TIDMDPP
RNS Number : 9073M
DP Poland PLC
17 January 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")
Full year unaudited trading update for 2022
DP Poland, the operator of pizza stores and restaurants across
Poland and Croatia, is pleased to announce a trading update for the
full year ended 31 December 2022.
DP Poland's Chief Executive Officer, Nils Gornall, said:
"2022 was another year of transformation for DP Poland, entering
a new territory in Poland, completing the rebrand of all Dominion
stores and strengthening both the Board and the Executive
management team.
Since personally joining the business in June 2022, I have been
consistently impressed with the energy and enthusiasm shown by our
staff and their commitment to making the necessary changes to
maximize the potential of our business.
Average delivery times in H2 2022 were five minutes lower than
in H2 2021, delivering a higher quality experience to our customers
and helping to drive higher customer retention rates. Three stores
also averaged less than 10 minute delivery times over a week,
setting new records for our business.
These efforts have resulted in consecutive record sales weeks
being achieved in 8 weeks in H2 2022. Like for like sales increased
in Poland by 21%, whilst total system sales were up 20%.
In Croatia, operations continue to go from strength to strength,
with total system sales increasing 93% in 2022. This was supported
by 1 store opening through the year and 2 planned in 2023.
However, 2022 has not been without challenges. High inflation
and tight labor markets may persist in 2023 but we are focused on
further optimization projects and expect performance to continue
improving. In January 2023 we are also launching a TV campaign,
which is expected to significantly drive further revenue growth.
"
Strategic highlights
-- Full conversion of all Dominium stores to Domino's branding was completed by the end of 2022
-- Portfolio review completed, with 8 stores closed as part of
our post-merger relocation plan to optimize store locations and
improve profitability
-- The first TV marketing campaign for 5 years is due to launch in mid-January 2023
-- David Wild, ex-CEO of Dominos Pizza Group announced as
proposed Chairman on 30 December 2022. David is expected to be
appointed to the Board in early 2023, subject to customary due
diligence
Financial & operating highlights
-- Cash at bank of GBP4.0 million as at 31 December 2022 (2021:
GBP2.7 million) following a successful fundraising to raise gross
proceeds of GBP4.8 million. The fundraising has enabled investment
in the business including in store development (openings, store
conversions & post-merger adaptations in Poland and Croatia),
funding the TV campaign, working capital optimization (i.e. stock
purchases to protect against inflation), upgrading of the scooter
fleet and IT system enhancements.
Poland
-- Like for like System Sales(1) increased in 2022 by 21.0%
compared to 2021 and up 13.4% in Q4 2022 compared to Q4 2021
-- Total System Sales(2) increased in 2022 by 20.2% compared to
2021 and up 11.8% in Q4 2022 compared to Q4 2021
2022 vs 2021 Q1 Q2 Q3 Q4 FY
------ ------ ------
LFL System Sales 21.8% 25.6% 24.4% 13.4% 21.0%
Total System
Sales 23.2% 23.9% 23.4% 11.8% 20.2%
------------------ ------ ------ ------ ------ ------
-- Dine-in business recovered strongly as COVID-19 restrictions
were lifted in Poland, driving a 55.3% uplift in sales compared to
2021
-- Carry-out business performed strongly, up 85% on 2021,
benefitting from increased focus and a strong customer value
proposition
-- Delivery business increased 5.2% in 2022 compared to 2021,
despite consumers returning to the dine-in business post COVID-19
restrictions lifting
Croatia
The Croatian business was acquired by DP Poland in June
2022.
