DP Poland (LON:DPP), the Domino’s Pizza franchise holder for Poland, slashed half year losses as underlying sales growth continued to run well into double figures.
Like-for-like sales rose by 16% in the three months to 30 June, the eleventh consecutive quarter sales have topped 10%.
For the first six months of 2015, underlying losses dropped to £774,000 (£1.3mln) though statutory revenues were lower at £1.74mln (£1.94mln) as a third of the 19 stores are now franchised instead of managed as previously. DP Poland only recognises royalty and commissary sales income from franchised outlets.
Peter Shaw, chief executive, said underlying sales had maintained the momentum in the first two months of the second half, with July 18% ahead and August 17% better on a like-for-like basis.
Online sales are taking a growing proportion, with 66% of deliveries in the first half made this way compared to 58% a year ago.
Elsewhere, a new commissary is set to open imminently and will supply all Domino's Pizza stores in Poland with fresh dough, ingredients, boxes and other supplies.
It will have a 50 store capacity but eventually may supply dough to 100 stores.
Shaw expects it to have an immediate beneficial impact on the cost of dough production, warehousing, order picking and goods handling.
New store sites have also been a focus, with a third Polish city to be added later this year.
He said: "Our fourth store in Krakow opened in late August and is performing well.
“In October we will be opening in a third Polish city, joining Warsaw and Krakow and we are targeting further store openings in additional cities by the year end.
“Our most recent store openings provide encouragement that these new stores will outperform our original store openings and, perhaps more encouraging still, our most established stores look set to deliver a very healthy level of Store EBITDA (underlying profit) for 2015.”
Broker Peel Hunt said: "We are encouraged by the direction of travel, which provides increasing support for our view that it has always been a question of when rather than if Domino’s Pizza would establish itself in Poland.
"The fund-raise in July has substantially reduced the risk that the company could not finance itself through to profitability. Our DCF based on 282 stores in 2030 gives a fair value of 30p per share." It rates the shares a 'buy'. DP Poland shares added 6.85% to 19.5p on the day.