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Drop today?
DPEU seems to bounce around quite a bit.
Is there anybody out there who could advise whether it worth range trading DPEU?
Can anyone help me understand what this all means further than Wellington taking a large holding in DPEU?
Yes, you are not alone.
I took a small punt on this few years ago. It is part of my "companies operating in emerging markets"
It has the potential to do well.
New to DPEU, after hearing good things ahead.
Anyone here?
Hi @electra will we get to know the price Jubilant foods paid for their holding?
Jubilant foods the Indian dominos franchisee with about 1300 restaurants has bought 32%.
Well worth going on to their website. Stellar price performance from their share.
Another strong day here with good volume. What's going on?
This share tends to move in tandem with Turkish Lira's FX rate which has been very strong since beginning of 2021. I also took a position in this one, hoping the upward trend continues!
Anyone any views on this. I bought some the other day based on that other website!
It looks as if could move
Hawfinch
Did you ever look?
It must be something else. Sales figures were good, even if profitability is not that great to say the least.
Whats with the jump up today, vaccine bounce?
Huge selling yesterday,,is this Over Bought,,,, Does someone know anything,,
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Share Price Information for Dp Eurasia (DPEU)
London Stock Exchange
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Share Price:
41.00
Bid:
41.10
Ask:
41.90
Change:
1.00 (2.50%)
Spread: 0.80 (1.95%)Open: 41.00High: 41.00Low: 41.00Yest. Close: 40.00
DPEU Live PriceLast checked at 11:06:45
Trading Update
Wed, 3rd Jun 2020 07:00
RNS Number : 7341O
DP Eurasia N.V
03 June 2020
For Immediate Release
3 June 2020
DP Eurasia N.V.
("DP Eurasia" or the "Company", and together with its subsidiaries, the "Group")
Trading Update
DP Eurasia (DPEU.L), the master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia, today provides an update on its operations with respect to developments that have taken place since its trading update of 22 April 2020, and its liquidity.
Operations
In both of its core markets, the Group continues to operate under government mandated operational constraints due to COVID-19 and remains focused upon ensuring the safety of its staff and customers. As a result of these operational constraints, dine-in service has been unavailable in both countries and take-away has been greatly reduced, especially in Russia. Delivery system sales have increased by 19% in Turkey and have remained flat in Russia during the post-COVID period (16 March - 31 May 2020) compared to the same period last year.
In Turkey, the Group has been able to operate a consistent delivery service even during weekend and long-weekend curfews, which have continued to be in effect. The number of cities under curfew, which started with 31 cities, has been decreasing over the last few weekends except for the 23-26 May long weekend of Eid holiday, when the entire country was placed under curfew. Take-away service has also been available with the exception of curfew periods. Excluding ten stores located in shopping malls, all Turkish stores are currently operational, and the government lifted the dine-in restriction in restaurants as at 1 June 2020.
As Lock down Opens,,pre tax profits will boom,, Russia is Next to relax Lock down,
Nice blue day again :)
Turkey business doing ok, hopefully Russia starts to open up soon.
Near 52 week low, business is in a decent position to recover from COVID19. Turkey
Given what's happening in Turkey and Russia.
Will buy back later on when this has dropped further
Which doesn't look good for this in the short term.
Probably expect 29p in coming says if the lira collapses further
Hi luckyinvest. Congrats on making your first post! I am also new to this but I find it's interesting to brainstorm and I find there is nothing like putting your thoughts down on paper to help formulate an investment decision. You raise some very salient points.
1. Re. inflation. No doubt a major concern as is the whole macroeconomic situation. They do say in their results (and underlined on the earnings call) that "we are offsetting the impact of higher inflation by increasing our prices more frequently without any discernible negative impact on volumes". And in order to try and preserve margins they are closely managing costs. Latter are no doubt rising in price too but it's important that their ingredients are locally sourced so there is no additional FX risk. Given pizza is a relatively accessible product, they have 50%+ market share, strong execution, etc, the key point is that whilst the crisis undoubtedly brings short term headwinds they actually have the chance to gain market share at the expense of their weaker competitors
2. Russia. I think the crucial point here is that when entering new markets the key objective is to win market share and develop a strong customer relationship. If you can get new customers to try you once and they like the product the hope is that they come back again and again. This is a common fast food strategy (and not just fast food) worldwide. If you look at other Domino's markets there is a loss making period for every store, which is factored into the business plan, which includes extreme promotions to drive footfall.
