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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dp Poland Plc | LSE:DPP | London | Ordinary Share | GB00B3Q74M51 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 10.50 | 10.00 | 11.00 | 10.60 | 10.50 | 10.50 | 1,580,397 | 08:00:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Eating Places | 35.69M | -4.36M | -0.0061 | -17.21 | 74.81M |
From Apr 2019 to Apr 2024
TIDMDPP
RNS Number : 0156B
DP Poland PLC
18 September 2018
DP Poland plc
("DP Poland" or the "Company")
Interim Results for the half year to 30 June 2018
Continued expansion with a 38% increase in System Sales, 61% increase in corporate store EBITDA and a 39% increase in commissary gross profit.
Financial highlights:
-- 38% increase in System Sales(1) to 37m PLN H1 2018 (27m PLN H1 2017)
-- 15% like-for-like(2) growth in System Sales H1 2018 on H1 2017, adjusting for delivery area splits(3)
-- 61% increase in corporate store EBITDA
-- 39% increase in commissary gross profit(4)
-- Group EBITDA(5) losses widen, impacted as expected by investment in commissary and store operations
Operational highlights:
-- 77% of delivery sales ordered online H1 2018 (73% H1 2017)
-- 5 new stores opened in H1 2018, 1 further opened since the period end
-- 60 stores open to-date, across 27 towns and cities
-- 8 further leases already signed
-- Latest like-for-like System Sales (PLN): July +6% and August +1%, adjusting for delivery area splits, impacted by hot weather and very high comparatives July and August 2017
Peter Shaw, Chief Executive of DP Poland said:
"DP Poland delivered continued expansion and strong growth in System Sales and profit across both corporate stores and commissary during the first half of the year. Pleasingly, this was achieved despite unseasonably hot weather impacting sales expectations as previously reported.
We have expanded the store estate by 11% so far this year and anticipate up to 20% expansion for the year as a whole. The store roll-out is underpinned by our expanded commissary capacity, logistics capabilities and area management, providing a strong platform for the Group's long-term growth plans. We remain convinced by the longer-term growth trajectory of both sales and profit performance, as more stores are opened and as sales continue to grow across the high proportion of currently immature stores.
The Polish food delivery sector continues to grow impressively(6) and we are confident that, underpinned by our well-invested infrastructure and world-renowned service and products, Domino's Pizza in Poland will continue to outperform this growth. The Polish economy's strong fundamentals and the continued expansion of our market supports the growing opportunity for the highly successful and competitively robust Domino's proposition in Poland."
(1) System Sales - total retail sales including sales from corporate and sub-franchised stores, unaudited.
(2) Like-for-like growth in PLN, matching trading periods for the same stores between 1 January and 30 June 2017 and 1 January and 30 June 2018.
(3) When a store's delivery area is split, by opening a second store in its original delivery area, a significant portion of the original store's customer database is allocated to the new store, resulting in the original store losing sales. Calculating pre-split like-for-likes allows us to see sales growth by matched delivery areas, irrespective of the opening of new stores. Pre-split like-for-likes are a standard measure adopted by many major Domino's Pizza master franchisees. See note under Finance Director's Review.
(4) Sales minus variable costs
(5) Excluding non-cash items, non-recurring items and store pre-opening expenses
(6) Source: Euromonitor 2018.
(7) Non-like-for-like stores that are less than 12 months old, with no matching trading periods year on year.
(8) Exchange rate average for H1 2018 GBP1: 4.7988
(9) Exchange rate average for H1 2017 GBP1: 4.9625
Enquiries:
DP Poland PLC Peter Shaw, Chief Executive www.dppoland.com 020 3393 6954 Peel Hunt LLP Adrian Trimmings / George Sellar 020 7418 8900
Notes to editor
DP Poland, through its wholly owned subsidiary DP Polska S.A, has the exclusive right to develop, operate and sub-franchise Domino's Pizza stores in Poland. There are currently 60 Domino's Pizza stores, 34 corporately managed, 2 under management contract and 24 sub-franchised.
