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Mon 27th Mar 2017 - Domino’s Poland reports like-for-like system sales increase 27%
Domino’s Poland reports like-for-like system sales increase 27%, expects to cross 50 store mark this year: Domino’s Pizza Poland has reported like-for-like system sales increased 27% for the year ending 31 December 2016 and expects to cross the 50 store mark this year. The company has seen 17 consecutive quarters of double-digit like-for-like system sales growth. Domino’s Pizza Poland has the exclusive right to develop, operate and franchise Domino’s Pizza stores in Poland. It currently operates 39 stores – 16 corporate stores and franchises 23 stores – in 14 Polish cities. System sales were up 62% to £7.22m in 2016 versus £4.44m in the previous year. Group Ebitda losses marginally reduced to £1.58m in 2016 compared with 1.63m the previous year. Like-for-like system sales in January and February 2017 have increased double-digit and March like-for-likes are on track to be 20%-plus. Total corporate store Ebitda was up 76% to £329,000. Top three corporate stores averaged £88,000 Ebitda each in 2016 versus £58,000 each in 2015. The top corporate store delivered Ebitda of £100,000 in 2016. The company has opened four stores this year with six stores currently under construction. Domino’s Pizza Poland chief executive Peter Shaw said: “Our accelerated store roll-out plan and strong like-for-like performance drove sales volume and improved contributions from corporate stores and commissary. We will continue to drive sales volume growth through 2017 and anticipate group Ebitda losses further reduced for year ending 2017. During 2017 we expect to cross the 50 store mark, which will be a key milestone for Domino’s Pizza in Poland, as we extend our footprint and seek further economies of scale in this market of 38.5 million people.” Chairman Nicholas Donaldson added: “2016 was a year of robust system sales growth, driven by strong like-for-likes and the roll-out of new stores to more towns and cities. This growth in system sales enhanced both store Ebitda and commissary gross profit, albeit in the context of a marginally reduced group Ebitda loss. The growth in commissary gross profit is particularly driven by the addition of new sub-franchised stores and the growth in sub-franchised store sales, through the provision of dough balls, ingredients, boxes and other items to sub-franchisees, plus sales royalties. Today we have eight sub-franchise partners, six more than we had this time last year and we expect to welcome more in the coming year. The addition of more sub-franchisees is further confirmation of the potential of the Polish market, as more individuals commit to building their own Domino’s businesses in a country of 38.5 million people. Today over half of our estate is sub-franchised, compared to less than one third this time last year. The mix of corporately managed and sub-franchised stores will vary as we build out over the coming years, but we expect sub-franchised stores to be a key growth engine in the medium to longer term. Our most mature corporate stores continue to deliver robust growth, alongside our newer stores, with both sales and store Ebitda significantly ahead in 2016 over 2015. The growing traction of the Domino’s brand in Poland is founded on the satisfaction of a loyal and growing customer base at each store, through our offer of great service, great product and great value. While expansion requires resource, with strengthened real estate and store opening teams and extended commissary capacity, the growing store contribution to marketing and the economies of scale in procurement will further strengthen the positive feedback cycle inherent to revenue growth. As we progress through this growth phase, to establish a national presence, we expect the reduction in group Ebitda losses, compared with the growth in revenues, to rebalance as we approach critical mass in stores numbers and system sales. With that rebalancing there will come an inflection point when the relative costs of running a high growth business steadily reduce in proportion to the growth in revenues and improvements in group Ebitda. Our fund-raising of £3.2m gross in October 2016 was strongly supported by our investors and enables us to maintain the pace in the opening of corporate stores and in certain cases to support our own managers, through loans, to acquire their own stores. Supporting in-house talent in this way is a success model that is tried and tested across the Domino’s system worldwide, in tandem with encouraging and supporting third parties to sub-franchise the Domino’s brand. The opportunity for Domino’s in Poland is founded on the size of the population – the eighth largest in Europe – and the evident appetite for the Domino’s offer of high quality pizza, delivered fast and hot to the door. Delivering against that opportunity requires a mix of careful management, energy and determination that I believe is ably demonstrated by our team; I would like to take this opportunity to thank both them and our sub-franchisees for delivering a strong performance in 2016. In 2017 we remain focused on building out the store estate to achieve critical mass and to establish Domino’s Pizza as a national brand in Poland.”
BrewDog accused of hypocrisy after forcing pub to change name: Scottish brewer and retailer BrewDog, which prides itself on a “punk” ethos, has been accused of hypocrisy after forcing a family-run pub to change its name or face legal action. BrewDog, which has burnished its underdog credentials with vocal criticism of how major brewers operate, recently launched a vodka brand called Lone Wolf. But it threatened legal action against a pub in Birmingham that opened under the same name, prompting allegations of bullying and hypocrisy. The brother and sister team behind the pub, Joshua and Sallie McFadyen, said they chose the name in 2015, before BrewDog unveiled its spirits brand. But they say they were too scared of the brewer’s financial muscle to fight back, deciding instead to change the name of their pub to the Wolf and adjust the signage and webpage at their own expense. Sallie McFadyen told the Guardian: “It’s devastating because it was quite personal why we called it Lone Wolf. We’ve come round to it now but it is a bit hypocritical because they make a lot of public statements saying how much they support independence and they don’t like a big corporate attitude. It seems to go against what they stand for and it was done in such a harsh way.” She said she and her brother chose the name the Lone Wolf because they had both previously worked for major pub companies and had decided to go it alone. They were also inspired by Sally’s dog, which “looks like a wolf”, echoing BrewDog’s own name, which is based on co-founder James Watt’s dog. The company’s protection of its trademark is particularly surprising given its founders have previously scorned copyright complaints against them. Last year the company disputed a trademarking claim from the estate of Elvis Presley, which took issue with BrewDog’s Elvis Juice beer. BrewDog was also told it might face legal action from Wolverhampton Wanderers football club over claims that the branding for Lone Wolf is similar to the club’s own wolf’s head logo. The company recently told its Equity for Punks shareholders that it is in talks with a major new investor, amid speculation that it is preparing to float some of its shares on the stock market.

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