DP Poland reports further growth in first half

11th Jul 2024 13:00

(Sharecast News) - DP Poland, the master franchisee and operator of Domino's Pizza stores across Poland and Croatia, reported growth across its key financial and operational metrics in a first-half update on Thursday.

The AIM-traded firm said that in Poland, like-for-like system sales grew 22.2% year-on-year during the six months ended 30 June.

It said the delivery segment continued to expand, now accounting for two-thirds of system sales.

Order counts were a major driver of revenue growth, with Poland's like-for-like system orders increasing 18.8% year-on-year across the period.

The average weekly order count per store in Poland rose to 825 for the first half of 2024, reaching 850 during the second quarter, up from over 800 in the fourth quarter of 2023.

In Croatia, growth was primarily driven by new store openings, resulting in a 68.6% increase in overall sales.

Like-for-like system sales growth was 6.1%, which aligned with expectations.

Despite upward pressure on food costs, particularly dairy products, the company said it successfully grew its market share without sacrificing store-level profitability.

Operationally, DP Poland said it was on track to open 16 new locations in 2024, comprising 12 new sites and four store relocations to optimise its network.

Additionally, the company completed the investment in new silos at its Lodz commissary, which it said would enhance operational flexibility, reduce flour costs immediately, and improve margins over time.

"DP Poland has achieved a third consecutive year of growth in excess of 15% in the first half," said chief executive officer Nils Gornall.

"The group continues to benefit from our consistent strategy, providing a compelling value proposition for our customers based on fantastic quality pizza delivered quickly.

"Growth accelerated in the second quarter, with like-for-like system sales up 26.5% and average weekly order counts reaching over 850 per store, and on track to achieve our 900 target."

Gornall said that while the company faced rising food costs, it remained dedicated to gaining market share and was confident in meeting market expectations for 2024.

"We are on track to open 16 new stores in 2024, of which four are relocations, expanding our current 111 store count.

"Overall, we are extremely pleased with sales growth, and look forward to the remainder of the year with confidence.

"The group continues to demonstrate what can be achieved in its owned stores, and the planned transition to a sub-franchisee model will accelerate growth and increase return on capital."

At 1203 BST, shares in DP Poland were up 5.58% at 11.35p.

Reporting by Josh White for Sharecast.com.