Chief Executive's Review
Group performance
System Sales(1) (PLN) increased by 38%. This was driven by continued double-digit like-for-like(2) growth, strong incremental growth from shops that are less than 12 months old, and the contributions from 5 new corporate stores opened during the course of H1 2018.
The Football World Cup had a positive impact on sales in the second half of June, particularly during the Poland games. This partially offset the previously reported negative impact on sales resulting from unusually hot weather between April and June, as evidenced by other markets. Despite this, we saw a significant strengthening in the profit performance of both corporate stores and commissary, driven by growth in sales and a softening in food costs in H1 2018. This resulted in a strong 61% increase in Corporate store EBITDA and a 39% increase in commissary gross profit(4) .
Last year's investments to support the Group's long-term growth, including a second commissary, increased distribution capacity and expanded store support, meant that H1 2018 had a higher cost base than H1 2017. This higher cost base in combination with the lower than anticipated System Sales, and geographic expansion impacting distribution costs, all impacted Group EBITDA(5) performance in H1 2018. We remain convinced by the longer-term growth trajectory of both sales and profit performance, as more stores are opened and as sales continue to grow in the high proportion of currently immature stores. Two thirds of our corporate stores were less than 2 years old at the beginning of the period.
Group EBITDA losses increased by 10% H1 2018 on H1 2017 at constant exchange rates. At actual exchange rates, Group EBITDA losses increased by 12% H1 2018 on H1 2017.
Store performance
System Sales increased 38% H1 on H1 on the back of 15% (pre-split(3) ) like-for-like sales growth, growth from non-like-for-like(7) stores and 5 new store openings. Compound like-for-like sales performance H1 2016-17 was 32%. Corporate store EBITDA increased 61% year on year.
The cost of ingredients, particularly cheese, eased in the first half, benefiting gross profit margins.
Sustained robust growth in the Polish economy continues to add inflationary pressure to labour rates. However, we have seen some easing of staff recruitment and retention pressures, which we believe is down to the fact that we are perceived to be an attractive employer.
Store roll-out
We currently have 60 stores in 27 towns and cities, having expanded the store estate by 11% (6 stores) since the beginning of the year.
Hot Features
Premium
Stores 1 Jan 2018 Opened 30 June 18 Sept
2018 2018
Corporate 30* 5 35* 36*
----------- ------- -------- --------
Sub-franchised 24 0 24 24
----------- ------- -------- --------
Total 54 5 59 60
----------- ------- -------- --------
* 2 corporate stores are run by sub-franchisees under management contract, with the option to acquire and sub-franchise in the future.
We have 8 further store leases signed and a pipeline of more sites under negotiation.
Commissary performance
Our two commissaries are both performing efficiently in the production of dough and the supply of all ingredients and non-food items to pizza stores. The growing commissary revenue line is an increasingly important component of the Group's total revenue and directly reflects growth in System Sales. Commissary gross profit grew 39%, H1 2018 on H1 2017.
The easing of cost pressures on ingredients benefited gross profit margins in the first half, particularly helped by price deflation in the European cheese market, cheese being a key component of the cost of making pizza. We share these cost reductions with our sub-franchisees, always mindful of mutual profitability.
We expect to see some inflationary pressures in the second half with poor agricultural yields, impacting the production of wheat and animal feed and, in turn, flour, dairy and meat prices.
The location of our second commissary in odz, in the centre of the country, is benefiting distribution costs for the 30+ stores that are located to the North, South and West of the country. Our Warsaw commissary continues to supply our busiest stores, in Warsaw, and stores to the East of the country. The two commissaries combined have the capacity to supply up to 150 stores.
Sub-franchising
At the end of this period 24 of our 59 stores were sub-franchised and 2 further stores were managed by sub-franchisees under contract, with the option for them to sub-franchise those stores in the future.
With 44% of the store estate operated by sub-franchisees we are seeing the establishment of successful sub-franchise businesses and the emerging success stories that will attract more potential sub-franchisees to the brand. We are actively marketing our sub-franchise proposition and strengthening our management team with the appropriate franchising experience.
