DP Poland plc
("DP Poland" or "the Group")
Change to full year results date and COVID-19 update
Delay to full year results due to FCA moratorium
DPP announces that, whilst the Board had declared an intention to announce the Group's audited results for the year ended 31 December 2019 on 31 March 2020, it has decided to delay the announcement after considering guidance recently issued by the Financial Conduct Authority and the Financial Reporting Council. The Board has also discussed this matter with the Group's advisers.
The original reporting date falls within the two-week moratorium recommended by both bodies and the Group will, therefore, report no earlier than 6 April 2020. We are choosing not to set a revised announcement date at this time, mindful that any new commitment could be impacted by further regulatory guidance. We will commit to a new date as soon as the regulatory background becomes clearer.
In line with our announcement on 7 February 2020, the Board expects to report full year results for the year ended 31 December 2019 in line with management expectations: System Sales up 13% to approximately PLN 81m and 3% like-for-like growth in System Sales 2019 over 2018. Cash at bank as at 31 December 2019 was £3.6m; control of cash and costs remain key areas of focus for the Group.
Given the delay to the audited full year results and the increased uncertainty created by the spread of COVID-19, the Group today provides an update on its operational response, current trading and outlook.
COVID-19 response, current trading and outlook
Trading in 2020 started broadly in line with management's expectations for the full year, with only minimal impact from COVID-19 in the first two months of 2020.
With effect from Saturday, 14 March 2020, the Polish government imposed similar 'lock down' restrictions to those now prevailing in the UK, including confining people to their homes except for essential activities (including food shopping, dog-walking, going to work and taking care of elderly relatives). While, as part of these restrictions, all restaurants, clubs, bars, and cafes are closed to the public, restaurants are permitted to provide food deliveries. Other public spaces such as gyms, swimming pools, museums, libraries, cinemas and theatres are also all closed.
We have appointed a senior, fully dedicated COVID-19 team, which is focused on this crisis all day and every day. We are following the advice of government and health authorities to ensure that our stores can continue to operate safely and deliver delicious pizzas to our customers.
DPP therefore continues to trade, making deliveries from all of its 69 stores. The Group's high level of online ordering of delivery sales (82% in 2019), which supports online payment for food orders, is proving attractive to customers in the prevailing environment. In addition we have introduced a Contactless Delivery and Contactless Carry-out process for customers, which have been well received. Eat In dining has stopped altogether for the present.
Meanwhile, we are currently seeing reductions in the cost of ingredients, particularly in cheese - a key component of most pizzas. In addition, in recent weeks the recruitment market has improved markedly for us.
Our first priority is the health and wellbeing of our people. We follow the health and safety recommendations of the local and national authorities in Poland.
Overall, the situation is changing rapidly, and it is difficult to foresee the potential impact on our business and the further threats and opportunities that may await us. As such, there is little visibility on the potential full year outcome for our 2020 Financial Year at this time. However, for so long as we are permitted to continue to sell and deliver great pizzas to our customers we believe that we are well placed to trade relatively well during the lock down. Nevertheless, we cannot anticipate how our customers might react to circumstances, which change almost daily.
Thanks to the strength of the Domino's brand and its reputation for quality of food and service, however, the Board is confident of being well positioned for growth and the long-term success of the business.
Iwona Olbrys, CEO, commented:
"Our first priority is to do all we can to support responsibly the global efforts to control the spread of COVID-19, and to safeguard our employees and our customers.
Since arriving at DPP in late September 2019, I have been impressed by the loyalty, skill and commitment of our team. Our competitors rightly regard DPP as a tightly run, high quality operation.
The Coronavirus presents our industry - and business in general in Poland and around the world - with some major obstacles. Nevertheless, I believe that the Domino's brand, and its reputation for quality of product and service, put us in a good position: much of our competition would love to have such a reputation. We continue to deliver to our customers delicious, hot pizzas, typically within 30 minutes from order.
In light of the Coronavirus concerns, we now offer contact free delivery and carry out. We continue to create new initiatives and seek to adapt to the 'new world'.
Our customers order their pizzas increasingly on our digital platforms, and pay for their orders on that platform too. In Poland we are possibly 'best in class' on this front.
Whilst the outlook for the world at present is uncertain, in this new world I believe that DPP occupies an important position in the Polish Food & Beverage industry."
Enquiries:
DP Poland PLC 020 3393 6954
Nick Donaldson, Non-Executive Chairman
Iwona Olbryś, CEO
Peel Hunt LLP 020 7418 8900
Adrian Trimmings
Andrew Clark
