San_Jaime
25 Feb 2019
Another dilution.... Sorry last line of placings wrong year, should have read : FEBRUARY 2019 placing 6p SJ
San_Jaime
21 Feb 2019
Another dilution.... Just looked back here at the history of DPP and need for placings for cash to expand the business in Poland. IPO 50p FIRST PLACING 35P SECOND PLACING 15P Feb 2018 placing 6p Luckily a volatile share and managed to get in and out at a profit each time. Now trying again at single figures. SJ
San_Jaime
13 Feb 2019
How do you analyse this stock? Having sold DPP a long time ago when it hit over 50p I have been watching this stock ever since. Met a Polish friend yesterday and discussed the decline of Domino’s share price down to single figures and he also could not believe the current price. So had a small punt today at 8.38p to see how soon we can hit the teens again. (or maybe a rise due to a takeover by DOM or DPEU ?) I remember the old discussion board days here when guys who bought when it last declined to about 15p were raving when it had trebled - luckily I had averaged down to the mid twenties and fortunately sold at a nice profit. Will we have a repeat of these good old days ? SJ
Lagav16
14 Apr 2018
Re: How do you analyse this stock? Looks good to me - very marginal increase in losses despite large number of new openings, the majority of which should become profitable in the next year or so on past form. TBH, I'd have expected a larger loss, which implies good profitability from more mature stores and, as long as they don't over-expand and keep focussed on profit, rather than turnover, I expect a good return in the 3-5yr period.
long term hold
27 Mar 2018
Re: How do you analyse this stock? Also, surprised lfl’s were not higher in jan and Feb after they also introduced tv advertising which they claimed had gone very w
cosmos
27 Mar 2018
NB2: What I can't understand is why DOM UK, which seems to be struggling to deploy capital sensibly right now doesn't just take DPP out at today's modest valuation. The hard work has been done. Inflection is close and all that's needed to finish the job is some additional capital to accelerate the store roll out and press the pedal to the metal on marketing. Now that would be a crying shame despite the upfront premium...
cosmos
27 Mar 2018
NB: If all that sounded a bit bearish nothing could be further from my mind. Assuming they hit 100 stores by end of 2020 at which point 75% of the estate is close to mature i.e. £0.1m EBITDA pa. That's £7.5m of EBITDA x a multiple of 20 as per DPEU would suggest a EV of £150m. Sure there will be some small dilution to investors from the interim placing. But that's still significant upside from today. And more importantly takes no account of the "hope" value of self-financing continued expansion at that point, which Mr Market will also factor in. So I would argue tuck in at these levels. And leave. I can't imagine (barring WWIII with Russia) there will be a much better opportunity than today's level. Just a shame that Rome was not built in a day...
cosmos
27 Mar 2018
But until the placing is out of the way (and crucially we have the associated price signal i.e. what price is needed to attract institutional funding), and further evidence of sales / EBITDA success outside Warsaw I expect the shares to tread water.
cosmos
27 Mar 2018
I think the biggest positive of today's announcement was that their most mature stores are delivering higher sales and EBITDA than their original "mature store" model predicted. If non-Warsaw stores can eventually follow this path then that is massive for future value. But I agree with you coffe911 that the capex lighter franchise led roll-out seems to be taking a back seat pending a more mature estate. This means higher upfront capex. With available cash of £4.5m and likely 2018 burn at a similar level (I'm assuming the new commissary spiked spend last year) then another placing is clearly coming in the next [6] months. Hopefully that should take them to c. 85 stores by end of 2019 and operating cash flow break even as the estate matures
coffe911
27 Mar 2018
Re: How do you analyse this stock? All sounds very positive but a worry that they aren't getting enough new franchisees. New store sales seem to ramp up but start very slow which makes it tough for smaller operators, particularly outside Warsaw & other large cities. The big question is: will they turn-around the shortfall of new franchisees ?