We are in discussions with a number of third parties about sub-franchising Domino's stores, which we expect to bear fruit in 2019.
Marketing and product
We continue to invest in improving our digital presence, including the effectiveness of our existing interfaces and the creation of new ones. The Domino's Bot, launched in Q4 2017, continues to set the pace in online ordering, deployed on the artificial intelligence platform of Facebook Messenger.
77% of all delivery orders were ordered online in H1 2018, up from 73% in H1 2017. We are seeing a growing proportion of online orders made on small screens, presently accounting for 50% of online orders.
The trial of television advertising in January and February, with 2x 2 week bursts, demonstrated the effectiveness of this broadcast medium and we look forward to the time when we will be able to support more regular TV campaigns, justified by the greater sales volumes of an expanded store estate.
We introduced 3 new pizzas in H1 2018, Tex Mex, Americano (pepperoni and mushroom) and Carbonara.
Current Trading and outlook
Our store roll-out continues and we expect to finish the year with the store estate expanded by up to 20% with at least 10 additional corporate stores. As our business matures and the case to sub-franchise becomes stronger still, we expect to attract an increasing number of sub-franchise candidates. We are in discussions with both existing and potential sub-franchisees to open stores and expect to see the sub-franchised estate expand in 2019, if not by the end of 2018.
Food costs have eased from the highs of Q4 2017, with cost deflation through H1 2018. That said, we are beginning to see food cost inflation again in the second half of the year.
We have experienced a continuing period of unusually hot weather through July, August and into September. Hot weather is notorious for impacting sales of delivery food and, in spite of running a campaign of strong promotions, like-for-like sales in July and August 2018 softened on the previous year, at +6% and +1% respectively, pre-split. This was against very strong comparatives of +24% July and +28% August 2017, months which benefitted from an equally strong promotional programme and a cooler summer.
We were delighted to receive our second Gold Franny at the Domino's Worldwide Rally in May, in recognition of our exceptional growth, operational excellence and brand stewardship in 2017.
Poland is arguably the last large high growth market opportunity in Europe, a substantial and stable country of 38 million people that is maturing into a sophisticated consumer economy. The food delivery sector is growing strongly and we are confident that Domino's will continue to outperform, underpinned by the strength of our consumer proposition and the investments we have made in our expansion. We are confident of the long-term sales and profit growth prospects for Domino's Pizza in Poland.
Peter Shaw
Chief Executive
18 September 2018
Finance Director's review
Overview
System Sales grew 38% H1 2018 on H1 2017, driven by continued double digit like-for-like sales growth, robust growth from stores less than 12 months old (excluded from the like-for-like measure) and 5 new store openings. While substantial, sales growth was below our expectations for H1 2018, impacted by the hot summer which saw much higher temperatures than we experienced in 2017.
The inflation in food costs that we experienced in 2017, peaking in Q4 2017, eased in H1 2018, helping with cost of sale in both stores and commissary. We are careful to share the benefits of any reduction in food costs with our sub-franchisees. Looking forward to H2 2018 we are seeing some inflationary pressures on food costs.
Labour cost inflation has stabilised in comparison to the inflationary pressures we experienced in 2017. However the cost of labour is still a challenge, particularly for our younger stores which have less sales to absorb the fixed element of labour.
The 6 new stores opened to-date this year (5 during the period) have all been corporate stores and we are targeting 65 stores open by the year end. The nature of sub-franchised store openings is such that timings are more difficult to predict, but we do expect sub-franchised openings to materialize in 2019.
A note on like-for-like metrics
For this and future sets of results we will present like-for-like sales growth pre-split, as we account for an increasing number of splits across our store estate. When a store's delivery area is split, by opening a second store in its original delivery area, a significant portion of the original store's customer database is allocated to the new store. It is expected that the original store will recover its sales after 2-3 years, but in the meantime its sales will have been reduced. The rationale for splitting is because the combined sales of the two stores will typically outstrip the original store's sales, as customers are better served by faster delivery times. Pre-split like-for-likes measure the sales growth by like-for-like delivery areas, up until the first anniversary of the split, when we can revert to like-for-like store measures. This is a standard approach adopted by many Domino's Pizza master franchisees.
