Final Results

DP Poland PLC

30 June 2023

DP Poland plc

("DP Poland", the "Group" or the "Company")

Final Results 2022 and Investor Presentation

DP Poland, operator of pizza stores and restaurants across Poland, announces its audited results for the year ended 31 December 2022.

Financial highlights

· Revenue increased by 19.5% to £35.7m (2021: £29.9m)

o Strong LFL revenue growth of 21.0% in 2022 compared to 2021 driven by increased average ticket price and order count

o Growth of dine-in, carry-out and delivery LFL System Sales of 55.3%, 84.7% and 5.2% respectively compared to prior year

· System Sales were up 18.2% to £36.8m (2021: £31.2m)

· Group EBITDA increased from £1.1m to £1.7m

· Group loss for the period was broadly stable compared to prior period £(4.4)m in 2022 and 2021

· Cash at bank of £4.1m as at 31 December 2022 (£2.7m as at 31 December 2021)

Operational highlights

· 87% of delivery sales were ordered online (2021: 85%)

· LFL system order count increased by 10.0% in 2022 compared to 2021

· Delivery times reduced by 14.5% in H2 2022 (vs H2 2021)

· The Group operated 116 stores at the end of 2022, including 113 Domino's Pizza stores across Poland and 3 across Croatia

· Operational completion of the merger with Dominium, with all stores rebranded to Domino's by the end of 2022

· Acquisition of All About Pizza d.o.o. ("AAP") in July 2022 together with exclusive rights of the Master Franchise Agreement concluded in July 2019 with Domino's Pizza International Franchising Inc

· Strengthened board with the appointments of Nils Gornall (CEO), Edward Kacyrz (CFO), Andrew Rennie (Non-Executive Director) and David Wild (Non-Executive Chair)

· 2022 inflation rates were 14.4% for Poland and 10.7% for Croatia, driven mainly by energy prices, food and labour costs. Careful cost management has mitigated these pressures

Outlook

· Food price rises beginning to abate, with some food costs dropping throughout Q2 2023, which should support profitability in the coming quarters of 2023

· Aim to use competitive strength to drive market share, grow our brand awareness and further consolidate the market

· On track to further solidify the strong position of Domino's in Poland.

Summary Financial Information

Currency: £000	2022	2021	% change
System Sales	36,816	31,160	18.2%
Revenue	35,694	29,866	19.5%
EBITDA*	1,693	1,137	48.9%
EBITDA* (Pre-IFRS 16)	(1,423)	(2,094)	(32.0)%
margin %	4.7%	3.8%
Loss for the period	(4,360)	(4,361)	0.0%

*excluding non-cash items, non-recurring items and store pre-opening expenses

Nils Gornall, CEO, commented:

"Strong double digit growth in System sales and LFL sales leveraged by considerable order count growth in the second half of 2022 demonstrated the Company's transformation strategy is working.

The efforts put on coding High Volume Mentality into the Company's culture, improving delivery times, portfolio consolidation, system upgrades, execution of standards as well as focus on crucial processes starts bringing results and this is visible both in top line growth and EBITDA improvement.

The positive growth trends continue in 2023. Energy and enthusiasm of our staff and their commitment to making necessary changes are high and I look with optimism to the future."

Investor Presentation

The Company is pleased to announce that Nils Gornall and Edward Kacyrz will provide a live presentation via Investor Meet Company on 4th Jul 2023 at 12:30pm BST.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet DP POLAND PLC via:

https://www.investormeetcompany.com/dp-poland-plc/register-investor

Investors who already follow DP POLAND PLC on the Investor Meet Company platform will automatically be invited.

H1 2023 trading update

Q2 sales growth for both Polish and Croatian markets have been broadly in line with April's previously announced results. A trading update for H1'2023 is expected to be released in July.

Enquiries:

DP Poland plc

Nils Gornall , CEO

Tel: +44 (0) 20 3393 6954

Email: ir@dppoland.com

Singer Capital Markets (Nominated Adviser and Broker)

Shaun Dobson

Tel: +44 (0) 20 7496 3000

Notes for editors

About DP Poland plc

DP Poland, has the exclusive right to develop, operate and sub-franchise Domino's Pizza stores in Poland and Croatia. The group operates over 116 stores and restaurants throughout cities and towns in Poland and Croatia.

Company Profile

DP Poland PLC ("DPP" or "the Company"), through its wholly owned subsidiary DP Polska S.A. ("DPPSA"), has the exclusive right to develop, operate and sub-franchise Domino's Pizza stores in Poland. DPP is a UK based company listed on the AIM Market on the London Stock Exchange.

