Dp Poland Share Discussion Threads

[guernseymoney] 26/11/2015 12:33

Thanks Hybrasil, I use a bit of NPV/fundamental analysis, but it's all witchcraft at the end of the day, too many variables.

I honestly think gut instinct is the only way forward.

I didn't know Easyhotel had IPO'ed, stayed there a few times when in the big smoke. Looks attractive!

[hybrasil] 26/11/2015 09:11

guernseymoney

Thank you for going to that effort and for your post.

I just dont invest like that.

I bought into fevertree in March. I have nearly tripled my investment.

I bought into autotrader and have done well but not so well in Easyhotel up only 2%.

I like buying names and I did so well out of the original dom that I feel that the possibility exists of a stellar price rise.

That doesnt exist in your financial model.

I fully appreciate that you are going about it the way an investor should. Thats
not my way.

Currently on my watch list are Jimmy Choo (which my wife wont let me buy as she says the heels only last one wear)and hostelworld which I foolishly missed out when I was asked to invest in it privately many years prior to its flotation.

[guernseymoney] 24/11/2015 11:04

postscript: I suppose, maybe the market wouldn't value at £1.89 a share, because there had been the 2 x capital raises.

All I am saying is that I am worried about the financing for the future drive and what that means for existing holders.

[guernseymoney] 24/11/2015 10:55

Hybrasil

My bad, the June 2015 interim a/c were out of date. They have raised;
IPO: £15.6m
Circular @15p: £10.5m
Circular @15.8p: £5.5m

On the subsequent fundraises, am not sure they are going for such small, incremental amounts, it's confusing and costly, particularly when they know cash burn is going to mean other funding.

Agreed that the stock market is there to raise capital, but....

DPP IPO'ed with 19m shares in issue, it now has 138m in issue.

Capital raise = dilution. No shareholder wants dilution, surely?

If you held 1 share back in 2011, that was one share out of 19m or so (per the FS back in 2011).

If you held 1 share today, that is one share out of 138m!

i.e. EPS is massively diluted and the value of your share is something like 1/7th of what it was before the additional cap raise(s).

If DPP, raise more money, then the EPS value of your share gets even lower.....

So, taking things to market cap = 138m x 26p, values the company at £35.8m.

Had there not been a dilution, the market would presumably still value the company at £35.8m, but the share price each of the 19m shares in issue(as opposed to 138m shares now in issue following dilution), would be £1.89 a share!

I hold and like DPP, but am worried about further dilution - ergo the risk that my current shareholding becomes less and less valuable as the company strives to meet operating/expansion costs.

[hybrasil] 24/11/2015 10:28

guernsney

I went through all the capital raises to include the 6m odd raised when it floated.

Frankly I'm amused by the posters who are concerned about a further capital raise.

In my book that is what the stock market is for.

[essential] 24/11/2015 08:45

Bought into these this morning - technically looking strong. Showing as a sell on advfn?!

[guernseymoney] 23/11/2015 17:32

Where is that £29m from?

The share and share premium a/c total £19m (before retained loss of £13m is taken into account), so surely they only raised £19m?

And net assets of £5.5m (as at June 2015 interims).

For the record, again, I hold and will continue to hold, but can't see how they can grow to any meaningful size without dilution or being sold to DOM or similar - the cash burn is too high and they're not going to find enough franchisees.

"Our further store roll-out represents an exciting next step in the growth of this business, but we must recognise the impact that new store openings will have on the bottom line before those stores hit breakeven."

[hybrasil] 23/11/2015 17:23

Looking back since flotation it has raised about £29million so its value is now only about 15% more than the cash raised.

[jakleeds] 23/11/2015 17:03

Yep, ending with a 100k buy.

[matt123d] 23/11/2015 16:44

Double average daily volume today.

[jakleeds] 23/11/2015 12:29

Great link, thanks Matt.

[guernseymoney] 23/11/2015 12:17

Nice bit of PR in that link, everyone knows students have money to waste on pizza. It doesn't answer how DPP plans to (i) stop the cash burn in the short term and (ii) fund the store growth.

