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(Alliance News) - DP Poland PLC shares surged in London on Wednesday morning as it agreed to buy the Domino's Pizza franchise holder in Croatia and reported an annual revenue rise.
Shares in DP Poland, which holds the franchise in Poland, were 16% higher at 6.10 pence.
DP Poland has agreed to buy All About Pizza DOO, trading as Domino's Croatia, for about GBP2.4 million, through the issue of 29.8 million shares at 8p per share.
All About Pizza signed a franchise agreement with Domino's Pizza International Franchising Inc in July 2019 to operate Domino's stores in Croatia and now operates two stores in Zagreb, with a third fully prefinanced and scheduled to open in June 2022.
As part of the deal, Domino's Croatia Chief Executive Nils Gornall has been appointed CEO of all of DP Poland. The firm noted he is a "veteran" of Domino's Pizza, with 28 years of operational experience. DP Poland
Piotr Dzierzek, current CEO of DP Poland, will remain as the deputy chief executive of DP Polska SA and Dominium SA, the operating entities in Poland.
DP Poland also will add Andrew Rennie, the former CEO of Domino's Pizza Enterprises in Europe, to its board as a non-executive director.
For 2021, All About Pizza generated revenue of EUR951,000. DP Poland sees a market for about 50 stores in Croatia.
"The company has been transformed and is growing at a high pace, but we have an ambition for more," DP Poland Non-Executive Director Przemyslaw Glebocki said. "We are excited seeing their store performance, and we look forward to having that replicated into our stores."
Turning to DP Poland's results, it recorded a pretax loss of GBP4.3 million in 2021, widened from GBP3.0 million in 2020 for Dominium only. However, the loss was narrowed from a pro-forma GBP8.8 million loss for the whole current group in 2020. The current DP Poland group is the result of a reverse takeover of Dominium at the start of last year.
System sales increased to GBP31.2 million from pro-form GBP29.8 million, with revenue edging up 3.1% to GBP29.9 million from GBP29.0 million.
Store pre-opening expenses increased to GBP3.4 million from GBP323,000.
It ended 2021 with 121 stores.
"2021 was a transformational year for DP Poland, having completed the acquisition of Dominium SA in January 2021. This is the first DP Poland Annual Report to be published after twelve months have passed since the businesses came together," Outgoing Chair Nicholas Donaldson said.
"Your board believes the acquisition of Dominium has delivered a level of critical mass which makes the company a key player in the Polish Food & Beverage sector. At the end of 2021, the group operated 121 stores across Poland, providing an opportunity to leverage economies of scale in operations, procurement and marketing. I am truly excited about the future for DP Poland - we see a long and exciting roadmap ahead, driven by both organic and other opportunities."
For the five months to May 31, 2022, like for like system sales improved to PLN78.2 million, about GBP14.5 million, from PLN62.5 million. Like for like delivery sales were up to PLN54.2 million from PLN53.7 million, while dine-in sales surged to PLN23.9 million from PLN8.8 million.
By Paul McGowan; paulmcgowan@alliancenews.com
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