I strongly disagree that DPEU is a value trap. If the picture were as bleak as you portray there wouldn't be a single western fast food brand in any emerging market. Why is McDonalds in 119 countries and not just in developed nations? Because they have a strong brand, super slick execution, pricing power in times of economic turbulence, etc, etc. And EM brings the attraction of a growing middle class (on a mid to long term view) who still look at going to Mcdonalds or Dominos as aspirational. Then again I am for the most part an ultra long term investor and not a trader. Also I invest in businesses not share prices. There is a frequent disconnect between price and intrinsic value sometimes in your favour and sometimes not. Frankly I couldn't care less what happens to the DPEU share price in the ST. What matters is that the business continues to expand so that it positions itself as best it can for economic normaliasation as and when it comes. Now you may think that Turkey / Russia are the next Venezuela. I really don't think so. But I don't disagree it's a super risky one. And not a share I would attempt to "trade". But if you have a 5 year time horizon I think this makes for a very interesting entry point. Good luck with your decision!
First ever post. Been following this one. Here are my concerns (and grateful for people's views).
1. While it seems impressive that Turkey posted 10.9% LFL revenue. It's less so in the context of runaway inflation (now estimated at 100% pa) - see CNBC article.
https://www.cnbc.com/2018/08/14/turkey-annual-inflation-rate-is-running-at-an-estimated-101-percent.html
When one account for things on a real instead of nominal basis, the picture isn't rosy.
On the ground in Turkey (I don't know about Russia), the DP stores in central areas are busy (probably foreign tourists given Lira may help). But the DP stores in non-prime locations certainly not as busy.
2. Given Russia is a start-up, they seem to be chasing sales at any cost. See CNBC article (giving away pizzas).
https://www.cnbc.com/2018/09/11/dominos-free-pizza-gimmick-goes-awry-after-too-many-people-get-tattoos.html
The above 2 points show up in decreasing GP% and operating profit%. Competition is high in a poor economic environment. Operating losses have increased.
So while on a store basis, EV/store is cheap, it feels like a a value trap. Particularly on the bottom line with widening losses.
So the fast growth is coming at a cost. But are they really truly as profitable as they are in the West without all these loss-making promotions.
btw, I'm not invested as yet (buy or short).
3. We have confirmation that EUR debt has been fully refi'ed. "no hard currency left in the Group". Rouble loan is nicely aligned with the growing importance of RUB revenue
4. Nice commentary from CEO that costs are being tightly managed and "Historically, the business has been relatively robust in challenging economic conditions and we continue to monitor the situation closely given the uncertain short term outlook. This is my third such experience at the helm of DP Eurasia during a difficult macroeconomic environment in Turkey and on each previous occasion we have come through stronger relative to the competition due to our market leadership position, focus on value and service to the customer and resilient franchise partners."
4. Brokers have updated their target prices to 130p (down from 300p but a significant positive delta from today's SP).
5. On a per store basis of roughly £225K per store DPEU is now by far the cheapest of all the listed Domino's global businesses
So in summary a high risk investment no doubt. But my does the current SP price in a lot of bad news. On a 5 year view and assuming economic / FX normalisation I believe the broker views are deeply conservative and 90p will be seen as as a once in a lifetime entry point. Of course do your own research...
Really not bad all things considered and only strengthens my view that this share is deeply oversold, CAVEAT, for those with a long term perspective! I just say that of course because anything can happen in the short term, particularly in the world of Turkish politics / economics. That aside, some interesting data points:
1. Growth strategy remains intact. 700th store will open in late 2018, with the emphasis on Russia / CIS, which are obviously less impacted by the crisis and will help with diversification
2. Board expects full year EBITDA to be in line with expectations