cosmos
11 Jan 2018
Part 2. Now of course the below is all super crude as it assumes no time value of money effect, that DPP can get from 50 to 150 stores with minimal third party capital i.e. cash flow break-even is round the corner and many of the new stores will be franchisee owned rather than corporate (which of course also changes the economics), that all stores are able to hit PLN 500K, etc, etc. However, there is also a scenario that DPP are eventually able to roll-out more than 150 stores. This is not that far-fetched given DOM UK has north of 850 stores in an area with a population less than double Poland's. Also Polish GDP has been rising and the take-out culture has been growing with it. Hence there are significant upside risks. Imagine LT DPP can get to 300 stores. Suddenly you have a company that even at 10x EBITDA is £300m i.e. 5 times today. Anyways, that's very roughly how I think about DPP and why I see it as a core LT hold...
cosmos
11 Jan 2018
Re: How do you analyse this stock? One back of the envelope method is to look at annual store EBITDA at maturity. In 2016 the most mature store had an annual EBITDA of PLN 536K i.e. roughly GBP100K. Assuming no further growth in store numbers and the whole estate hitting this target (nb: Peel Hunt, for example, are estimating PLN 500K as a sensible figure across the estate). You get to £5m. Apply a 10x EBITDA multiple and you have £50m i.e. a little south of the current valuation. But now imagine that DPP gets to their target number of 150 stores and apply not a 10x multiple but 15x, which is where DOM UK is still trading in its mature stage, de-rated state. So £15m & 15 equals £225m i.e. 3x upside from here
seadoc
06 Jan 2018
Re: How do you analyse this stock? coffe,Most shorts now closed out (and it was one of top shorted AIM shares) so you are not alone in your views. Market cap is high, and I sold 1/3 of mine a couple years back (having bought at 9p and got to be over 15% of portfolio) but DPP remains are a strong hold for me. I got into DOM when it moved to main market and at the time it seemed pricey and thought that I may have been late to the party but over ten years it is my highest annual return.Do you have any Polish friends? I am now retired from NHS but worked with some brilliant colleagues from Poland, they never turned down a pizza from DOM and most planned to return on retirement and that would be soon.DPP could fly, needs patience, still loss making so NOT low risk but remains in top 5 holdings.Regards,Seadoc
coffe911
05 Jan 2018
How do you analyse this stock? On paper this looks a great business with a great company, but I wonder how one should sensibly value it? The management team have been there and done that in Poland and the business model is tried and tested. They are growing at a sensible rate so you have to think that medium term the future looks very positive. The infrastructure is in place, etc. etc. I guess one of the risks is that they need more fixed cap-ex to sustain growth and this is required before earnings kick in. I'm no analyst but a market cap north of £60m looks very high. That's over £1m per franchised store so one has to factor in an awful lot more stores or a buyer coming along mid-point in the story, which is what the management will be looking for in 2-3 years. If they can start to grow organically at over 100 stores then it might all fly. As they grow the value of their own stores should rise and they can convert these to cash and reduce the threat of further dilution. Looks a low risk play, but needs patience. Thoughts?
cosmos
02 Dec 2017
That's the $64,000 question. My suspicions would be 1. unease / impatience over the timing of cash flow break even, and 2. Erroneous read across by investors from the recent travails of DOM UK to the LT attractiveness of the DOM model / brand. The market is by definition an impatient beast so an early stage, high upfront investment company, such as DPP, is always liable to be volatile / try the market's patience until such time as it achieves "sustainability" i.e. cash flow break even. For what its worth the only way I think one can approach the investment case here is on an ultra long term basis. Hence, ignore the day to day share price drift (annoying as it is) and just focus on the operating fundamentals. And here management appear to be delivering. Moreover, there is comfort from the recent performance of DP Eurasia. The Dominos model has worked across various socio-economic models and income levels i.e. in Turkey, Russia, US, UK, Australia. I have no doubt that we will get there in Poland too. The inflection when it comes (i.e. when market realises we are close to cash flow break even) will cause a rapid re-rating of the share price. One can take the view, as many impatient investors who are pressuring the share price, that one can just jump back in then and redeploy capital in the interim. Given the relative illiquidity of the share that won't be easy. I prefer to stay invested here and just ignore the day to day flux. The turn will come here. And perhaps as early as H2 18.