The first Domino's Pizza store was opened in Warsaw in February 2011. In January 2021 the Group acquired the entire share capital of Dominium S.A. ("Dominium") which operated a total of 57 pizza restaurants in various locations across Poland. The exclusive rights of the Master Franchise Agreement have been granted to DPPSA for an initial period of 15 years with an option to renew for a further 10 years, subject to certain conditions. At the 2022 year-end there were 113 Domino's Pizza stores across Poland.

In July 2022 the Group acquired the entire share capital of All About Pizza d.o.o. ("AAP") together with exclusive rights of the Master Franchise Agreement concluded in July 2019 with Domino's Pizza International Franchising Inc. At the 2022 year-end APP operated 3 pizza restaurants in Croatia.

Poland has a population of 38 million people and has the potential to become a significant pizza delivery market. Croatia with the population of 4 million people is perceived by the directors to have strategic expansion opportunities given the current lack of chained sectoral competition.

DPP's objective is to establish Domino's Pizza as the leading pizza brand in Poland and Croatia.

Chairman's Statement

2022 was another transformational year for DP Poland PLC, having strengthened the Board with an enthusiastic "Dominoids" team, conducted the fund raising for further expansion, finalised rebranding of all Dominium stores to "Dominos" brand and expanded operations outside Poland thanks to the acquisition of Croatian All about Pizza d.o.o. ("AAP") in June 2022. This is the first DP Poland PLC Annual Report to be published since the Polish and Croatian businesses came together.

Against the background of unprecedented challenges presented by inflationary pressures on energy, food costs and labour as a result of the war in Ukraine, much has been achieved by the management team. Nils, our CEO, will provide more detail about this in his statement.

Our board believes that consistent execution of goals and use of critical mass achieved by the acquisition of Dominium in Poland at the beginning of 2021 eventually led to entering the path of improving adjusted EBITDA in the second half of 2022 and management expects this trend to continue over 2023. Take-over of the Croatian business with considerable growth opportunities has been the first step for the Company to expand outside Poland with the ambition to become an important player in the Food & Beverage sector in Eastern Europe . At the end of 2022, the Group operated 113 stores across Poland, and 3 in Croatia, providing an opportunity to leverage economies of scale in operations, procurement and marketing. I am truly excited about the future for DP Poland PLC - we see a long and exciting roadmap ahead, driven by both organic and M&A opportunities. I am confident that our management team will have all necessary capabilities to perform well. Despite the headwinds of current inflationary pressures, we look forward to the day when these headwinds become tailwinds.

Several important changes in the composition of the Board have taken place since June 2022. In June 2022, the CEO and Executive-Director role has been taken over by well experienced - 28 years in Dominos and post-franchisee - Nils Gornall, substituting Piotr Dzierżek in that role. At the same time, Andrew Rennie - post-DPE European CEO - joined the Board as a Non-Executive Director, bringing a wealth of sectoral experience. In August 2022, Malgorzata Potkanska stepped down from the role of CFO and Executive-Director, being replaced in December 2022 by Edward Kacyrz - a Chartered Accountant with 18 years of experience in a number of financial, strategy and management roles. At the end of March 2023, Peter Furlong stepped down from the Board as a Non-Executive Director.

Further to the above changes, effective as of 31st December 2022, after 12 years of chairing the DPP Board, Nick Donaldson decided to retire and stand down from the role of Non-Executive Chairman. I would like to thank Nick for all of his engagement over that time. I am honoured to be nominated to the role of Non-Executive Chairman effective January 2023 and will put all of my efforts in to serving the Group with all of my experience.

Following these changes, I believe that the composition of the Board provides a strong and diverse range of know-how and experience, well suited to the business and the challenges ahead. We have a strong team of highly skilled Executives and Non-Executives, whose interests are 100% focused on creating shareholder value.

I would like to end my first Chairman's Statement for DPP by thanking our management team and all employees for their superb efforts and outstanding achievements in a year of transformational change for the business. Building sales and customer loyalty in this environment is a big challenge, but the results tell their own story. I would like to also thank our Board Members for their wisdom and strategic leadership to execute the programme successfully. Finally, our Shareholders continue to support the Board as we strive to grow and evolve, creating value. I am excited by our prospects.

With best my wishes.

David Wild

Non-Executive Chairman

29 June 2023

Chief Executive's Review

In 2022, the end of the COVID-19 pandemic and start of the war in Ukraine brought a challenge to the restaurant sector and a need to adapt very quickly to a "new-normal" business environment, full of inflationary pressures on energy, food costs and labour, changing consumer habits and strengthened household budget control. Despite this, DPP have continued to focus on consumer proposition improvement, cost control, network optimisation and business expansion to continue with its strategy.

