Final numbers from DP Poland plc (LON:DPP), the Domino’s Pizza franchise holder for Poland, showed good momentum as it reported strong sales growth and an improvement in underlying earnings.
Notably, it has now achieved 13 consecutive quarters of double-digit like-for-like systems sales growth (that includes own managed stores and sub-franchised).
And last year marked a step-change in that its own managed store EBITDA (underlying earnings) moved to a positive £174,000 compared to a loss of £254,000 the previous year due to strong sales growth and reduced costs.
The firm also has plans to roll out substantially more stores this year.
Total retail sales, that includes from corporate and sub-franchised premises and not including three stores closed in 2014, rose 22% to £4.11mln (2014: £3.38mln).
Meanwhile like-for-like sales were up 16% on the year, while 67% of Total delivery sales were made online.
The contribution from the commissary, which supplies non-food and services to sub-franchisees, was also significant and a new facility was opened in September in Warsaw.
For the group as a whole, EBITDA loss was reduced to £1.64mln compared to a loss of £2.38mln in 2014.
What it does
DP Poland has the exclusive right to develop, operate and sub-franchise Domino's Pizza stores in Poland.
Currently there are 24 in five Polish cities, Warsaw, Krakow, Wroclaw, Gdansk and Szczecin, with 16 corporately managed and eight sub-franchised. Stores 25 and 26 are due to open imminently - neither are in Krakow or Warsaw.
What the chief executive Peter Shaw said on sales growth
"It's really as a result of our sales and marketing efforts over the last few years that have brought these stores to a very good stage."
On the pipeline of store openings
"It's looking good. We work very hard at making sure that we get the right sites.."
On what sets you apart from local competitors.
"We are a pure play delivery and collection pizza provider.." (most others are sit-down restaurants).
On raising money this year
"No, absolutely not," he said, adding that the group was well funded ending the year with nearly £7mln in the bank, allowing it to "push on the accelerator with store roll-outs".
On the year ahead
"2016 looks set to continue the strong story of 2015, with robust consumer demand, strong like-for-likes and the encouraging performance of new store openings in and beyond Warsaw
"Expansion is not without its challenges, but I believe that the combination of a proven team, a well-funded roll-out plan and the evident popularity of the Domino's proposition will see 2016 become a significant milestone year for Domino's Pizza in Poland."
What the broker said:
House broker Peel Hunt said: "Perhaps most encouraging of all is that the new stores opened outside of Warsaw have hit the ground running.
"This suggests to us that the brand is penetrating beyond the capital at a rate faster than we expected originally."
Analyst Nicholas Batram added: "The performance of the business over the past few years gives us confidence that Domino’s Pizza will succeed across Poland.
"Based on the UK, and adjusting for urban population densities, it is possible that Poland could accommodate over 500 stores. At that point, DP Poland would be worth considerably more than the c£30m it is today."
The broker has a target price on the shares of 30p and a 'buy' stance.
Shares eased today 1.79% to 27.5p.