Last checked at 21 Jul 2023 07:00
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")
Q2 & H1 2023 Trading Update
DP Poland, the operator of pizza stores and restaurants across Poland and Croatia, announces a trading update for first half of 2023.
DP Poland's Chief Executive Officer, Nils Gornall, said:
"I'm delighted to announce record sales in the first half of 2023. Like-for-like sales in Poland increased 18% compared with the prior year, supported by order count growth of 11.3%.
We have continued to execute on our strategy of building a High Volume Mentality business, delivering a compelling value proposition for our customers based on fantastic quality pizza delivered quickly. These efforts have resulted in an improvement in customer satisfaction ratings and increased consumer loyalty which place the business in a strong position to capitalise on the strong potential we see in both Poland and Croatia.
At the same time we improved our footprint by the opening of one store and full refurbishment of four stores in Poland as well as opening our fourth store in Croatia. We expect to open another two stores in Poland and one in Croatia by the end of this year.
High inflation in energy and food have eventually started to abate in May, and whilst labour rates are still under inflationary pressures we are constantly focusing on further optimization projects. We expect performance to continue improving and remain optimistic about the outlook for the Group."
Highlights
· LFL System Sales1 in Poland increased by 16.8% in Q2 2023 compared to Q2 2022, driven by a strong increase in order counts
· Inflationary pressures in food and energy have begun to recede, though remain in labour markets
· Two store openings (in each of Poland and Croatia) in H1 2023 and three planned for H2
· Four store refurbishments completed in H1 2023
· Investment in an updated scooter fleet and IT system enhancements
· Cash at bank of £2.5 million as at 30th June 2023 (31st December 2022: £4.1 million)
Trading Update H1 2023
Poland
| Q1 2023 | Q2 2023 | H1 2023 | |||
| PLNm | % YoY change | PLNm | % YoY change | PLNm | % YoY change |
Total System sales1 | 53.1 | 15.4% | 55.0 | 14.4% | 108.1 | 14.9% |
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LFL System sales2 | 52.2 | 19.4% | 53.7 | 16.8% | 105.8 | 18.0% |
non-delivery | 16.9 | 47.7% | 18.8 | 6.3% | 35.7 | 22.6% |
delivery | 35.3 | 9.3% | 34.8 | 23.3% | 70.1 | 15.8% |
| H1 2023 | |
| Million Units | % YoY change |
Total System orders1 | 1.85 | 7.7% |
LFL System orders2 | 1.81 | 11.3% |
1 System Sales and System orders - total retail sales or orders including sales or orders from corporate and sub-franchised stores, unaudited
2 Like-for-like System Sales growth in Polish Złoty, matching trading periods for the same stores
Current trading remains strong, with double digit sales growth underpinned by higher order counts. System Sales increased by 14.9% in H1 2023 vs. H1 2022, with the growth split between sales channels. LFL Sales in H1 2023 were up by 18.0% vs 2022.
Inflationary costs have begun to diminish in food and energy, however, labour inflationary pressures have remained.
In the first half of 2023, one new store was opened in the Polish market and a contract signed for an additional store opening to take place in Q3. A third store opening is planned for Q4 2023. At the same time, four ex-Dominium stores have been fully upgraded to Domino's standards and two stores were closed as part of the store network optimisation plan with a future relocation planned.
Croatia
| Q1 2023 | Q2 2023 | H1 2023 | |||
| EURm | % YoY change | EURm | % YoY change | EURm | % YoY change |
Total System sales | 0.49 | 52.9% | 0.55 | 37.7% | 1.04 | 44.5% |
LFL System sales | 0.37 | 15.7% | 0.40 | 5.5% | 0.78 | 10.2% |
1 System Sales - total retail sales including sales from corporate and sub-franchised stores. unaudited
2 Like-for-like System Sales growth in Euro, matching trading periods for the same stores between 1 January and 30 June 2022 and 1 January and 30 June 2023
3 Difference between Total System Sales growth and LFL system sales growth driven by 3rd store opening in June 2022
The transition of the Croatian currency from the Kuna to the Euro at the beginning of 2023 contributed to weaker sales in January, whilst also being impacted by inflation. However, since February, Croatia has seen strong double digit LFL Sales growth, excluding a temporary drop in June resulting from two long public holiday weekends.
H1 2023 System Sales increased by 44.5% vs. H1 2022, benefitting from the third store opening in June 2022. LFL Sales also increased strongly, up 10.2% against the prior period.
At the start of 2023, the Croatian business began utilising the benefits of group purchasing, which should meaningfully reduce direct costs.
A fourth store opened in Croatia at the end of June and has reported strong sales since launch. A fifth store is planned to be opened at the end of Q3.
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 / Jen Boorer
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 117 stores and restaurants throughout cities and towns in Poland and Croatia.