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...
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...
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.
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
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