TIDMDPP
RNS Number : 8220I
DP Poland PLC
21 April 2022
The information contained within this announcement is deemed to
constitute inside information for the purposes of article 7 of the
market abuse regulation (EU) no. 596/2014
DP Poland PLC
("DP Poland" or the "Group")
Q1 2022 unaudited trading update
DP Poland, the operator of pizza stores and restaurants across
Poland, announces a trading update for the first quarter of
2022.
DP Poland's Chief Executive Officer, Piotr Dzier ek, said:
"I am delighted to see the strong sales performance in Q1 2022,
with LFL System Sales up 21% over 2021, benefitting from a strong
management focus towards increased order volumes in our stores. At
the end of March 2022, Poland lifted the majority of COVID-19
restrictions and we have seen a further acceleration in sales
growth, with LFL System Sales up 29% in March 2022 compared to
March 2021.
We have invested in marketing to drive enhanced customer
acquisition, whilst maintaining a compelling value proposition for
existing customers. This has continued the strong sales growth into
early April 2022.
As previously announced, inflationary pressures have been high
and persistent. We have been monitoring the situation closely and
raised prices in early Q2 2022 to mitigate these pressures. As the
business continues to strengthen, we have restarted our store
opening programme, with two new store openings expected in Q2
2022.
We are also seeing an increase in M&A opportunities in our
sector, however we remain disciplined in our approach to M&A
and will only review potential opportunities that have a clear
strategic rationale and value accretive metrics."
Financial Highlights
-- Like-for-like (LFL) System Sales(1) increased by 21.3% in Q1 2022 compared to Q1 2021
o LFL System Sales for March 2022 increased by 29.3% compared to
March 2021
o Delivery LFL System Sales have continued to grow despite a
resurgence of dine-in sales following the relaxation of COVID-19
restrictions
o Particularly strong growth in carry-out sales following
increased promotional focus, up 84.6% compared to Q1 2021
-- Total System Sales(2) increased by 22.6% in Q1 2022 compared to Q1 2021
-- Q1 2022 System Sales significantly above pre-COVID-19 levels
o LFL System Sales increased by 17.8% in Q1 2022 compared to Q1
2019
o Total System Sales increased by 11.4% in Q1 2022 compared to
Q1 2019
Q1 2022 vs Q1 2021 vs Q1 2020 vs Q1
2019
---------- ----------
LFL System Sales 21.3% 17.6% 17.8%
Total System
Sales 22.6% 13.4% 11.4%
----------------- ---------- ---------- -----
-- Higher sales have been affected by high inflationary cost
pressures, which have persisted. Polish CPI inflation was reported
as 10.9% in March 2022 vs 8.6% in December 2021
-- Cash at bank of GBP1.55m as at 31 March 2022 (as at 31 December 2021: GBP1.80m)
(1) Like-for-like System Sales growth in PLN, matching trading
periods for the same stores between 1 January and 31 December
2019,1 January and 31 December 2020,1 January and 31 December 2021
and 1 January and 31 December 2022
(2) System Sales - total retail sales including sales from
corporate and sub-franchised stores, unaudited
Operational and strategic highlights
-- COVID-19 restrictions in Poland substantially reduced at the end of March 2022
-- Orders volume up by 22% March 2022 compared to March 2021 and
up by 17.1% Q1 2022 compared to Q1 2021
-- Introduction of reduced menu which is expected to improve
operational efficiencies and drive cost reductions to help mitigate
inflationary pressures
-- Store opening program restarted, with two new stores expected to be opened in Q2 2022
o The Group operates 122 stores at the end of Q1 2022 (including
two seasonal stores)
-- Since the start of the war in Ukraine, DPP has hosted
refugees in its offices and also rented apartments for people who
have fled Ukraine, provided transport to and from the border,
offered job opportunities to the refugees or providing free pizza
to volunteers in refugee reception points
Trading performance
PLN m Q1 2019 Q1 2020 Q1 2021 Q1 2022 % change vs. 2019 % change vs. 2020 % change vs. 2021
------- ------- ------- ------- ----------------- -----------------
Total System Sales 41.3 40.6 37.5 46.0 11.4% 13.4% 22.6%
LFL System Sales 36.4 36.4 35.3 42.8 17.8% 17.6% 21.3%
dine-in 8.7 7.4 0.9 5.5 -37.1% -25.8% 520.5%
delivery 24.6 25.9 31.1 31.2 26.7% 20.4% 0.2%
carry-out 3.0 3.1 3.3 6.2 103.7% 97.7% 84.6%
Non-LFL System sales 4.9 4.1 2.2 3.2 -35.9% -23.3% 44.3%
--------------------- ------- ------- ------- ------- ----------------- ----------------- -----------------
Q1 2022 delivered strong sales growth against the previous three
years, with trends accelerating towards the end of the quarter and
continuing into Q2 2022. COVID-19 restrictions were lifted on 28
March 2022, but by 14 February 2022 children had returned to
school, which brought families back to large Polish cities.
The delivery business constitutes 72% of Total System Sales and
it is encouraging that delivery sales have been maintained despite
the strong resurgence of dine-in sales, up 520.5% vs Q1 2021. It is
expected that dine in sales will continue to benefit from
increasing tourist numbers, which have remained low relative to
2019, following the removal of COVID-19 restrictions in recent
weeks.
The carry-out business has been a core focus for management in
Q1 2022, helping to increase total order numbers and better
leverage the large store network whilst lowering labour delivery
costs. In response, carry-out sales grew by 84.6% compared to Q1
2022.
High inflationary costs have been persistent, particularly for
food and labour. The Group's operating scale has helped to limit
the impact relative to our competitors, while a new smaller menu
has been introduced to all stores to improve operational excellence
and reduce food costs.
DP Poland has continued to offer a compelling value proposition
to customers to maintain higher order volumes, helping to mitigate
higher labour costs. Sales have continued to grow strongly in early
April 2022, despite the implementation of recent price increases to
offset higher food costs.
The store opening program has restarted as the Group remains
confident in the outlook for 2022. Two new stores are expected to
open in Q2 2022, with the potential for more as the year
progresses. In addition driving growth organically, there also
remains the opportunity to consolidate the fragmented marketplace
in Poland. We are seeing an increasing number of potential M&A
opportunities, however, we remain disciplined in our approach to
M&A and will only review potential opportunities that have a
clear strategic rationale and value accretive metrics.
2021 full year results
The Group expects to announce its final results for the year
ended 31 December 2021 early in the second half of June, which will
include a webinar for investors. The management expects that full
year EBITDA figures will be in line with market expectations.
The person responsible for arranging the release of this
announcement on behalf of the Company is Przemys aw G bocki ,
Non-Executive Director.
Enquiries:
DP Poland plc
Przemys aw G bocki, Non-Executive Director
Tel: +48 (22) 654 64 15
Singer Capital Markets (Nominated Adviser and Broker)
Shaun Dobson / Will Goode / Amanda Gray
Tel: +44 (0) 20 7496 3000
Notes for editors
About DP Poland plc
DP Poland, through its wholly owned subsidiary DP Polska S.A.,
has the exclusive right to develop, operate and sub-franchise
Domino's Pizza stores in Poland. Following its acquisition of
Dominium S.A., which constituted a reverse takeover under the AIM
Rules for Companies, the Group now operates over 100 stores and
restaurants across a number of cities and towns in Poland.
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