It was a year of hard work for the Polish team who carried out transformation of the business from restaurant dine-in mode towards speed and quality driven High Volume Mentality via improving product, service and image to address changed consumer habits in the post-COVID-19 economy. For that reason, in order to boost sales, DPP simplified their product portfolio, concentrated on the product quality and consistency as well as simplified pricing schemes as per consumer surveys.

DPP also invested in our people and revamped the training department. We introduced the store managers' bonus schemes, focusing on our most important KPI's and created competitiveness amongst managers, with ranking our stores' performances. This overall improved operations and service offered to consumers significantly.

Furthermore, DPP focused on creating a compelling value proposition in carry-out business and recovery of dine-in business after the cease of COVID-19 restrictions, with no disruption to the development of our dominant delivery channel amounting to £22.9m in 2022 (LFL system sales) and £22.5m in 2021. We still take every occasion to improve our delivery times further to build on this to our competitive advantage, although we already offer one of the most compelling delivery services in Poland.

High Volume Mentality in combination with reduced delivery times (by 14.5% in the second half 2022 vs 2021) visibly improved consumer offering and, thus, consumers awarded us with a considerable 21.0% Like-For-Like (LFL) sales increase for the year 2022 driven by both average ticket price as well as order count. Q1 2023 Like-For-Like saw sales increase by 19.4% Quarter-To-Quarter giving us the privilege to look with optimism to the future.

Observed volume growth in 2022 drove commissary capacity coverage rates up to their highest levels ever recorded, however, further Company growth is not at risk as the capacity can easily be scaled up via introduction of work in shifts or light capital investments. At the same time, growing business scale created the opportunity to renegotiate distribution costs, whilst still maintaining the highest quality standards.

In 2022, DPP looked very closely at cost management. Inflationary pressures were a trigger to speed up IT projects covering the accounting system upgrade, cash and labour management, review energy contracts and reengineer a few basic processes, results of which in overall overbalanced the pressures and the caused adjusted EBITDA trend reversal that we expect to continue over 2023.

At the end of 2022 the Company was at the final stage of network optimisation in Poland (after Dominium S.A. reverse take-over in 2021) delivering three store refurbishments, opening two new locations and eliminating eight loss-making stores in poor locations, ending up the year with 113 points of sales. Such optimisation was a sound decision driving adjusted EBITDA improvement and creating a base for further expansion.

The capital for last year investments as well as further expansion has been secured by the fund raising held in the summer 2022. Simultaneously, DPP's cash position visibly improved. The capital obtained will serve in 2023 for further store network development in Poland and Croatia, store refurbishments, appropriate marketing campaigns reflecting growing brand awareness and additional IT system upgrades.

In July 2022, DPP expanded its operations outside Poland by acquiring All About Pizza d.o.o. (APP) - a company established in Croatia in 2020 with three corporate stores at the date of transaction. The highly fragmented Croatian market gives a well performing APP the chance to take a dominant market position with a good forecast for further network expansion. The take-over transaction was executed via exchange of shares.

We continued to work on the Digital Experience Platform improving content and user experience in all of our points of contacts - webpage, mobile and apps. Additionally, Ukrainian language was added to the Platform answering the needs of the growing number of Ukrainian citizens in Poland and Croatia.

We want to exploit every digital order and delivery opportunity, and for that reason we added Wolt to the current list of aggregators - Pyszne.pl (known in Europe as 'Just take away'), Glovo and UberEats. Additionally, we are reviewing other sales opportunities, as our objective is to generate new orders incrementally, with a higher average spend.

The strong foundation for the DPP business has been built in the last two years. This is the first financial statements which presents the consolidated business of Polish and Croatian entities, and the first year where a clear pivot in business performance is visible, showing the company's hidden potential. The numbers reflect the true financial performance, but include one-off items related to the transformation to High Volume Mentality.

We have seen improvement in adjusted EBITDA, but we aspire for more. Since Q2 2022, we have faced an unprecedented inflationary environment that had an impact on our 2022 profitability, however, food price rises are beginning to abate, with some food costs dropping throughout Q2 2023, which should support profitability in the coming quarters of 2023.

As announced to the market, we are seeking to reduce the inflationary impact through various cost-efficiency initiatives and price increases whilst ensuring we continue to offer the best consumer value. Due to the scale of our business, we believe we are in a much better position than other small players in Poland. We want to use our competitive strength to drive market share, grow our brand awareness and consolidate the market further. The board is fully behind this stated strategy of growing market share.

