DP Poland announces placing to accelerate store rollout

DP Poland announced the placing of just under 6.67m shares at 48p per share to raise about £3.2m to accelerate the rollout of new stores.

The company, which runs Domino’s Pizza franchises in Poland, said the placing represents around 5.1% of the existing issued share capital and the price is a discount of approximately 1.3% to the closing mid-market price on 4 October.

Explaining the reasons behind the placing, DP noted that as at 30 June 2016, its net cash balance was around £5.3m.

“This level of cash resources is sufficient to fund the company's plans for additional new stores in line with current market expectations.

“However, in light of store opening momentum building strongly and current trading, the board is confident in the Company's business model and intends to accelerate the roll-out of new stores. It is for this reason that the company is seeking further equity capital from new and existing investors by way of the placing.”

Proceeds from the placing are expected to provide the funds required to open a further 20 stores, over and above current market expectations, by 2020. The proceeds will either be used to fund corporately-owned stores, or will be loaned to “high-calibre” store managers to enable them to open their own sub-franchised stores.

DP also said on Wednesday that it continued to trade strongly in the third quarter and is trading in line with market expectations in respect of the current financial year.

At 0928 BST, the shares were up 17.2% to 57p.