Dp Poland Share Discussion Threads

[guernseymoney] 30/7/2014 10:40

bigboyo

There was a good(ish) presentation last year with Mr Shaw re interims (but not final results I believe....!!):



Yet I don't think this was even on their website. Similarly, Mr Shaw did a video interview on Interactive Investors earlier this year.

I have followed this share since IPO and plan to keep watching. I don't have life-changing money in this share, but enough for it to make a difference if it goes either way. Tail risk....

[bigboyo] 30/7/2014 09:42

guernseymoney

Many companies do trading updates just before the closed period prior to releasing results.

DPP needs to get into the mindset that if it wants to attract a wider sharbase then it needs to become a little more professional in its communications.

Granted, Esher may be very salubrious in summer but the business surely should come first ?

[guernseymoney] 29/7/2014 12:35

bigboyo

Thanks for your thoughts, I fully agree with you - it's a race to get cashflow positive for DPP or either raise capital and dilute the thing to death (like they did last time) or walk away.

I saw a Dominos in Switzerland last month and it was shocking - looked like something from 1990 - was empty, old school branding and naff - not sure if it's DOM who have the Swiss stores also.

I also saw a Dominos just off Warmoestraat (red light) in Amsterdam at the weekend whilst on a stag do - that was an impressive store and had QUEUEs of people - fair enough it was in a tourist area, but all of the point of sale/shopfit looked very appealing - am hoping the S2 format looks as good.

As for sub-franchisees, that's another big unknown. They have one to date I believe, who they lent funds to...

And agree it's rubbish how long they take to get any numbers out, how there are not any RNS's etc etc

Again, sit and wait...

[bigboyo] 29/7/2014 12:17

guernseymoney

Looks like DOM took a BIG writedown on its German MFA and corporate stores. Obviously this is a non-cash item but the balance sheet is weakened.

Germany is still a problem for DOM but their cashflow from the UK and ROI business means that they have time to turn it around.

DPP has no such luxury and the stores have to be cashflow positive in quick time. The real issue now is how fast they can get hold of sub-franchisees to part with franchise fees and to open S2 format stores.

Its interesting that DPP takes so long to report its half year figures (same accounting periods) whereas DOM brings them out much faster even though DOM is 50 times bigger.

[guernseymoney] 24/6/2014 14:45

Bigboyo - I know little other than what I google, what DPP releases and what I read on forums. This is a binary share for me, lose it or get a two/three bagger return.

I should try and go and have a look at operations out there, what you say is worrying. As was this DPP video on youtube.....



Strange marketing!!! Perplexing.

Anyhow, I like Poland, I like the brand, I like the prospect and the management.

I do worry about the cash burn however.

[bigboyo] 23/6/2014 12:07

Guernseymoney

Just went to Polish site. Seems like a third store has opened in Krakow and it seems to me that at least 2 existing stores in Warsaw have been closed.

From what I can deduce from website there are 15 stores in Warsaw and 3 in Krakow. Can anyone confirm this ?

For such a tiddly company this surely should be news that is RNS stuff ??

[guernseymoney] 06/6/2014 08:28

Don't be mean!

No point, just incase followers of DPP or Polish economy had not seen/read the article. DPP is a play on Poland, as well as the brand.

This might be more interesting for you?:

hxxp://www.research-pmr.com/userfiles/file/wp/wp_28_712_2012_11_30_PMR_Polish_consumers_still_enjoy_pizza_04.pdf

Also, check out the DPP poland website (i.e. the one you order pizzas from). I was impressed, plus lots of push for mobile sales (i.e. download the app etc).

[hybrasil] 06/6/2014 08:16

And your point?

[envirovision] 25/4/2014 20:13

Ahh ok yea I tend to agree with you, mug punters only need apply imo

[guernseymoney] 25/4/2014 16:43

Good question. The short answer is that I don't know. I think they should have raised more money last time and not diluted the life out of the share. POOR decision IMO.

The cash burn risk definitely exists, but y-o-y growth might just save the day.

I need to try and find something a CFA colleague did that put fair value at 90p.

Personally, this is just a punt for me, not a serious investment. I like the brand and pizza.

I have seen Dominos in other European countries and it's not looked good (i.e. Germany and last week, Switzerland) but Poland is differnt. Krakow/Warsaw have cosmopolitan vibes, the demographic feels much more synchronised with the DPP offering and I'd argue with anyone who told me that Poland didn't have an economy worth investing in.

[envirovision] 25/4/2014 15:19

When do you think they will run out of money based on your bean counting?

[guernseymoney] 25/4/2014 15:16

That was interesting, thanks for that.

Even more interesting is the fact the shares in DPP are 10p!!!

Just topped up, risky, but plan to sit on these for the next few years.

I have scrutinised the accounts (as a beancounter myself) and yes it's likely they will need to raise more funds, but I believe on an NPV basis, there is value here.

