Eastern European Domino's Pizza franchise roll-out DP Poland (DPP:AIM) is raising £3.2 million from shareholders to speed up store openings.
Shares in DP Poland trade 14.7% higher at 56p on the back of plans announced today to raise new capital via a share issue to institutional investors at 48.625p a share.
The shareholder injection should enable the business to open or franchise 20 more stores than previously indicated, increasing its 2020 store target from 80 to 100. DP Poland operated 29 stores across seven cities in Poland at 30 June 2016.
'The strong financial and KPI performance from the stores reported in the Company's 2016 interim results gives the board comfort that the business model is proven and the confidence to accelerate the roll-out of new stores,' DP Poland chief executive Peter Shaw says.
'The board is extremely pleased with the support that we have received from new and existing investors in this fundraising and we are entirely focussed on delivering our growth strategy and realising the significant opportunity for Domino's Pizza in Poland.'
DP Poland had £5.3 million in net cash, according to interim results published 19 September, an amount that was sufficient to meet the company's existing store opening plan, Shaw says in today's release.
Like-for-like sales, a measure of underlying growth excluding contributions from newly opened stores, increased at double digit percentages in 15 consecutive quarters up to 30 June 2016.
While Shaw did not provide an update on third quarter like-for-like sales, he said the business 'has continued to trade strongly in the third quarter of 2016 and is trading in line with market expectations'.
Proceeds of the equity raise will be used either to open new, corporate-owned stores or to lend money to franchisees to set up franchises.
DP Poland lent a net £164,000 to franchisees in the first half of 2016.