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BIGGER & BETTER NOW THAN WHEN WE HAD OUR CAPITAL RAISING AT 8p / SHARE 2 YEARS AGO.
3 November 2021
DP Poland plc
("DP Poland" or "the Company")
Result of Fundraising
Further to the announcement yesterday ("Launch Announcement") and the close of bookbuild announcement this morning, DP Poland is pleased to announce the completion of a Placing of 34,320,956 New Shares and a Subscription of 3,179,044 New Shares with investors, at a price of 8 pence (the "Issue Price") raising a total of £3 million before expenses.
** accelerate ** Doh!
It's not the store roll-out that's the real problem. It's the lack of franchisees that's really been holding DPP back. Unlike DPUK, most of DPP's stores are corporate (c93% at 31 December 2022) and this has hampered its growth. There isn't a franchise culture in Poland and, outside of Warsaw, I don't believe DPP has any sub-franchised stores. However, DPP has now got to a size where rolling out half a dozen new corporate stores each year should be sustainable from its existing resources. I think the addressable market in Poland is probably c250-300 stores and, ideally, DPP should be looking to try and sub-franchise half its existing corporate stores over the next few years so that it can excelerate its growth.
Hi everyone, looking at the latest rns things are progressing albeit at a mediocre pace, in that I mean although the percentage increases sound impressive over the last few years there have been a massive store roll out imo, that has digressed the profit into reinvestment. Although there is nothing wrong with this it’s hard to draw any real share rises because of this. In time this will reward us shareholders, but not for a few more years I think. With a huge share dilution last year to bolster up the reserves I would like to see dpp halt the store rollouts take a breather for say a year and then evaluate then if viable carry on. I like Poland but there is a awful lot of choice in the take away market, from what I have seen pizza is a popular thing but local pizza businesses are not as good as domino’s because of the better quality ingredients that are used. I hope in time things will finally achieve what is needed here, but until then I will add shares where I can looking at a 3/5 year plan. I think 15p is not unrealistic by the end of 2024. Again these are my own thoughts so good luck to you all. Regards H.
Nils Gornall, CEO, and Edward Kacyrz, CFO, will host a webinar for private investors to present the HY23 results which will be released on 26 September.
Webinar is at 12.30pm on Tuesday 3rd October
Register:
https://us02web.zoom.us/webinar/register/7016941620673/WN_SS4n9xGEQ7iuPilcbVZJjg
Interims on the 27th Sept. Raised a lot of cash for growth at 8p last year. Great progress in updates since. I think we are undervalued at 7p
You're getting ahead of yourselves. DPP is currently valued at c£56m. Those fund raisings came with a lot of dilution; it had a lot fewer shares in issue when it was valued at 50pps.
DPP's made c£21-£22m of sales in H1 and a good chunk of that LfL sales increase is down to inflation. The current inflation rate in Poland is c12.5% and was higher earlier in H1. Inflation-adjusted, the LFL sales increase is a lot more modest c5-7%. Also, the cash at bank is 40% less than at 31 December.
Any sales increase is to be applauded but Poland is (definitely) not like the UK market. It's population is c45% less than the UK's and the scope for DPP expansion outside the larger cities is a lot less than in the UK. Also, here in the UK, most of DP's sales are generated from delivery/collection (meaning smaller outlets and lower operating costs) whereas in Poland close to a third of DPP's sales, and the fastest growing side of the business, are generated from eat-in (meaning larger outlets and higher operating costs). DPP is not, unfortunately, another mini-DP. It's an entirely different beast and its scope for growth is, I suspect, more limited. Unlike the UK, it's growth is not going to be driven by a rapid franchise expansion.
Monty. Agree, seems very focussed.
One area they could easily make would be for a translation into £, always have to look up exchange rates etc.
Continue to grow top and bottom line, was 50p when it was smaller. Overs tuned capital raising at 8p way back. Very undervalued. Not sure when investors will catch up with this but should be due for a re-rating any day now.
It was all hyped up when Mr Moor jumped ship from running uk branch.30 odd p then .it will never amount to anything
Fair value circa 20p, previous highs of 50p. Now in 2 countries and adding outlets. Re-rating after next results likely. Sooo under the radar at the moment, won’t be forever. Looks like a strong buy at 10p
I think you’ll double your money inside 24 months. It is indeed ripe for growth, we can see a few buyers starting to notice and come in now. It’s the sort of share that will rise very quickly once it’s noticed.