Direct Costs
As previously reported, we extended our commissary capacity in H2 2017 in preparation for the opening of many new stores and the continuing step change growth in System Sales. Our new commissary facility in ód was opened in August 2017 and is now servicing approximately half the store estate, our Warsaw commissary servicing the other half.
In the short term this additional commissary capacity, to service up to 150 stores, has impacted our Direct Costs through additional rent, operating costs, production and warehousing labour. As System Sales grow we will see the impact of these direct costs diminish as the additional capacity is utilised. The higher distribution costs resulting from opening new stores, in new towns and cities, will also become less significant as those costs are spread across a geographically denser estate.
Selling, General and Administrative expenses (S,G&A)
The additional central support required for new store openings adds to S,G&A as we deploy more area managers across the country to oversee store performance, however as more stores are opened the deployment of this additional resource becomes more efficient and the costs are more than matched by greater sales.
The trial television advertising campaign of 2x 2 week bursts in January and February 2018 also impacted S,G&A, being treated as a central investment in building brand awareness and sales, plus visibility to potential sub-franchisees.
Store count
6 stores have been opened to-date this year (5 during the first half), taking the total to 60 stores across 27 towns and cities.
We currently have 8 further leases signed.
The table below sets out our current store estate.
Stores 1 Jan 2018 Opened 30 June 18 Sept
2018 2018
Corporate 30* 5 35* 36*
----------- ------- -------- --------
Sub-franchised 24 0 24 24
----------- ------- -------- --------
Total 54 5 59 60
----------- ------- -------- --------
* 2 corporate stores are run by sub-franchisees under management contracts, with the option to acquire and sub-franchise in the future
Sales Key Performance Indicators
System Sales increased 38% H1 on H1 on the back of 15% (pre-split(3) ) like-for-like sales growth, growth from non-like-for-like(7) stores and 5 new store openings. The pre-split metric will be the standard KPI that we will refer to in the future, in recognition of future delivery area splits, see explanation above: 'A note on like-for-like metrics'.
The compound like-for-like post-split growth over 2 years H1 2017 - H1 2018 was 32%.
Delivery online sales continue to grow, with 77% of all delivery sales ordered online H1 2018 across all stores.
H1 2018 H1 2017 Change %
System Sales PLN 37,158,674 26,856,460 +38%
----------- ----------- ---------
System Sales GBP 7,743,326* 5,596,495* +38%
----------- ----------- ---------
L-F-L(2) system sales PLN +13% +17%
----------- ----------- ---------
Delivery system sales ordered
online +77% +73%
----------- ----------- ---------
*Constant exchange rate of PLN 4.8:GBP1
Like-for-likes in July and August 2018 were 6% and 1% respectively, pre-split, 3% and -2% post-split. The 2017 comparatives were 24% July and 28% August 2017.
Group performance
40% growth of Group Revenue in PLN at constant exchange rates is derivative of 38% growth of System Sales, with no sales of stores to sub-franchisees in H1 2018. 45% growth of Group Revenue at actual exchange rate was due to Sterling weakening relative to the Zloty.
Group Revenue & EBITDA H1 2018 H1 2017 Change
%
------------------------ -------
Revenue PLN 30,687,305 21,845,269 +40%
----------- ----------- -------
Revenue GBP 6,394,787* 4,552,236* +40%
----------- ----------- -------
Group EBITDA GBP (814 086) (742 330) -10%
----------- ----------- -------
*Constant exchange rate of PLN 4.8:GBP1
Group Revenue & EBITDA(7) H1 2018 H1 2017 Change
* %
--------------------------- -------
Revenue PLN 30,687,305 21,845,269 +40%
------------- ------------- -------
Revenue GBP 6,394,787(6) 4,402,069(7) +45%
------------- ------------- -------
Group EBITDA GBP (814 086)(6) (725 190)(7) -12%
------------- ------------- -------
*Actual exchange rates for H1 2018 and H1 2017
Group loss for the period
The Group loss for H1 2018, at actual average exchange rates, increased by GBP26,258 against H1 2017, mainly due to the effect of increases in other non-cash and non-recurring items, depreciation amortization and impairment, plus decreases in foreign exchange gains/(losses) and share based payments.
