DP Poland says cost pressures ease as expansion continues

DP Poland Plc (LON:DPP) has seen costs ease and a better performance from its mature takeaway pizza stores in recent months.

Lower cheese prices and staff being easier to recruit compared to the last quarter had reduced pressure on margins, said Peter Shaw, chief executive.

Poland’s economy also remained strong, with consumer demand healthy.

The company, which operates the master franchise for the US pizza group Domino’s in Poland, posted a 25% rise in sales to 50mln PLN (£10.4mln) in 2017.

Losses rose slightly to £2.64mln as DPP bore the costs of nineteen new stores opened during the period.

Two more stores have opened since the start of the year to take the estate up to 56 in total. Some 75% of deliveries now ordered online.

System sales, which includes franchised outlets, rose by 51% to £12mln with a 17% rise like-for-like.

TV ads impress

Shaw added that like-for-like system sales jumped by 30-40% during the two-week periods of TV advertising in both January and February.

Like-for-sales overall in January and February this year rose by 24% and 18% respectively.

Due to this success, TV ads will likely become a regular feature once the group reaches critical mass.

By the end of 2018, Shaw says DPP will have 70 stores and is on track for 100 by 2020.