DP Poland, the Poland Domino’s Pizza franchise owner, appears to have successfully honed its promotions and menu offering with strong sales growth in its older Warsaw sites.
It has cost more than expected to set up each store. Online sales make up 21% of the total revenues with average transaction size one-fifth higher than from the stores. There are 15 stores in operation in Warsaw with a further five planned this year, plus the first five stores outside of the capital.
Revenues more than quadrupled from £425,000 in 2011 to £1.78m in 2012. The loss increased from £2m to £3.13m with the overall cash outflow, including capital investment, similar to that. Some of the stores are starting to break even before central costs.
The first store was opened two years ago. So far all the stores are company-owned but the first sub-franchised store should open in Warsaw this year.
January like-for-like sales more than doubled and gross profit growth was slightly faster at 123%. These figures cover 12 sites.
DP Poland is expected to continue to lose money for the next three years but the cash in the bank will help to cover this cash outflow. There was £10.9m in the bank at the end of 2012. That cash will cover the expected losses plus some capital investment on new sites.
At 24.25p a share, DP Poland is valued at £23.2m.
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