Encouraging headline numbers from Domino’s Pizza (DOM) franchise DP Poland (DPP:AIM) send shares in the £22.6 million cap 2.9% higher to 17.9p, but Shares remains sceptical.

The pizza delivery company grew like-for-like gross profit (sales minus food costs) by 27% in the first half with like-for-like system sales up 15.8%.

Its store EBITDA (earnings before interest, tax, depreciation and amortisation) is improving with its top three stores delivering an average of £26,000 in the first half of 2015 compared with £7,500 a year earlier.

DP POLAND - Comparison Line Chart (Rebased to first)

The group says there are ‘significant’ new store openings in the pipeline for the fourth quarter.

Last month DP Poland announced plans to raise £5.5 million to help fund the opening of 20 corporately-owned stores outside of Warsaw and Krakow in Poland in 2016/17. Chief executive Peter Shaw told Shares this could widen its overall losses in the short-term as it absorbs the openings costs and initial losses of the new stores.

The comments came after chairman Nicholas Donaldson said in a final results statement on 23 March that reaching group profitability would be ‘a long journey’.

Although DP Poland’s stores in Warsaw are finally in the black it has taken a long time to achieve this, and progress could be even slower in new stores in other parts of Poland where the Domino’s brand hasn’t yet been established.

Issue Date: 20 Jul 2015