I remain very optimistic about the outlook. We are on the right track to further solidify the strong position of Domino's in Poland.

Nils Gornall

Chief Executive Officer

29 June 2023

Chief Financial Officer's Review

Overview

It is a great pleasure for me to comment on the financial performance of the enlarged Group for the first time as the Company's Chief Financial Officer.

2022 was expected to be a pivot year for many industries worldwide as the COVID-19 pandemic was coming to an end. Unfortunately, the war in Ukraine has had a significant impact on the global economy and severely impacted energy prices, food costs and the labour market in Central Eastern Europe where DPP is operating. These inflationary pressures have, inevitably, negatively impacted the whole restaurant sector, however, in particular independent players who could not benefit from the effect of scale, purchase power nor differentiated channels of distribution. At the same time, damaged sector condition created an opportunity for growth for the chained and better organised businesses.

Consistent execution of the strategy over 2022 positioned DPP well in the new economic environment. Thanks to implemented High Volume Mentality, increased focus on operations excellence, stringent cost management and digital platform development, DPP delivered a strong 21.0% LFL top line growth and reversed EBITDA trend, building a solid base for further business development and market shares growth.

Acquisition of All About Pizza d.o.o. (APP)

On 29 July 2022 the Company completed an acquisition with All About Pizza d.o.o. (APP), a company registered in Croatia. Further information about the transaction is disclosed in Note 21. The transaction resulted in APP becoming a wholly owned subsidiary of the Company in accordance with IFRS 3 'Business Combinations' and was concluded via exchange of 100% APP shares for 5% shares of the Company. The APP shareholders - Nils Gornall and Andrew Rennie - were nominated to the Company's board. The fair value of the identifiable assets and liabilities acquired as at acquisition date amounted to £988,751 and the fair value of the consideration transferred amounted to £2,264,362. An excess of consideration paid over the net assets was attributed to MFA intangible asset.

Financial Performance

		2022	2021
	Notes	£	£

System sales*		36,816,825	31,159,781
Revenue	2	35,694,098	29,866,189

Direct Costs		(28,312,921)	(24,427,738)

Selling, general and administrative expenses - excluding: store pre-opening expenses, depreciation, amortisation and share based payments	3	(5,687,720)	(4,301,176)

Group adjusted EBITDA - excluding non-cash items, non-recurring items and store pre-opening expenses		1,693,457	1,137,275

Store pre-opening expenses		(37,584)	(3,429)
Other non-cash and non-recurring items	6	(500,971)	59,278
Depreciation and amortisation		(4,336,210)	(4,867,679)
Share based payments	31	(137,748)	(51,301)
Foreign exchange gains / (losses)		17,406	(61,911)
Finance income	8	257,984	1,155,806
Finance costs	9	(1,258,850)	(1,669,527)




Loss before taxation	5	(4,302,516)	(4,301,488)

Taxation	10	(57,429)	(58,983)

Loss for the period		(4,359,945)	(4,360,471)

* System Sales - total retail sales including sales from corporate and sub-franchised stores

Revenue

The Group System sales increase by 18.2% was driven by Polish system sales growth by 16.1% (20.2% in Local currency) and Croatian sales after acquisition which comprises 2.1% of the Group System sales.

The Group revenue increased by 19.5% Year-over-Year ("YoY") (23.7% in Local currency) and 21.0% Like-For-Like was primarily driven by the launch of the High Volume Mentality approach and repositioning of distribution channels after the COVID-19 pandemic - the development of carry-out offerings adjusting to consumer habits, and the recovery of the dine-in business, with the Company growing their delivery operations with the main focus being to reduce delivery times.

The growth was satisfactorily divided between average ticket price increase and order count improvement. From a phasing perspective, as profiled later in the Key Performance Indicators section, DPP performance in 2022 consistently improved from quarter to quarter, despite growing inflationary pressures and falling consumer sentiment since the beginning of the war in Ukraine.

Direct costs

Although the Polish economy was subject to one of the highest inflation rates in Europe during 2022, with particular pressure on energy prices (88.3% YoY), food costs (22.1% YoY) and labour market (7.5% minimal wage increase in 2022), the Group managed to improve its cost position and keep direct costs increase (15.9.% YoY) visibly below the revenue growth (19.5% YoY).

Such results were delivered by implementing cost management projects, including the standardisation of production processes, partial exchange of scooters fleet impacting reduction of maintenance costs, delivery times' improvement, labour management and reduction of energy consumption.

Review of current contract terms and performing an active search of new vendors have allowed the Group to achieve savings on food cost and decrease these costs (as % of revenue) in comparison to 2021.

