viewDP Poland PLC

DP Poland sees sales rise more than 60% in 2016

The pizza maker has now posted double-digit sales growth in each of its last 17 quarters

domino's worker holding a pizza
71% of delivery orders were made online last year

Poland continues to prove itself as a pizza-loving nation as DP Poland Plc’s (LON:DPP) rapid growth in the eastern European country accelerated again last year.

Total system sales, which includes new stores, increased by 62% to PLN38.5mln (approx. £7.8mln) for the 12 months to 31 December 2016.

Growth didn’t just come from new additions to the company’s store portfolio – which now stands at 39 – with like-for-like system sales up 27% year-on-year.

The firm has now notched up 17 consecutive quarters of double-digit like-for-like sales growth dating back to 2012.

DP Poland looks set to make that 18 quarters as well, noting that the strong trading had continued into the New Year.

The increased sales helped the pizza maker to narrow its underlying (EBITDA) losses to -£1.58mln from -£1.71mln a year earlier.

“Our accelerated store roll-out plan and strong like-for-like performance drove sales volume and improved contributions from corporate stores and commissary,” said chief executive Peter Shaw.

“We will continue to drive sales volume growth through 2017 and anticipate group EBITDA losses further reduced for 2017.”

WATCH: CEO Peter Shaw on ‘fantastic’ growth

Shaw added that the group expects to cross the 50 store mark at some point this year, with 6 stores currently under construction and several more not too far behind.

The group loss for the period widened to £2.5mln (2015: £2.2mln) and DP Poland said this was mainly due to a higher depreciation, amortisation and impairment charge as well as an increased share based payments charge.

The company finished the year with a healthy cash balance of £6.3mln (2015: £7mln) after raising £3mln after expenses back in October.

Shares were down 3% to 50p on Monday morning.

Brokers like the taste of DP Poland

“DPP continues to be on track, building a platform from which to exploit the long-term potential of the Domino’s brand in Poland,” said Peel Hunt analyst Ivor Jones.

“With like-for-like momentum; an acceleration in new store openings; and a growing sub-franchisee base we expect to see the share price momentum restored.

Jones added that the group EBITDA loss was in-line with his forecasts and “reflects investment in expanding the team in Poland and developing a new commissary which will take capacity to 150 stores”.

--Updates for broker comments, share price and CEO video--

Quick facts: DP Poland PLC

Price: 7.6 GBX

Market: AIM
Market Cap: £19.27 m

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