AIMHO

[bigboyo] 25/4/2014 14:41

Interesting article ...

[bigboyo] 01/4/2014 14:09

Maiken, Agree about the managment.

They seem to believe that having an out of date (18 months out of date) investors web site is acceptable. Does AIM have rules about his sort of thing ?

All seems a little shambolic and a little out of control.

[maiken] 26/3/2014 07:28

As it goes M1das,I also reduced my already smallish hldg at 14.1p.I've kept a residual because that way I won't forget dpp,which I don't want to do.I did some very rough analysis of the earliest yrs of Dom UK[as a quoted co.] to try and get a better understanding of where dpp might start to be approaching profitable momentum.Very [very!]roughly I concluded average store t/o needs to be £300k +p.a.provided there are 60+ stores over which to spread central costs.Again it all comes back to getting those sub-franchisees on board.
I also share your scepticism over mgmt[altho' the non execs look stronger now].It seems they royally shafted private shareholders at the last placing with a MASSIVELY dilutive issue available exclusively to institutions.I also note they seem to me to have increased directors emoluments by nearly 50% this year !

[maiken] 24/3/2014 12:02

Thanks big boyo,very interesting.

[bigboyo] 24/3/2014 09:56

maiken,

Look at the small print in the accounts :

1/ A loan was issued to the subfranchisee of some £126,000 and this is still outstanding. This tells you that DP is financing the sub franchisees CapEx. and reveals the cost of the S2 propertycost/shopfit as being circa £126K.


From the 2012 accounts (published March 2013) :

"We plan to build ten further stores in 2013, one of which will be, as indicated above, a pilot sub-franchise store. The CAPEX for this sub-franchise store will be initially provided by the Company, to be repaid by the sub-franchisee over a defined period. The sub-franchisee will bear all OPEX costs of the store on an on-going basis. "

This would obviously make it a very attractive model for a subfranchisee but is totally unsustainable for a national roll out.

Given the poor track record of communication from the "Board" there is a serious risk of share price drift until more subfranchisees are recruited and done so on basis that they are investing their own capital and not being given large loans to in effect take on a franchise.

[maiken] 24/3/2014 09:28

To clarify,Hybrasil's comment on cash is duly noted.I agree inasmuch as it seems to me they will be cashflow negative for at least 4 years,even if they maintain current growth rates.There's absolutely no way I can see that they'll be profitable before the cash runs out.However the co. may have,in 2 years,more leeway to gear up the balance sheet with some debt rather than issue shares,Plus the addition of sub-franchisees will help enormously with cashflow.That's why I place such emphasis on any future news of new franchisees,in addition to their long term fundamental role in the business model.
I seem to recall in the UK the directors eventually sold the co.owned stores to franchisees which would also help cashflow here.
The enterprise value,ignoring cash on balance sheet 'cos we all know every penny will be spent in the next 2 years,of DPP at 14.5p is approx £14m.Potentially very good value but,upon reflection,I think I agree with M1das there's no rush to fill your boots.I continue to hold and welcome comment.

[m1das_touch] 24/3/2014 08:46

I'm disappointed that they've adjusted their strategy yet again (this must be the 4th or 5th time at least since flotation!). I guess it's inevitable at this stage in the company's development, but it doesn't give the impression that management have a clear and well thought through vision for the business. I wasn't involved in the early stages of DOM...does anyone remember if there were similar constant changes in strategy and shifting of the goalposts regarding store openings?

At least there are some good signs of progress in these results, but it's all so painfully slow and their investor relations are poor. I'm not convinced that they'll be profitable before the cash runs out, so wouldn't be surprised if we're looking at another cash call 18 months or so down the line.

Personally I still need to be convinced that this management team has what it takes to implement the successful Domino business model in Poland.

Holding on for now, but frustrated to say the least! Fortunately like you maiken my holding is relatively small compared to overall portfolio - option money really.

[hybrasil] 24/3/2014 08:43

This time next year will tell a lot.

The sales growth is pretty impressive albeit achieved with a massive spend on the companies part.

[maiken] 24/3/2014 08:03

They have enough cash [£7m]to last over two years at current rate of burn.I'm comfortable with that.Like for like sales growth of 40% is very pleasing to me and dispels the fear that Poland might fall into the same "difficult" category as Germany currently appears to be with L for L recently announced of only 4%,a dismal performance for such an immature market receiving such a huge investment as is currently being injected by Dominos UK PLC.
Personally I'd expect the shares to open a little higher,but what do I know ?
If they drift down I may consider adding a bit to my smallish holding,recently opened at 15.5p.
the thing i'd really like to see is the announcement of new sub-franchisees.That would make me very bullish.

[hybrasil] 23/3/2014 07:08

lovely quiet board.

They still have to have loads of cash. Its now merely a question of can they implement the strategy. Price could dip a bit more.