Group Loss for the period* H1 2018 H1 2017 Change %
Group loss for the period (1,111,082) (1,084,824) -2%
------------ ------------ ---------
* Actual exchange rates for H1 2018 and H1 2017
Exchange rates
PLN : GBP1 H1 2018 H1 2017 Change %
Profit & Loss Account 4.7988 4.9625 -3%
-------- -------- ---------
Balance Sheet 4.9443 4.8178 +3%
-------- -------- ---------
Financial Statements for our Polish subsidiary DP Polska S.A. are denominated in zloties (PLN) and translated to sterling (GBP). Under IFRS the Profit and Loss Account for the Group has been converted from PLN at the average half-a-year exchange rate applicable to PLN against GBP. The balance sheet has been converted from PLN to GBP at the 30 June 2018 exchange rate applicable to PLN against GBP.
Cash position
Cash reduced by 15% during H1 2018, resulting in GBP3.8m net cash on 30 June 2018. Cash expenditure covered Group losses and store CAPEX, offset by some 2018 CAPEX and OPEX pre-paid in 2017.
1 January 2018 Cash movement 30 June 2018
GBP GBP GBP
Cash in bank* 4,505,911 (697,958) 3,807,953
--------------- -------------- -------------
*Actual exchange rates as at 31 Dec 2017 and 30 June 2018
Maciej Jania
Finance Director
18 September 2018
Group Income Statement
for the six months ended
30 June 2018
Unaudited Unaudited Audited
6 months 6 months Year to
to to
30.06.18 30.06.17 31.12.17
Notes GBP GBP GBP
Revenue 2 6,394,787 4,402,069 10,377,777
Direct costs (5,820,464) (3,989,256) (9,658,691)
Selling, general and administrative
expenses - excluding:
store pre-opening expenses, depreciation,
amortisation and share based payments (1,388,409) (1,138,003) (2,503,763)
GROUP EBITDA - excluding non-cash items,
non-recurring items and store pre-opening
expenses (814,086) (725,190) (1,784,677)
------------- -----------------
Store pre-opening
expenses (45,852) (75,685) (143,220)
Other non-cash and non-recurring
items 335,960 (15,230) (12,271)
Finance
income 70,651 50,176 92,638
Finance costs (10,189) (11,799) (24,364)
Foreign exchange gains /
(losses) (21,968) 138,904 148,032
Depreciation, amortisation and
impairment (530,025) (277,572) (656,942)
Share based payments (95,573) (168,428) (253,715)
Loss before
taxation (1,111,082) (1,084,824) (2,634,519)
------------- ---------- ------------- ------------- ----------------- -----------------
Taxation 3 - - -
Loss for the
period (1,111,082) (1,084,824) (2,634,519)
------------- ---------- ------------- ------------- ----------------- -----------------
Loss per (0.80
share Basic 4 (0.74 p) p) (1.85 p)
(0.80
Diluted 4 (0.74 p) p) (1.85 p)
Group
Statement
of comprehensive income
for the six months ended
30 June 2018
Unaudited Unaudited Audited
6 months 6 months Year to
to to
30.06.18 30.06.17 31.12.17
GBP GBP GBP
-------------- ------------- ---------- ------------- ------------- ----------------- -----------------
Loss for the
period (1,111,082) (1,084,824) (2,634,519)
Currency translation
differences (518,905) 471,893 639,428
-----------------------------
Other comprehensive expense for the
period, net of tax to be reclassified
to profit or loss in subsequent periods (518,905) 471,893 639,428
------------------------------------------------------------ ------------- -----------------
Total comprehensive income for
the period (1,629,987) (612,931) (1,995,091)
--------------------------------------------- ------------- ------------- ----------------- -----------------
Group Balance Sheet
at 30 June
2016
Unaudited Unaudited Audited
30.06.18 30.06.17 31.12.17
GBP GBP GBP
------------- ---- -------- -------------- ------------- ------------- ----------------- -----------------
Non-current
assets
Intangible
assets 547,240 574,955 558,438
Property, plant
and
equipment 6,492,012 4,798,907 6,617,788
Trade and other
receivables 1,683,556 1,226,372 1,767,289
------------------- -------- -------------- ------------- ------------- ----------------- -----------------
8,722,808 6,600,234 8,943,515
Current
assets