Croatia and Poland have a combined population of c41.65m (c74% the size of England's c56m). Population-wise, Croatia has only added c3.9m people (albeit that toursists will add to that number in the summer); so I'd question the assertion that DPP is "... a much bigger org now ...". Also, apart from perhaps head office and back office costs, I'm not sure that the combination provides for many, if any, opportunities for economies of scale - the two countries don't share a border, are about 1,000km apart and don't share a common first language. On paper, there seems to still remain significant scope to expand the number of stores in Poland but it remains to be seen whether Poland (and Croatia) can ever achieve the type of store density (stores per head of population) that Domino's has in the UK (culture and disposable incomes will play a large part). A generation (25-30 years) is, frankly, a long time to wait ;-)
DPP needs to grow its franchise operation in Poland (the key to Domino's past astronomical growth in the UK) and, to date, franchise growth is Poland has been pretty anaemic (too often it's required DPP to initially open fully-owned stores before passing them into the hands of franchisees at a later date - this incurs a lot more upfont cost and slows growth). The lack of franchisee interest to date might be down to several possible factors; the "take-away" culture in Poland is still "embryonic", food preferences in Poland (pizza may not be as popular as some other countries), lack of individuals with capital to invest, population density (Poland is 2.4x larger than England but only has c74% of the population), the degree of urbanisation (only c60% of Poland's population live in urban areas, as opposed to c84% in England).
Domino's has c1,200 stores in the UK currently (about one store for every 56,000 people). Poland has c13.7m people living in towns and cities with populations over 50,000. On that basis, the maximum number of stores DPP is likely to ever have in Poland is going to be c250 +/- 50. At the interims in September, DPP already operated "over" 120 stores in Croatia and Poland, which suggests that, realistically, it may only be possible to expand the number of stores to 2x-3x before the two markets reach full saturation. Personally, I'd like to see continued, strong double digit growth in LFL sales in their existing stores; there still appears to be significant scope to grow their carry-out and delivery businesses. In turn, the stronger their existing business becomes, the easier it will become to attract new franchisees.
I'm a long-term holder and have become a realist about DPP's growth prospects. It's nice to see a rise in the share price but I'm not going to get carried away by any hype. Provided DPP can continue to meaningfully increase the utilisation of its existing stores in the next 12 months then a share price of 16p doesn't appear to be totally beyond the realms of possibility but it won't be easy.
I hope you are right. I've been in a long while. Forecasts show £6.2 million in EBITDA for 2023 and still £1.3 million in EBIT. As time progresses, we need that growing EBITDA to translate into free cash flow and capacity for reinvestment in the business without them keeping issuing more and more shares. Current market cap is £58 million or so, which is 9.4 x 2023 EBITDA. looks very cheap provided they make progress. If they get to a store estate with hundreds of stores in Poland and Croatia (Poland is growing so strongly, frankly the average person may be as rich or richer than the UK in a generation) then why not a market cap in the hundreds of millions, too?
We are a much bigger org now across 2 high growth countries with the food prep commissions and acquisitions all converted to Dominos. We have £4M in cash to continue the role out and all the World Cup uplifts and new ad campaigns uplifts still to come. We should be on the way back to past years highs of 36p again soon. Looking forward to the next trading updates and results (Sooo under the radar right now, good to get in before the crowds find it and tip it (IC, Daily Mail etc etc).
Nice to be in, looked at it and thought why not. Seems under the radar with two countries with massive potential.
Yes it`s a strange one. Completely off radar. My biggest holding and I`m happy to wait for a decent rise one day, hopefully this year ??
This is unloved and unearthed currently but doing all the right things. Very surprised it’s not gone around 10% today per this trading update. Year end results should be positively received.
712 million shares in issue, what are you about?
Not illiquid at at all, under the radar, not trading much, keeping a low profile “yes” illiquid “no”
I question whether a stick that is this illiquid should be listed.
Maybe the World Cup will help this share as good results don’t make any difference lol.
Really strong numbers and the momentum gets better quarter by quarter. This is how Dominos UK got going, very similar pattern. We we way smaller at 50p per share and the capital raising at 8p per share a few months back is paying off now. We must be fair value at 9 to 10p now and rising moving forwards. This is still very under the radar but will be spotted soon and there will be some good uplifts to the SP to follow IMHO.
Getting ready to pop. Next results
Long may this rise continue at least hold this time!
Dominion plus Domino Poland & Croatia all in the portfolio plus excellent BOD adds all bodes well for a size up like Domino UK.“DP Poland, the operator of Domino's pizza stores and restaurants across Poland, is pleased to announce that, further to the completion of the Acquisition of All About Pizza d.o.o, trading as Domino's Croatia, the appointments of Nils Gornall and Andrew Rennie as Chief Executive Officer and Non-Executive Director respectively, will be effective immediately. In addition, Piotr Dzierzek remains as the Deputy Chief Executive Officer of DP Polska S.A. and Dominium S.A., the operating entities in Poland, but will step down from the Board as a Director of the Company with immediate effect”