DP Poland PLC
("DP Poland" or the "Company")
Sale and sub-franchising of stores
DP Poland, through its wholly-owned subsidiary DP Polska S.A. ("DP Polska"), has the exclusive right to develop and operate Domino's Pizza stores in Poland.
DP Poland is pleased to announce the sale and sub-franchising of 5 corporately managed stores in Warsaw, marking a significant step in the evolution of its business.
Jakub Stepien, the Company's first sub-franchisee, has agreed to acquire and sub-franchise 3 additional corporately managed stores through Rush Hour Pizza Polska sp. z o.o ("Rush Hour Pizza"), an entity backed by Working Capital Management PTE Ltd ("WCM"), a Singapore-based investment manager.
Concurrently, Rush Hour Pizza will acquire Jakub's existing store. Jakub has become a shareholder in Rush Hour Pizza and will take on responsibility for driving growth and profitability at Rush Hour Pizza.
As part of the transaction with Rush Hour Pizza, DP Poland has entered into an agreement with WCM, Rush Hour Pizza's majority shareholder, which gives WCM the right to subscribe for up to 9.99% of the enlarged issued share capital of DP Poland in the event of a future equity fundraise by DP Poland. The period of this agreement is for 3 years and includes a provision not to acquire shares in DP Poland before the pre-emption right is taken up without DP Poland's consent.
Separately, HLM Group has also entered into an agreement with DP Polska to acquire and sub-franchise 2 of DP Polska's corporate stores in Warsaw. HLM Group is owned and managed by 2 of DP Polska's former Area Managers, Paweł Muszyński and Wojciech Juchniewicz.
For the six month period ended 30 June 2014 the 5 corporate stores being sold recorded an EBITDA loss of PLN143,059 equivalent to £27,996, at an exchange rate of PLN5.11:£1. Total consideration payable to DP Poland for the transactions is PLN2.94m, equivalent to £575,734 at an exchange rate of PLN5.11:£1, including payment of the outstanding loan for Jakub Stepien's sub-franchised store. Proceeds from the transactions will be settled in cash and used to fund the working capital of the Company. Following the above transactions, DP Poland will have 13 corporate stores in Warsaw and Krakow and 6 sub-franchised stores in Warsaw.
Peter Shaw, Chief Executive of DP Poland said:
"This is an important moment for Domino's Pizza in Poland as we extend our sub-franchisee base with highly experienced local Domino's managers. When we started on this journey we recruited our first managers with the view that they might become franchisees, I am delighted that this is now becoming a reality. I am equally delighted that we are able to attract well-funded franchise partners with the appetite and potential to open and acquire many more stores in the future."
Jakub Stepien, Executive Director of Rush Hour Pizza, added:
"Our first Domino's Pizza store in Poland has been a success. This transaction allows Rush Hour Pizza to reach meaningful scale on an accelerated time table. We hope this acquisition of corporate stores paves the way to future growth. Our team looks forward to becoming a strong franchise partner for Domino's Pizza in Poland."
Pawel Muszyński, partner in HLM Group, added:
"We have been a part of the Domino's story in Poland since the first store opened and we are very excited to be establishing our sub-franchise business with 2 stores in Warsaw. Our plans are to add a number of stores in the future."
DP Poland Peter Shaw, Chief Executive www.dppoland.com |
020 3393 6954 |
Peel Hunt LLP Dan Webster/ Richard Brown |
020 7418 8900 |
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