing partner of ACP, the company’s largest shareholder, Przemyslaw Glebocki commented:
‘These appointments bring us the best in class Domino's operational and strategic experience. We remain acquisitive and Andrew's experience in that sphere is very valuable for us.
‘We are also inspired by the achievements of Andrew and Nils, not only in Australian and West European markets but also in Croatia, which is a market with a similar economic profile to Poland.’