Inventories 467,158 381,924 525,870
Trade and other
receivables 1,840,189 1,797,190 2,580,994
Cash and cash
equivalents 3,807,953 8,816,108 4,505,911
------------------- -------- -------------- ------------- ------------- ----------------- -----------------
6,115,300 10,995,222 7,612,775
Total assets 14,838,108 17,595,456 16,556,290
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
Current
liabilities
Trade and other
payables (1,551,344) (1,372,134) (1,648,960)
Borrowings (118,965) (122,261) (129,613)
Provisions (31,039) (40,831) (37,289)
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
(1,701,348) (1,535,226) (1,815,862)
------------------ -------- -------------- ------------- ------------- ----------------- -----------------
Non-current
liabilities
Provisions - - -
Borrowings (172,837) (281,279) (243,197)
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
(172,837) (281,279) (243,197)
Total
liabilities (1,874,185) (1,816,505) (2,059,059)
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
Net assets 12,963,923 15,778,951 14,497,231
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
Equity
Called up share
capital 763,860 747,076 762,754
Share premium
account 31,829,463 31,829,988 31,829,463
Capital reserve -
own shares (48,163) (47,688) (48,163)
Retained
earnings (19,515,337) (17,035,895) (18,499,828)
Currency
translation
reserve (65,900) 285,470 453,005
------------------- -------- -------------- ------------- ------------- ----------------- -----------------
Total equity 12,963,923 15,778,951 14,497,231
--------------- -------- -------------- ------------- ------------- ----------------- -----------------
Group Statement of Cash
Flows
for the six months ended
30 June 2018
Unaudited Unaudited Audited
6 months 6 months Year
to to to
30.06.18 30.06.17 31.12.17
GBP GBP GBP
------------- ---- -------- -------------- ------------- ------------- ------------- ---------------------
Cash flows from operating
activities
Loss before taxation for
the period (1,111,082) (1,084,824) (2,634,519)
Adjustments
for:
Finance income (70,651) (50,176) (92,638)
Finance costs 10,189 11,800 24,364
Depreciation and amortisation
and impairment 530,025 277,572 656,942
Share based payments expense 95,573 168,428 253,715
----------------------------- -------------- ------------- ------------- ------------- ---------------------
Operating cash flows before movement
in working capital (545,946) (677,200) (1,792,136)
Change in
inventories 35,039 (89,347) (221,747)
Change in trade and other
receivables 723,051 40,641 (728,558)
Change in trade and other payables
and provisions 143,041 129,238 505,462
---------------------------------------------
Cash provided by / (used
in) operations 355,185 (596,668) (2,236,979)
Taxation - - -
paid
Net cash from operating
activities 355,185 (596,668) (2,236,979)
Cash flows from investing
activities
Payments to
acquire
software (25,131) (38,201) (23,833)
Payments to acquire property,
plant and equipment (1,044,815) (1,887,014) (4,131,753)
Payments to acquire intangible
fixed assets (34,477) (8,464) (26,039)
Lease and other deposits repaid
/ (advanced) - (14,762) (50,396)
Net movement in loans to
sub-franchisees 139,352 4,135 (501,731)
Interest
received 6,776 13,173 92,638
--------------- -------- -------------- ------------- ------------- ------------- ---------------------
Net cash used in investing
activities (958,295) (1,931,133) (4,641,114)
Cash flows from financing
activities
Net proceeds from issue of ordinary
share capital 1,106 4,953,831 5,028,754
Interest paid (9,981) (11,800) (24,364)
--------------- -------- -------------- ------------- ------------- ------------- ---------------------
Net cash from financing
activities (8,875) 4,942,031 5,004,390
Change in cash and cash
equivalents (611,985) 2,414,230 (1,873,703)
Exchange differences on
cash balances (85,973) 93,618 71,354
Cash and cash equivalents at beginning
of period 4,505,911 6,308,260 6,308,260
Cash and cash equivalents at end
