27 March
2024
LEI: 213800Q6ZKHAOV48JL75
This
announcement contains Inside Information
Domino's Pizza Group
Plc
£11 million investment in DP
Poland Plc to support growth opportunities
Domino's Pizza Group plc ("DPG" or the "Company") is pleased to announce that
it has agreed to invest £11 million in DP Poland plc ("DPP") to
support growth opportunities across DPP's business (the
"Investment").
DPP, an AIM listed company, operates 111
Domino's Pizza stores and restaurants in Poland and a further five
in Croatia.
The Investment will be executed via
a primary issuance of ordinary shares by DPP. The Investment is one
component of a broader fund raising to raise approximately £20.5
million that was announced by DPP today (the "Fundraise"). The
Investment will be executed at a price of 9.92 pence per share,
representing a 23.1% discount to DPP's closing price on 26 March
2024. Following completion of the Investment, and assuming the full
£20.5 million is raised, the Company will own approximately 12.1%
of DPP's issued share capital. The Investment is conditional on the
approval of DPP shareholders and will be
funded out of DPG's free cash flow at completion. Following completion, DPG will have the right to appoint one
representative to the DPP Board.
The proceeds from the Fundraise will
be used to further accelerate DPP's growth by leveraging its
organic sales expansion with store rollouts and potential
acquisition opportunities. The Board of DPP estimates the market
potential of Poland to be approximately 500 Domino's stores by
2030.
Alongside the Investment, the
Company has entered into an option agreement to have the ability to
purchase additional ordinary shares at a future date from Malaccan
Holdings Limited up to a maximum total position of 29.99% of DPP's
issued share capital including ordinary shares held by DPG and
DPG's concert parties[1].
Following DPG's recently announced
growth framework, DPG has been working at pace, and with
discipline, to assess select value enhancing opportunities to build
a larger and more cash generative business. The Board has been
clear that any investment in international markets must fall within
rigorous and disciplined guardrails and have the potential to
create meaningful long-term shareholder value.
DPG highlighted investing in
international markets underpinned by strong and profitable growth
drivers, such as the Investment, as an opportunity to create value.
The current management of DPG has deep experience, with enhanced
capability both within the team and at the Board level, of
operating and delivering profitable, international growth. DPG's
CEO Andrew Rennie has extensive international experience and a
proven track record as CEO of Domino's Pizza Enterprises (DPE)
France and Belgium from 2006 to 2010, and CEO of DPE's broader
European business from 2014 to 2020, which included France, Germany
and the Netherlands. In addition, prior to his appointment at DPG,
Andrew was a non-executive Director of DPP where he played an
important role in appointing DPP's current CEO Nils Gornall, which
the Board considers highly beneficial to DPG. Andrew
continues to hold shares in DPP which were acquired during his time
as a Director of DPP. Nils Gornall is a veteran of Domino's with
nearly 30 years of operating and management experience. Under
Nils's leadership, DPP grew like-for-like System Sales in 2023 by
19.7% in Poland.
The Investment represents a unique
opportunity to re-enter international markets in a disciplined,
capital-light manner, and in partnership with a high-performing
business, operated by an experienced management team. DPP's markets
are high growth, and significantly underpenetrated. Stoffel
Thijs[2], who
recently joined DPG, will represent the Company on the Board of
DPP. Stoffel has worked within the Domino's systems for 25 years
and has a proven track record in Europe.
Andrew Rennie, DPG Chief Executive
Officer, said:
"I'm delighted to be partnering with DPP as we continue to
execute against our new growth plan. DPP is a fantastic business
with a significant growth opportunity ahead of it. Whilst the
Domino's brand is strong in Poland and Croatia, both markets are
significantly underpenetrated with a unique store opening and
profitability opportunity."
"We have strong guardrails in place as we re-enter
international markets, and our investment in DPP is structured in a
capital-light manner, with an initial investment of £11 million.
Stoffel Thijs, who has deep experience operating in the European
markets, will be our Board appointee to help accelerate growth and
drive value for our shareholders. I look forward to working with
DPP's CEO, Nils Gornall, a near 30-year Dominoid, who has done an
outstanding job leading DPP since his arrival almost 2 years
ago."
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 and was authorised for release by Adrian Bushnell,
Company Secretary.
For
further information, please contact:
Domino's Pizza Group plc:
Will MacLaren, Head of Investor
Relations
07443 192 118
Brunswick:
Tim Danaher, Abbie Sampson
020 7404 5959
About Domino's Pizza Group
Domino's Pizza Group plc is the UK's
leading pizza brand and a major player in the Irish market. We hold
the master franchise agreement to own, operate and franchise
Domino's stores in the UK and the Republic of Ireland