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I've held since 2015. Earnings and dividend estimates seem to show the dividend payout ratio rising into the low 20 percents. Over the long term, growth will slow but we'll see a greater dividend payout ratio and a higher proportion of returns through dividends IMHO. However, there's still a good way to grow yet.
I agree. I would assume that the comments mean the mature stores are now significantly in excess of �80,000 EBITDA, which means that if I seek to value the company in the distant future on the basis of hundreds of mature stores then the potential is significantly greater. I'd encourage everyone here to view the full presentation which is on BRR media under DPP. I was interested in the slide which showed just how much of the store estate is immature, and the upside as those stores grow. The comments about potentially having access to a bank credit facility in 2019 once DP Polska is cash positive was interesting. It was also the case that some store fit out costs (i.e. acquiring equipment) for 2018 were actually incurred in 2017, in advance of the stores opening. That, plus the big one of expense of the commissary, added to 2017 cash burn and I wish they'd broken it out in more detail as those won't repeat in 2018.
I'm fine with that Dave, it will hopefully give me chance to buy more and keep topping up at lower prices. I plan to top up in April, so my worry was the results for 2017 would be better than expected and result in the share price rising. For me, the most encouraging part was that the oldest mature stores are outperforming the original business case.
Oh no, DPP rising - again! I topped up in the low 30s but wanted it to stay there until I had the cash to top up further in April. Annoying! Then again, my average is far below even the current price.
Oh no, DPP rising - again! I topped up in the low 30s but wanted it to stay there until I had the cash to top up further in April. Annoying! Then again, my average is far below even the current price.
>>I hope not. << Ditto, Hugo36! And not even in five years' time IMHO. :-)
I'd rather they slowed down the rate of expansion as needed. We want profitable expansion and, so far as possible, a maintenance of high margins.
I'd say that they are shortsighted rather than insane. Personally, I wish the results were due out later because I want the share price to remain at this level or lower until I have a chance to top up again!
Sometime I will put together a spreadsheet showing all the stores in the existing estate which will be past break even point but not yet earning the full cashflows that a mature store would be generating. There are many current stores which were opened up in 2016 and 2017 which will give a significant boost to revenues in 2018, 2019 and 2020 as their revenues gain. I agree on the issue of franchisees and hopefully the national rollout gathering pace, plus the momentum from advertising, will help get more of them onboard. :-) Yes, I hold DOM (a much smaller holding than my DPP) but I haven't studied DPEU in enough detail to have an informed opinion. I like the Domino's Pizza business model so the issue is really the markets DPEU is in.
Sometime I will put together a spreadsheet showing all the stores in the existing estate which will be past break even point but not yet earning the full cashflows that a mature store would be generating. There are many current stores which were opened up in 2016 and 2017 which will give a significant boost to revenues in 2018, 2019 and 2020 as their revenues gain. I agree on the issue of franchisees and hopefully the national rollout gathering pace, plus the momentum from advertising, will help get more of them onboard. :-) Yes, I hold DOM (a much smaller holding than my DPP) but I haven't studied DPEU in enough detail to have an informed opinion. I like the Domino's Pizza business model so the issue is really the markets DPEU is in.
Sometime I will put together a spreadsheet showing all the stores in the existing estate which will be past break even point but not yet earning the full cashflows that a mature store would be generating. There are many current stores which were opened up in 2016 and 2017 which will give a significant boost to revenues in 2018, 2019 and 2020 as their revenues gain. I agree on the issue of franchisees and hopefully the national rollout gathering pace, plus the momentum from advertising, will help get more of them onboard. :-) Yes, I hold DOM (a much smaller holding than my DPP) but I haven't studied DPEU in enough detail to have an informed opinion. I like the Domino's Pizza business model so the issue is really the markets DPEU is in.
I forgot to mention it, but what was the cost of the second commissary? That came online in 2017 and would have represented a significant cash investment, contributing to cash burn, which won't be repeated again for a while as they now have capacity for up to 150 stores.
I think you nailed it, Theanalyzer. We have a large proportion of the current estate which is still immature and/or loss making. I posted before about the shortening period for new stores to break even, but the reduced drag on earnings simply from existing stores breaking even (and older, profitable stores continuing to grow) will be considerable IMHO. If we start with 55 stores today and assume they open 20 in 2018 then we'll end the year with about a quarter of the store estate (20/75) under 12 months old; another 15 in 2019 would take us to 17% of the estate under 12 months old (15/90); another 15 in 2020 would take us to 14% of the estate under 12 months old; and so it continues that, even if they open 15-20 stores a year, the 'drag' of new loss making stores will continually be falling. On current forecasts for a group level EBITDA loss of �0.5 million in 2019, it seems entirely possible to me that the group as a whole will be breaking even by the end of next year (the full year loss would likely reflect heavier losses earlier in 2019). It has taken time to build a business but they're getting closer...
I'm certainly happy with it, even if it did represent an 'averaging up' for me. I went a bit mad when it was in the mid teens. :-) They say investing should be for a minimum five years - I think longer! - so roll on 2023. I'd predict well over one hundred stores, a company generating growing cashflows and a substantially more valuable entity than it is today.
I added today, ijr1. I got 34.1p.
I make it a 3.8 percent forward dividend yield nimrod22, if we take the 147p I saw estimated for 2019 and apply it to a 3835p share price. Not a bad entry point IMHO! I hold a big proportion of my portfolio in ULVR since buying on weakness in 2013.
Thanks for the update, Witcher. You've been to a lot of stores and it's nice to hear the feedback from your own experiences on the ground! I visited one of the Warsaw stores in 2012 and the pizza was yummy, but it wasn't particularly busy at that time. I think it had only been open a few months and the chain hadn't even covered all of Warsaw.
As I understand it, the 55th was opened after the year end? I'm counting it in the 2018 store openings, which will hopefully be among those breaking even after 10-12 months and into 2019. Cheers. I'm looking forward to the balance sheet and other data for the full year results!
According to an article on ProactiveInvestors: On average, it takes between 10-12 months for a new store to break even, so out of 54 stores there is a very high immature proportion [me:35%], Shaw said. �As we grow, we will still open new stores but those already opened will need less promotion. Right now, it is about getting sales in and customers onto the database so we can build the business ready for when we can deliver serious EBITDA [underlying profit].� My understanding was that, barring some sub-franchisee stores which broke even very quickly in Warsaw in 2013-14, new stores were previously expected to break even in 18 months and be fully mature in 36 months. It seems this time period is shortening, which is good news. It also implies that the 19 stores opened in 2017 will all be breaking even by the end of this year, getting rid of a large drag on group EBITDA and then fuelling it from 2019. Of course there'll be many new stores opened in 2018 and 2019, too, but it all continues to move in the right direction.
Held DOM since 2010 at an adjusted book cost of 116p a share (accounting for the share split in 2016). Up 201% in capital terms plus loads of dividends on top and a dividend yield on cost climbing steadily. Quite happy. The time will come when growth is harder to come by, but I think it has plenty of potential yet to come. And, when that day comes, it can shower us with dividends instead.