of period 3,807,953 8,816,108 4,505,911
--------------------------------------------- ------------- ------------- ------------- ---------------------
Group Statement of Changes
in Equity
for the six months ended 30
June 2018
Share Currency Capital
Share premium Retained translation reserve
-
capital account earnings reserve own shares Total
GBP GBP GBP GBP GBP GBP
---------------- ------------ -------------- ------------- ------------- ------------- ------ ----------------
At 31 December
2016 684,576 26,878,887 (16,116,724) (186,423) (50,463) 11,209,853
Shares issued 62,500 5,185,000 - - - 5,247,500
Expenses of
share
issue - (233,899) - - - (233,899)
Share based
payments - - 168,428 - - 168,428
Shares
transferred
out of EBT - - (2,775) - 2,775 -
Translation
difference - - - 471,893 - 471,893
Loss for the
period - - (1,084,824) - - (1,084,824)
---------------- ------------ -------------- ------------- ------------- ------------- --------------------
At 30 June 2017 747,076 31,829,988 (17,035,895) 285,470 (47,688) 15,778,951
Shares issued 15,678 - - - - 15,678
Expenses of
share
issue - (525) - - - (525)
Share based
payments - - 85,287 - - 85,287
Shares
transferred
out of EBT - - 475 - (475) -
Translation
difference - - - 167,535 - 167,535
Loss for the
period - - (1,549,695) - - (1,549,695)
---------------- ------------ -------------- ------------- ------------- ------------- --------------------
At 31 December
2017 762,754 31,829,463 (18,499,828) 453,005 (48,163) 14,497,231
Shares issued 1,106 - - - - 1,106
Share based
payments - - 95,573 - - 95,573
Translation
difference - - - (518,905) - (518,905)
Loss for the
period - - (1,111,082) - - (1,111,082)
At 30 June 2018 763,860 31,829,463 (19,515,337) (65,900) (48,163) 12,963,923
---------------- ------------ -------------- ------------- ------------- ------------- --------------------
Notes to the Interim Financial Statements
for the six months ended 30 June
2018
1 Basis of preparation
These condensed interim financial statements are unaudited and
do not constitute statutory accounts within the meaning of the
Companies Act 2006. These condensed interim financial statements
have been prepared in accordance with IAS 34 'Interim Financial
Reporting' and were approved on behalf of the Board by the Chief
Executive Officer Peter Shaw.
The accounting policies and methods of computation applied in
these condensed interim financial statements are consistent with
those applied in the Group's most recent annual financial statements
for the year ended 31 December 2017 apart from new accounting
standards; IFRS 15 'Revenues' and IFRS 9 'Financial Instruments'
which were adopted by the Group on 01 January 2018.
IFRS 15 - Revenue from Contracts with Customers, has replaced
all existing revenue requirements in IFRS and applies to all
revenue arising from contracts with customers unless the contracts
are within the scope of other standards. The new standard establishes
a five-step model to account for revenue arising from contracts
with customers. Under IFRS 15, revenue is recognised at an amount
that reflects the consideration to which an entity expects to
be entitled in exchange for transferring goods or services to
a customer. The standard has an effective date of 1 January 2018.
The Group has applied the standard using the modified retrospective
method in accordance with paragraph C3 (b) of the standard, requiring
any cumulative impact to be recognised as an adjustment to the
opening balances within equity.
The Group's revenues that are applicable for IFRS 15 are corporate
store sales, royalties, franchisee fees and sales to franchisees.
The Group has performed the five-step model on each of these
elements, identifying the contracts, the performance obligations,
transaction price and then allocating this to determine the timing
of revenue recognition. For each of these there is no impact
on the timing of transfer of control and therefore no impact
on the timing of recognition of revenue.
