According to its bosses, DP Eurasia (DPEU) is the "market leader" for pizza in Turkey. But given the current crisis there, that may not be a good thing. Chief executive Aslan Saranga said the group was compensating for rising inflation and higher food costs via price increases of about 10 per cent, saying there hasn't been any "discernible negative impact on volumes" so far. The reported period ended ahead of the sharp devaluation of the Turkish lira, so the effects should be more evident in the second half. That said, management still expects full-year adjusted cash profits to meet current expectations.
Turkey may be the company’s largest market, but Russia is the fastest growing in terms of profits. Adjusted cash profits from Turkey rose 12 per cent to ₺36.5m (£4.34m) during the first half, while in Russia they climbed 49 per cent to ₺7.4m. The group has opened 79 new stores during the last 12 months, bringing the total to 672, although a greater proportion of system sales are now derived online – up to 59.3 per cent from 49.7 per cent this time last year.
Analysts at Peel Hunt cut forecasts by more than half in light of the situation in Turkey. They now expect pre-tax profits of ₺23.3m (previously ₺53.9m) during 2018 giving EPS of 9.7 kuruş, compared with ₺23.6m and 29.1 kuruş in 2017.
| DP EURASIA (DPEU) | ||||
| ORD PRICE: | 90p | MARKET VALUE: | £131m | |
| TOUCH: | 90-92p | 12-MONTH HIGH: | 250p | LOW: 81p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 90 kuruş* | NET DEBT: | 114% | |
| Half-year to 30 Jun | Turnover (₺m) | Pre-tax profit (₺m) | Earnings per share (₺) | Dividend per share (kuruş) |
| 2017 | 288 | -0.4 | -0.83 | nil |
| 2018 | 380 | -10.0 | -0.07 | nil |
| % change | +32 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes ₺91.1m of intangible assets, or 63 kuruş a share £1=₺8.41 | ||||