Again, I just can't see how it can go anywhere without further dilution. OK, they might be able to finance something, but you're looking at north of £10m.

Per the latest FS, "there remains a long journey ahead to reach Group profitability" and a quick peek at the cash at bank and cash flow stmt makes another fundraising round (and dilution) inevitable.

[guernseymoney] 23/11/2015 12:05

I am bullish still (and sitting on a 2.5 bagger), but am not ruling out more (diluted) fundraising. They're going to need a lot more lead in the financial pencil to get the store count anywhere meaningful and no ways they can finance this internally or through franchisees.

Hold.

[jakleeds] 23/11/2015 12:02

Very tasty ...

[parvez] 23/11/2015 11:59

Breaking out for sure.....Just bought another 20K myself.
I wonder if someone like Luke Johnson would probably buy out this lot and expand it much faster?

[hybrasil] 23/11/2015 11:45

bought 10k more this morning very few available electronically

[tromso1] 23/11/2015 11:29

Buying starting to pick up.

[jakleeds] 21/11/2015 14:34

He previously said this:

"There are 5 cities in Poland with a population of at least 500,000, and 39 towns and cities of at least 100,000 people. With this population base and the increasing urbanization of Poland we believe that there is significant potential for expansion. The largest pizza chain in Poland has over 200 stores. We believe that the long term potential for Domino's Pizza in Poland is at least 300 stores, based on an assessment of population, the growing Polish consumer economy and ...."

[jakleeds] 21/11/2015 14:06

And he further expanded :

Commissary

To date we have had a highly flexible commissary operation, working on a third party's premises and using their labour. We have now reached the production and supply volumes to make it more economic to open our own commissary, employing our own production and warehousing staff.

Our new commissary will start operating imminently, to supply all Domino's Pizza stores in Poland with fresh dough, ingredients, boxes and other supplies. Based in a logistics park we have constructed the commissary with efficient use of space and good access to the national road network.

With a total investment of less than GBP300k, approximately one third of which is funded by leasing, this is a capital-efficient step giving us an initial capacity to supply 50 stores, with the potential to extend dough production for up to 100 stores with a minimal additional capital outlay. We believe our new commissary will significantly benefit the bottom line, with improved costs of dough production, warehousing, order picking and goods handling inbound and outbound.

H1 2015 has seen marked improvements in our food costs as our negotiating power has been strengthened by growing order volumes, coupled with reductions in European food prices. The contribution of the commissary through sales to sub-franchised stores has to-date been AHEAD OF EXPECTATIONS. "

[jakleeds] 21/11/2015 14:01

In Peter Shaw's own words in the results in September:

"I am delighted to announce the imminent opening of our new commissary, which will give us the capacity to supply fresh dough and ingredients to our expanding store estate across Poland, while positively impacting the cost of dough production, warehousing, order picking and goods handling. With an initial capacity to supply 50 stores, the new commissary will give us the option to expand production capacity further to supply up to 100 stores, with minimal additional capital outlay."

Awesome.

[lbo] 21/11/2015 13:26

In Peter Shaws own words in the results in September "but we must recognise the impact that new store openings will have on the bottom line before those stores hit breakeven"

[matt123d] 21/11/2015 00:28

Recognia has detected that DP Poland PLC (DPP on LONDON) has entered Wave 5 of its Elliott Wave cycle. This bullish signal indicates that the price may rise from the previous close of 25.88 to the next Elliott Wave target price of 30.65. Wave 5 is the final leg of the motive wave which moves in the direction of the overall market trend (either bullish or bearish). Wave 5 is typically the longest and strongest move for commodities. Wave 5 volume is often lower than in Wave 3. The Wave 5 target price is determined using Fibonacci ratios.

[jakleeds] 20/11/2015 22:57

Remember, there are "Significant new store openings in the pipeline for Q4 2015 ", as per the previous trading update.