Selling, general and administrative expenses ("SG&A")

SG&A were equivalent to 15.9% of revenue, which is 1.5 percentage points ("p.p.") higher than in 2021, driven in majority by the higher than minimal wage salary growth ( 8.7%), higher energy costs in commissary, increased marketing costs supporting volume growth, employee benefits and professional fees.

Other non-cash and non-recurring items

The Group recognised non-cash and non-recurring items in 2022, mainly referring to an IFRS16 adjustment representing right of use assets write-off due to potential store closures in 2023 related to network optimisation in Poland (amounting to £542,488). The other non-cash and non-recurring items include advisors and other fees related to AAP acquisition, VAT refund as well as gains and losses from the sale and liquidation of fixed assets.

Depreciation and amortisation

Depreciation and amortisation expenses consist mainly of right of use assets depreciation charges amounted to £2,272,151 in 2022 (2021: £2,427,823), leasehold improvements depreciation amounted to £804,578 (2021: £924,736) and intangible assets amortisation amounted to £626,252 in 2022 (2021: £674,030).

Finance costs

Finance costs of the Group mainly include interest expense on lease liabilities amounted to £665,084 (2021: £742,862) and interest payable according to loan note issued to Malaccan Holdings Ltd amounted to £333,418 (2021: £420,544).

Taxation

The Group paid no corporation tax in 2022 due to brought forward losses. As the Group has unused tax losses of £17,702,039 available for offset against future profits, it does not expect to pay any corporation tax in 2023.

Group loss for the period

Group loss for the period is broadly stable compared to 2021. This is mainly due to increased inflationary pressures on food and labour costs as well as enhanced selling and administrative costs as a result of higher investment into marketing, followed by three stores refurbishments and two new stores openings.

For the purpose of achieving profits in the future, the board has prepared a twelve month' roadmap for a number of different strategic and operational projects aiming at better consumer proposition (i.e. consumer surveys) reduction of direct costs (review and renegotiation of trading terms within the major cost groups) and fundamental operational costs reduction, covering such areas as the Group structure, commissary setup, processes' optimisation (i.e. new accounting system), automation of processes and labour management (i.e. new labour scheduling system roll-out).

Group Loss for the period*	2022	2021	Change %
Group loss for the period	(4,359,945)	(4,360,471)	+0.01%

* Actual exchange rates for 2022 and 2021

Store Count Poland

Dominos Polska S.A. & Dominium S.A.	1 Jan 2022	M&A	Opened	Closed	31 Dec 2022
Corporate	113	0	2	10*	105
Sub-Franchised	8	0	0	0	8
Total	121	0	2	10*	113

* The number of closed stores includes two seasonal stores being opened only during summer

Store Count Croatia

All About Pizza d.o.o.	1 Jan 2022	M&A 29^th July 2022	Opened	Closed	31 Dec 2022
Corporate	0	3	0	0	3
Sub-Franchised	0	0	0	0	0
Total	0	3	0	0	3

Enlarged Group

Store count	1 Jan 2022	M&A	Opened	Closed	31 Dec 2022
Corporate	113	3	2	10	108
Sub-Franchised	8	0	0	0	8
Total	121	3	2	10	116

In 2022 DP Poland opened 2 new corporate stores and closed 10 stores (including 2 seasonal stores). 3 stores were fully refurbished. The acquisition of APP added an additional 3 stores in Croatia to the DPP store network. The chain managed to shorten delivery times by 14.5% in the second half 2022 vs 2021, approaching very close to the European average.

Sales Key Performance Indicators (KPIs)

System sales* were up 18.2% YoY, whereas LFL system sales** were up 21.0% YoY.

	2022	2021	Change %
Group System Sales* £	36,816,825	31,159,781	18.2%
Poland LFL system sales**, % growth	21%	7%	n/a
Poland LFL system order count***, % growth	10%	0%	n/a
Poland Delivery System Sales**** ordered online, % growth	87%	85%	n/a

* System Sales - total retail sales including sales from corporate and sub-franchised stores. Sales from sub-franchised stores are not included in revenue

** Like-for-like System Sales - matching trading periods for the same stores between 1 January and 31 December 2022 and 1 January and 31 December 2021. The Group's system stores that are included in like-for-like System Sales comparisons are those that have operated for at least 1 year preceding the beginning of the first month of the period used in like-for-like comparisons for a certain reporting period, assuming the relevant system store has not been subsequently closed

*** System order count - total retail orders from corporate and sub-franchised stores

**** Delivery System Sales stand for the turnover generated in delivery channel by both corporate and franchisee stores

Like-for-like System Sales growth 2022 vs 2021 per quarter were as follows:

	Q1	Q2	Q3	Q4
LFL system sales growth by quarter	21.8%	25.6%	24.4%	13.4%

Exchange rates

PLN : £1	2022	2021	Change %
Profit & Loss Account	5.4965	5.3108	+3.5%
Balance Sheet	5.2827	5.4702	-3.4%

HRK : £1	2022	2021	Change %
Profit & Loss Account	8.7079	n/a	-
Balance Sheet	8.4950	n/a	-

Financial Statements for our Polish subsidiaries DP Polska S.A. and Dominium S.A. are denominated in Polish Zloty ("PLN") and translated to Pound Sterling ("GBP"). Financial Statements for our Croatian subsidiary All About Pizza d.o.o. are denominated in Croatian Kuna ("HRK") and translated to Pound Sterling ("GBP"). Under UK adopted international accounting standards the Income Statement for the Group has been converted from PLN and HRK at the average annual exchange rate applicable. The balance sheet has been converted from PLN and HRK to GBP as at the exchange rate at 31 December 2022.

Cash position

	1^st January 2022	Cash movement	31^st December 2022
Cash in bank	2,701,646	1,408,676	4,110,322

The large cash movement is a result of fundraising completed in August 2022 and cash outflows for a number of different strategic and operational projects.

Inventories

	1^st January 2022	Movement	31^st December 2022
Raw materials and consumables	667,898	314,212	982,110

An increase of inventory is mainly due to increased purchases of cheese in 2022 due to expected future price increases as well as acquisition of AAP in July 2022.

Trade and other receivables

	1^st January 2022	Movement	31^st December 2022
Current trade and other receivables	1,219,447	747,540	1,966,987

An increase of trade and other receivables balance is mainly due to prepayments for TV marketing campaign started in the beginning of 2023 and VAT receivables increase.

Cash flows from investing activities

Cash flows from investing activities amounted to £(3,555,378) in 2022 (2021: £357,170) comprise mainly acquisition of property, plant and equipment, software and other intangible assets due to AAP acquisition.

Macro-economic conditions in Poland and Croatia

Polish GDP increased in 2022 by 4.9% YoY. The country is expected to face further inflationary pressures in 2023, although less aggressive than in 2022. The board is constantly monitoring purchase prices to ensure the Group can react to any price increases from its suppliers.

The unemployment rate has stayed at the rates below 3% since 2020, with no signs to grow.

Macro-economic conditions - Poland	2022	2021
Real GDP growth (% growth)	4.9*	6.8
Inflation (% growth)	14.4	5.1
Unemployment Rate (% of economically active population)	2.9	2.9

* First estimate of Polish Statistics Office for the year 2022

Croatian GDP increased in 2022 by 6.3%. The country is still facing inflationary pressures in result of world macroeconomic situation, however, currency change from HRK to EUR effective 1st January 2023 additionally strengthened this pressure in short-term. For that reason, APP has been assigned to supply contracts of the Group to reduce pressure on APP profitability.

Macro-economic conditions - Croatia*	2022	2021
Real GDP growth (% growth)	6.3	13.1
Inflation (% growth)	10.7	2.7
Unemployment Rate (% of economically active population)	7.1	7.6

* Data based on macroeconomic indicators published 27th March 2023 by Croatian National Bank

Sub-franchised stores

There are 8 sub-franchised stores as at 31st December 2022. Sales of sub-franchised stores for 2022 amounted to £2,351,560 (2021: £2,632,464).

Going concern

The board considered the Group's forecasts, in particular those relating to the growing sales volume and improved cost management, to satisfy itself that the Group has sufficient resources to continue in operation for the foreseeable future. The Group sales and costs forecasts are based on market-available data with regard to country GDP growth rates, inflation, price trends of main cost items, as well as on historical level of sales volumes and incurred costs as a percentage of sales, taking into account implemented High Volume Mentality, digital platform development and increased focus on operations excellence. The board also considered the Group's cash flow forecasts and successfully concluded stress-test for drop in net sales by 5% versus initial forecast taking into consideration possible changes in inflation and commodity prices. Sensitivity analysis has been completed, and inflation rate would need to increase from 15.1% to 30.0% with no change in revenue to pass these costs increases to customers for there to be an issue with going concern based on future forecasts.

Over the past quarters in 2022, the board of DP Poland has given a considerable thought as to how the Group might define, quantify and minimise the risks related to inflationary pressures in result of the war in Ukraine. As the highest inflation rates were recorded between July and November 2022 with following months to abate, the board considers that the major risks connected with inflation are vanishing, which has already been reflected in the decreasing commodity prices offered by suppliers in Q1 2023, with the forecast for further price reductions.