The Group's profit before tax remains unchanged and no adjustments
to any line items have been made to the opening balances within
equity.
Rental income on leasehold and freehold property falls outside
of the scope of IFRS 15.
IFRS 9 - Financial Instruments, has replaced IAS 39 Financial
Instruments: Recognition and Measurement, covering the classification,
measurement and derecognition of financial assets and financial
liabilities, together with a new hedge accounting model and the
new expected credit loss model for calculating impairment. The
standard has an effective date of 1 January 2018.
The new standard has had the following effects on the Group's
financial statements:
The Group's impairment provision on financial assets measured
at amortised cost (such as trade and other receivables) have
been calculated in accordance with IFRS 9's expected credit loss
model, which differs from the incurred loss model previously
required by IAS 39. The Group's history of low credit losses
as a result of franchisee profitability, security held in respect
of loans to franchisees and corporate store sales being on a
cash basis has resulted in no change to the provision value previously
recorded and there is no change to the opening balances within
equity.
The Group has chosen not to restate comparatives on adoption
of IFRS 9 and, therefore, any changes would have been processed
at the date of initial application and presented in the statement
of changes in equity for the six months to 30 June 2018.
The financial statements for the year ended 31 December 2017,
which were prepared in accordance with International Financial
Reporting Standards, as endorsed by the European Union ('IFRS'),
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS, have been delivered to the Registrar
of Companies. The auditors' opinion on those financial statements
was unqualified and did not contain a statement made under s498(2)
or (3) of the Companies Act 2006.
Copies of these condensed interim financial statements and the
Group's most recent annual financial statements are available
on request by writing to the Company Secretary at our registered
office DP Poland plc, Elder House, St Georges Business Park,
207 Brooklands Road, Weybridge, Surrey KT13 0TS, or from our
website www.dppoland.com.
2 Revenue
Unaudited Unaudited Audited
6 months 6 months Year to
to to
30.06.18 30.06.17 31.12.17
GBP GBP GBP
================================================= ============ ============ ============
Core revenue 6,349,950 4,250,526 9,663,088
Other revenue 44,837 151,543 714,689
6,394,787 4,402,069 10,377,777
------------------------------------------------- ------------ ------------ ------------
Core revenues are ongoing revenues including sales to the public
from corporate stores, sales of materials and services to sub-franchisees,
royalties received from sub-franchisees and rents received from
sub-franchisees. Other revenues are non-recurring transactions such
as the sale of stores, fittings and equipment to sub-franchisees.
3 Taxation
Unaudited Unaudited Audited
6 months 6 months Year to
to to
30.06.18 30.06.17 31.12.17
GBP GBP GBP
================================================= ============ ============ ============
Current tax - - -
Deferred tax charge relating to the
origination and reversal
of temporary - - -
differences
-------------------------------------------------
Total tax charge in - - -
income statement
-------------------------------------------------- ------------ ------------ ------------
4 Earnings per ordinary
share
The loss per ordinary share has been calculated
as follows:
Unaudited Unaudited Audited
6 months 6 months Year to
to to
30.06.18 30.06.17 31.12.17
------------------------------------------------- ------------ ------------ ------------
Profit / (loss) after
tax (GBP) (1,111,082) (1,084,824) (2,634,519)
Weighted average number of shares
in issue 150,106,962 136,069,649 142,164,031
Basic and diluted earnings per share (0.74 (0.80 (1.85
(pence) p) p) p)
---------------------------------------------------- ------------ ------------ ------------
The weighted average number of shares for the period excludes those
shares in the Company held by the employee benefit trust. At 30
June 2018 the basic and diluted loss per share is the same, because
the vesting of share awards would reduce the loss per share and
is, therefore, anti-dilutive.
5 Principal risks and uncertainties
The principal risks and uncertainties facing the Group are disclosed
in the Group's financial statements for the year ended 31 December
2017, available from www.dppoland.com and remain unchanged.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR SFWFLWFASEEU
(END) Dow Jones Newswires
September 18, 2018 02:00 ET (06:00 GMT)
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