-- Like for like System Sales(1) increased in 2022 by 8.7%
compared to 2021 and up 20.4% in Q4 2022 compared to Q4 2021
-- Total System Sales(2) increased in 2022 by 92.7% compared to
2021 and up 81.7% in Q4 2022 compared to Q4 2021
2022 Vs 2021 Q1 Q2 Q3 Q4 2022
LFL system sales -10.9% 8.7% 13.4% 20.4% 8.7%
Total system sales 44.2% 93.9% 163.7% 81.7% 92.7%
-------------------- ------- ------ ------- ------ ------
(1) Like-for-like System Sales growth in Polish Z oty and
Croatian Kuna respectively, matching trading periods for the same
stores between 1 January and 31 December 2022 and 1 January and 31
December 2021
(2) System Sales - total retail sales including sales from
corporate and sub-franchised stores, unaudited
Review of 2022 and Outlook for 2023
2022 saw the operational completion of the merger with Dominium,
with all stores rebranded to Domino's by the end of 2022. We
continue to strive for the best customer value proposition to our
consumers whilst delivering a High Volume Mentality across all
stores.
Strong inflation and a tight labor market was a headwind through
the year but despite this, strong sales growth was reported in all
quarters. This trend is expected to be maintained with the support
of a new TV campaign starting on 16(th) January.
Despite inflationary pressures on food costs, energy and
increasing wages across Poland, business profitability stayed on a
positive trend over the last six months and is expected to be close
to market estimates for 2022. The Board will update the market as
soon as the outcome is known. The expected recovery of tourism and
stabilization of inflationary pressures in 2023 should provide a
positive impact on sales and profitability.
The Group expects to continue store openings in 2023 and to
increase its share of sub-franchised business vs corporate
stores.
Trading performance - Poland
PLNm FY2020 FY2021 FY2022 % change vs. 2020 % change vs. 2021
------------------- --------------- --------------- ------------------
Total System sales 157.8 164.9 198.2 25.5% 20.2%
LFL System sales 152.7 158.3 191.4 25.4% 21,0%
Dine-in 21.4 19.6 30.4 42.0% 55.3%
Carry-out 14.0 19.1 35.3 152.3% 84.7%
Delivery 117.5 119.6 125.8 7.1% 5.2%
Non-LFL System sales 5.1 6.6 6.7 31.1% 1.4%
---------------------- ------------------- --------------- --------------- ------------------ ------------------
PLNm 4Q2020 4Q2021 4Q2022 % change vs. 2020 % change vs. 2021
--------------------- --------------- --------------- ------------------
Total System sales 39.8 47.0 52.6 32.0% 11.8%
LFL System sales 38.5 45.2 51.2 32.9% 13.4%
Dine-in 2.1 6.5 7.2 240.9% 9.6%
Carry-out 3.9 5.8 10.7 177.3% 85.7%
Delivery 32.6 32.8 33.3 2.3% 1.5%
Non-LFL System sales 1.3 1.9 1.4 3.5% -27.4%
--------------------- --------------------- --------------- --------------- ------------------ ------------------
The 11,8% Total System Sales growth, and 13.4% Like for Like
growth, in Q4 2022 versus Q4 2021 demonstrate the organic sales
growth potential of the Group, which may be doubled with the
support of TV commercial whose launch is planned for mid-January
2023. Sales growth versus last year has been fueled by a recovery
of the dine-in business, as well as a development of the carry-out
business, which demonstrate stable 80%+ growth rate over the year.
It is notable that delivery sales have been maintained despite the
boost of dine-in, and customers gradually returning to the
restaurants.
At the end of 2022, all Dominium stores had been fully converted
to Domino's branding. Further optimization projects, in particular
focused on accounting and labor costs management, will be completed
in 2023.
The Group has undertaken measures to address the inflationary
cost pressures. For example, raising the minimum order size
eligible for free delivery (in direct delivery sales), reviewing
its promotions scheme based on consumer surveys, menu
simplification and the development of the higher margin carry-out
channel. These mitigation steps have brought positive trends from
the beginning of H2 2022.
The Group expects to announce its final results for the year
ended 31 December 2022 in early June 2023, including a webinar for
investors.
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
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 over 120 stores and restaurants throughout cities
and towns in Poland and Croatia.
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