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.
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?
These Scandinavia countries franchises are nothing to do with DPP.
As you say DPP is a separate Domino's company operating in Poland, listed in London.
This week Domino's Pizza Group (DOM) announced expansion of their Norway business by integrating the established Norwegian Dolly Dimple's business into their operations in Norway.
In the past there has been speculation that DOM may take over DPP, however this remains pure speculation....
As an aside DOM took a peak 15% drop down hit this week - after publishing excellent results, but some brokers talked down the stock due to slower growth figures. I took advantage of this drop by selling some DPP at 53.5 and buying DOM at 333.3 since this share is pretty flat at the moment.
Have investments in DOM, DPP, JE and FRAN which have all made me money - DYOR.
Yes, the placing price is very encouraging athough, in terms of financial performance, this is still a jam (or should I say tomato topping) tomorrow situation. I originally invested a small amount at less than half the current price because the basic business model was proven and all the numbers were moving in the right direction and I think the modern Polish culture is quite entrepreneurial. I expect to be a long term holder, but it is early days yet.
A month ago the company were talking about 29 stores with 4 to open. Now with this new cash (and shares) it's another 20 stores, with the talk of 100 by 2020.
One hour into trading and a half million shares traded, and up 17%. It seems folks want to hang onto the shares they have, and others want in, so up goes the price.
I'm in for the long term.
Agreed. Very strong numbers. No following from broker community right now. They are getting close to break even and are not burning much cash. 2017 looks like the inflection year after which earnings should accelerate. Very exciting opportunity. Look back at dominos uk from its early days to see the enormous potential. This is valued at a tiny fraction of that.
Did not appear by close of play. Hargreave announced holding crossed the 17% threshold but reading the RNS carefully, (like I should have done in the first place) that was in a downward direction, they reported that they no longer held more than 17%. I clearly missed the RNS announcing that at some point they held more than 17%.
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