On the other hand, the board has prepared a twelve month roadmap for a number of different strategic and operational projects aiming at better consumer proposition (i.e. consumer surveys), and fundamental operational costs reduction, covering such areas as the Group structure, commissary setup, processes optimisation (i.e. new accounting system), automation of processes and labour management (i.e. new labour scheduling system roll-out).

The Company's recent equity fundraise made in August 2022, which provided an additional £4.8m (before expenses) of resource, has improved the Company's cash balances and its ability to settle the substantial transactions, capital expenditure as well as operating losses, in expectation of the benefits coming to the business in result of strategy change and High Volume Mentality approach in the near future.

Having considered the Group's cash flows and its liquidity position, and after reviewing the forecast for the next twelve months and beyond, taking into account reasonably possible changes in trading performance, the Directors believe that the Group has adequate resources to continue operations for the foreseeable future and for this reason they continue to adopt the going concern basis in preparing the financial statements.

That said, the board does take into account the uncertainty related to the future dynamics of the commodity prices and inflationary pressures, which remain the most pronounced risks to our going concern assumptions.

Edward Kacyrz

Chief Financial Officer

29 June 2023

FINANCIAL STATEMENTS

Group Income Statement

			2022	2021
		Notes	£	£

Revenue		2	35,694,098	29,866,189

Direct Costs			(28,312,921)	(24,427,738)

Selling, general and administrative expenses - excluding: store pre-opening expenses, depreciation, amortisation and share based payments		3	(5,687,720)	(4,301,176)
Group adjusted EBITDA - excluding non-cash items, non-recurring items and store pre-opening expenses			1,693,457	1,137,275

Store pre-opening expenses			(37,584)	(3,429)
Other non-cash and non-recurring items		6	(500,971)	59,278
Depreciation and amortisation			(4,336,210)	(4,867,679)
Share based payments		31	(137,748)	(51,301)
Foreign exchange gains / (losses)			17,406	(61,911)
Finance income		8	257,984	1,155,806
Finance costs		9	(1,258,850)	(1,669,527)




Loss before taxation		5	(4,302,516)	(4,301,488)

Taxation		10	(57,429)	(58,983)

Loss for the period			(4,359,945)	(4,360,471)


Loss per share	Basic	12	(0.67 p)	(0.75 p)
	Diluted	12	(0.67 p)	(0.75 p)

All of the loss for the year is attributable to the owners of the Parent Company.

Group Statement of comprehensive income

	2022	2021

	£	£

Loss for the period	(4,359,945)	(4,360,471)
Currency translation differences	(333,785)	24,798
Other comprehensive expense for the period, net of tax to be reclassified to profit or loss in subsequent periods	(333,785)	24,798

Total comprehensive income for the period	(4,693,730)	(4,335,673)

All of the comprehensive expense for the year is attributable to the owners of the Parent Company.

Group Balance Sheet

		2022	2021

	Notes	£	£
Non-current assets
Goodwill	13	15,111,002	15,008,736
Intangible assets	14	3,714,479	2,207,448
Property, plant and equipment	15	6,645,301	6,135,097
Leases - right of use assets	22	6,472,965	8,237,471
Trade and other receivables	19	822,042	820,871
		32,765,789	32,409,623
Current assets
Inventories	20	982,110	667,898
Trade and other receivables	19	1,966,987	1,219,447
Cash and cash equivalents	25	4,110,322	2,701,646
		7,059,419	4,588,991

Total assets		39,825,208	36,998,614

Current liabilities
Trade and other payables	26	(5,343,028)	(4,983,665)
Lease liabilities	23	(2,834,336)	(2,667,159)
		(8,177,364)	(7,650,824)

Non-current liabilities
Lease liabilities	23	(5,666,835)	(7,038,279)
Deferred tax	18	(276,099)	(213,797)
Borrowings	27	(6,763,297)	(5,829,461)
		(12,706,231)	(13,081,537)

Total liabilities		(20,883,595)	(20,732,361)

Net assets		18,941,613	16,266,253

Equity	24
Called up share capital	30	3,561,969	3,097,933
Share premium account		46,925,141	42,551,453
Capital reserve - own shares		(48,163)	(48,163)
Retained earnings		(21,450,212)	(17,228,015)
Merger relief reserve		23,676,117	21,282,500
Reverse Takeover reserve		(33,460,406)	(33,460,406)
Currency translation reserve		(262,834)	70,951
Total equity		18,941,613	16 266253

The financial statements were approved by the Board of Directors and authorised for issue on 29 June 2023 and were signed on its behalf by:

