Dp Poland Share Discussion Threads

[trytotakeiteasy] 29/11/2018 09:07

aDrunkenMarcus - Good point. They listed with no stores in 2010 and opened the first store in 2011. So they listed only with the Polish Domino's Pizza master franchise agreement i.e. just with a piece of paper. It is unusual for companies to list like that. Investors are really providing high risk venture capital funding. Most listed businesses at least have revenue although lots on AIM don't.

Generally I agree. They should have listed when they were more stable. The result of listing so early on has been successive equity issues. Number of shares from 20m to 153m and counting.

[adrunkenmarcus] 29/11/2018 09:01

An interesting summary - thanks for sharing. It takes time to build a business to scale and I sometimes wonder if DPP would have been better developing somewhat as a private company before floating publicly.

[trytotakeiteasy] 28/11/2018 18:18

They have a huge amount of share options. CEO has I think over 3 million vested options (i.e. allowable for excise) at 0.5 pence. Why would he buy shares at 25p when he can vest options and buy them at 0.5p. See the annual report.

[lbo] 28/11/2018 15:53

Why aren't the Directors buying?Gold Investors Target Executives With Less Skin in the Game https://www.bloomberg.com/news/articles/2018-11-27/coalition-of-gold-investors-says-exec-ownership-key-to-returns

[trytotakeiteasy] 27/11/2018 18:32

cube.investments/dp-poland-dpp-the-bull-and-bear-case/

[sabre6] 26/11/2018 16:08

That was quite a large buy today.
Has someone called the bottom or do they have great confidence in this company.

[a1samu] 20/11/2018 12:05

After being down almost 5% today to 26p, this is still heading towards 20-22p or lower. There is no cash or value in this share!(see my comments number 875 & 878.)

[the ghost who walks] 24/9/2018 18:41

Interested in any feedback from this. Thanks

[davidosh] 23/9/2018 01:37

The full line up for Mello in the City on Tuesday at 11am will be PTSG, Dominos Poland, Nichols, Fulham Shore and Judges Scientific all presenting for 40 minutes with lunch and drinks included. I have six places left so reserve a place via

[the ghost who walks] 22/9/2018 06:08

look forward, not backwards. Focus on value creation,

[rock star] 20/9/2018 11:16

The winners here have been the Directors. Their interests are disconnected with shareholders and have been for years. The share price reflects this.

[lbo] 19/9/2018 20:39

“bets in class” ? ROFLMAO

[the ghost who walks] 19/9/2018 19:02

Must say your copy and paste skills are not bets in class. Why not just copy the link for the full report.

[the ghost who walks] 19/9/2018 19:00

Haha hardman says it's undervalue don't overvalued!

[lbo] 19/9/2018 08:07

It's overvalued when compared with many comparison valuations and as Hardman points out there are still "RISKS" which also should be discounted on those valuations"In addition to all the generic risks all businesses face, DPP has some specific threats. In the short term, food prices can squeeze profitability. With some of the competition not using real cheese, a price hike cannot be readily passed through without losing some competitive edge. Also, as mentioned above, DPP protects its franchisees against sharp rises in important commodities, of which cheese is the most important, as it represents around 30% of the cost of making a typical pizza.All businesses face competition. DPP is no different, and has rivals with different strengths and weaknesses""One of the issues facing DPP when it is looking to grow its franchise business is finding suitable franchisees with finance to invest in a new store. The average cost of opening a new store is PLN 700k but, in addition to that, a franchisee needs to be able to fund the initial losses or low profitability. With its relatively short history of running a market economy, Poland does not have an enormous pool of budding entrepreneurs.""DPP has raised equity finance regularly through its short life to fund the development of the business. It is hard to raise debt without a bedrock of profitability, although it does use finance leases for equipment needed in the stores. On our forecasts, it will finish 2020 with its cash resources almost depleted, but right at the turning point of moving to positive cash generation. This might prove too tight"

[the ghost who walks] 19/9/2018 06:58

Value is a function of return on capital, growth and risk. Hard man report very good at quantifying that. Comparing to 25 stores in uk where you do not know the return on capital, growth, or risk, is not really satisfactory versus the detailed Hardman approach.

[bigboyo] 18/9/2018 21:45

Thank you to ADrunkenMarcus for the link to Hardman's report on DP Poland.

For me, the issue is not whether DP Poland will eventually make a profit, or sell millons of pizzas in Poland or whether there will be year on year growth.

The issue for me as an investor, is can I make money from this if I become a part owner (by way of becoming a shareholder)?

Hardman's report (page20) states that the current valuation of DP Poland corporate stores is £70m. This is on basis of a store by store valuation as given in their table with the most mature 10 stores being collectively valued TODAY at £21m.

Compare this to the recent value put on the 25 HIGHLY profitable London Dominos stores that the UK parent took a 75% stake in for £24m, (thus valuing the venture at £32m for 25 highly profitable mature London stores).

www.thetimes.co.uk/article/dominos-new-recipe-for-london-l3skdbk3f

--------------------------------------------------------------

AND from the Dominos UK presentation in 2018 :

hxxps://investors.dominos.co.uk/system/files/uploads/financialdocs/dominos-2017-preliminary-results-8-march-2018-transcript.pdf

" ...because the average Domino’s store is changing hands between franchisee at 65x weekly sales. "

i.e. an average Dominos in UK changes hands at 65x weekly sales. If we use the same model for DP Poland to give value to the stores in Poland the valuation for the Polish stores is :

System sales = £ 7.75m in 26 weeks = £300,000 per week
Corporate Stores are 35 and sub franchised ar 24 (as at 30 June)
Sales at corporate stores are say £200,000 per week as they are more mature.

On that basis the Polish corporate stores would be valued at, on a UK model which is highly profitable and has evidence of ACTUAL market valuations for stores changing hand, at a mere 200K x 65 = £13m.

Hardman values these same 35 stores at £70.5m (see page 20 of their report).

On that basis, and with the rationale set out as above I would contend that DP Poland is overvalued at the present 30p per share giving a £45m market cap.

[the ghost who walks] 18/9/2018 19:10

Lbo was the loss bigger than you expected? Worth assuming losses for the foreseeable future as the business is built so would recommend thinking in terms of the operating and value trends,

[the ghost who walks] 18/9/2018 18:50

also pleased to see them addressing questions clearly

[the ghost who walks] 18/9/2018 18:49

Significant value creation in 1h. Impressive

[adrunkenmarcus] 18/9/2018 09:48

I'm reading Hardman & Co:

hxxp://hardmanandco.com/docs/default-source/company-docs/dp-poland-plc-documents/18.09.18-fully-proven-model-rolls.pdf

[lbo] 18/9/2018 09:00

Indeed! More strong loss figures

[rock star] 18/9/2018 07:58

Spent £20m and still can’t make a profit. Pretty bad use of capital imo.

[the ghost who walks] 18/9/2018 07:09

Strong figures

[the ghost who walks] 12/8/2018 16:55

Have you sent your questions to the company?