26th Mar 2019 11:07
LONDON (Alliance News) - DP Poland PLC on Tuesday reported a widened loss for 2018 on higher costs, both direct and administrative, despite an increase in system sales and revenue for the period.
Shares in the Domino's Pizza brand master franchisee in Poland were 10% lower at 7.55 pence on Tuesday.
DP Poland reported a pretax loss of GBP3.8 million for 2018 from GBP2.6 million the year before.
Loss before interest, tax, depreciation and amortisation widened to GBP1.9 million from GBP1.8 million at actual exchange rates, due to lower-than-expected sales in the second half of the year.
DP Poland reported a rise in direct costs to GBP11.4 million from GBP9.7 million the prior year, as well as increased selling, general and administrative expenses to GBP2.8 million from GBP2.5 million.
The franchisee also recognised an impairment charge of GBP631,118, relating to eight stores where performance has been below expectations, and the investment in those stores cannot be used anywhere else.
However, revenue for the year grew by 19% to GBP13.4 million from GBP10.5 million the year before.
Total system sales, which includes sales from corporate and sub-franchised stores were up 21% to PLN71.9 million, or GBP14.9 million, and there was a 6% like-for-like increase in system sales on the prior year.
During the year DP Poland opened 9 stores, bringing the total number to 63. With 3 more stores opened since the end of 2018, it now has 66 Domino's Pizza stores, 42 of which are corporate.
Looking ahead, DP Poland said it saw a negative like-for-like sales performance in January and February, due to tough comparatives following the company trialling national advertising at the start of 2018.
"In spite of a challenging second half to the year we achieved a 24% increase in system sales and significant growth in both corporate store Ebitda and commissary gross profit in 2018," said Chief Executive Peter Shaw.
"Understanding the external factors that negatively impacted sales growth, namely the unusually warm and dry weather and unprecedented levels of advertising spend by the two main delivery aggregators, has informed our sales and marketing response in 2019," Shaw added.
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