Yet another quarter of growth for Domino's Polish operator

Domino’s Pizza master franchise holder for Poland, DP Poland, posted its first half results to 30 June on Monday, confirming that there were now 48 stores open across 19 cities in the country at year-end - 13 of them opened in the 2017 calendar year.

The AIM-traded firm said of its stores, 25 were corporately managed, two were under management contracts and 21 were sub-franchised.

It reported a 37% increase in stores since 1 January 2017, with three stores currently under construction, and the board saying it was on track to cross the 50 store mark in October.

System sales were up 50% to PLN 27m, with like-for-like System Sales up 17% year-on-year.

The latest like-for-like system sales for July were up 24% and for August were up 28%, the board added.

DP Poland had now completed 19 consecutive quarters of double digit like-for-like system sales growth since the fourth quarter of 2012.

Combined corporate store EBITDA and commissary variable profit was up 39%, the board said, with group EBITDA losses narrowing 5% year-on-year at constant exchange rates.

Group EBITDA losses increased 3% year-on-year at actual exchange rates, however.

Operationally, the company’s second commissary was operational and it now had total commissary capacity of around 150 stores, with the board adding that 73% of delivery system sales were being made online.

“We are on track to cross the 50 stores mark in October, as we drive towards the critical mass that will support national television advertising and further economies of scale in procurement,” said chief executive Peter Shaw.

“New store openings in combination with robust like-for-like sales growth increased system sales by 50% in the first half of 2017.

“In July and August we saw like-for-like system sales grow by 24% and 28% respectively.”

The twin sales streams of corporate stores and commissary delivered an increase in combined corporate store EBITDA and commissary variable profit of 39%, Shaw explained.

As the company’s newest store sales built and they moved into profitability, the company would see a further uplift in that figure, he added..

“Our new commissary opened at the end of August, ahead of schedule, and is now supplying stores to the north, south and west of the country, while our original facility in Warsaw continues to supply the capital city and the east.

“Our expansion is further underpinned by the robust growth of the Polish economy.”