Nils Gornall Edward Kacyrz

Chief Executive Officer Chief Financial Officer

Company Balance Sheet

		2022	2021

	Notes	£	£
Non-current assets
Investments	16	32,966,376	51,790,168
Loans granted to subsidiary undertakings	17	171,341	-
		33,137,717	51,790,168

Current assets
Trade and other receivables	19	146,981	421,594
Cash and cash equivalents	25	65,293	302,509
		212,274	724,103

Total assets		33,349,991	52,514,271

Current liabilities
Trade and other payables	26	(94,078)	(130,669)


Non Current liabilities
Borrowings	27	(6,734,149)	(5,829,461)

Net assets		26,521,764	46,554,141

Equity	24
Called up share capital	30	3,561,969	3,097,933
Share premium account		46,925,141	42,551,453
Retained earnings		(47,641,463)	(20,377,745)
Merger relief reserve		23,676,117	21,282,500

Shareholders' Equity		26,521,764	46,554,141

The financial statements were approved by the Board of Directors and authorised for issue on 29 June 2023 and were signed on its behalf by:

Nils Gornall Edward Kacyrz

Chief Executive Officer Chief Financial Officer

The loss relating to transactions in the financial statements of the parent company was £27,401,465 (2021: £11,557,307).

DP Poland plc's company registration number is 07278725

Group Statement of Cash Flows

		2022	2021

	Notes	£	£
Cash flows from operating activities
Loss before taxation for the period		(4,302,516)	(4,301,488)

Adjustments for:
Finance income	8	(257,984)	(1,155,806)
Finance costs	9	1,258,850	1,669,527
Foreign exchange movements		(144,025)	1,180,246
Depreciation, amortisation and impairment		4,336,210	4,867,679
Loss on fixed asset disposal		136,974	267,866
VAT refund - interests	8	231,476	-
Dismantling provision		20,466	-
Share based payments expense	31	137,748	51,301
Operating cash flows before movement in working capital		1,417,199	2,579,325

(Increase) in inventories	20	(314,212)	(32,569)
(Increase) / decrease in trade and other receivables	19	(748,711)	144,647
Increase / (decrease) in trade and other payables	26	359,363	(2,276,572)
Cash generated from operations		713,639	414,831

Taxation payable		-	-

Net cash generated from operations		713,639	414,831

Cash flows from investing activities
Payments to acquire software		(241,032)	(170,637)
Payments to acquire property, plant and equipment		(1,072,811)	(720,381)
Payments to acquire intangible fixed assets		(62,831)	(208,004)
Proceeds from disposal of property plant and equipment		46,063	90,892
Interest received on sub-franchisee loans	8	16,767	25,233
Interest received on short-term deposits		-	3,811
Cash flows from acquiring a subsidiary	21	(2,241,534)	1,336,256

Net cash (used in) / generated from investing activities		(3,555,378)	357,170

Cash flows from financing activities
Net proceeds from issue of ordinary share capital		7,231,341	6,121,561
Repayment of lease liabilities		(2,068,948)	(3,474,856)
Repayment of borrowings		(163,539)	-
Interest paid on lease liabilities	9	(665,084)	(751,711)
Net cash from/(used in) financing activities		4,333,770	1,894,994

Net increase in cash		1,492,031	2,666,995

Exchange differences on cash balances		(83,355)	-
Cash and cash equivalents at beginning of period		2,701,646	34,651

Cash and cash equivalents at end of period	25	4,110,322	2,701,646

Company Statement of Cash Flows

		2022	2021

	Notes	£	£
Cash flows from operating activities
Loss before taxation		(27,401,466)	(11,557,307)

Adjustments for:
Finance income		(818,128)	(35)
Finance expense		576,416	420,544
Foreign exchange movements		389,243	(409,904)
Impairment charge		26,781,124	11,130,429
Share based payments expense		72,315	32,034
Operating cash flows before movement in working capital		(400,496)	(384,239)

Decrease in trade and other receivables	19	274,613	50,598
(Decrease) in trade and other payables	26	(36,591)	(771,917)
Cash used in operating activities		(162,474)	(1,105,558)

Cash flows from investing activities
Equity investment in subsidiary company		(7,891,899)	(5,710,536)
Loans granted to subsidiary undertakings	17	(170,867)	-
Interest received		818,128	35
Net cash (used in) investing activities		(7,244,638)	(5,710,501)

Cash flows from financing activities
Interest paid		-	(10,640)
Net proceeds from issue of ordinary share capital		7,231,341	6,121,561
Net cash from financing activities		7,231,341	6,110,921

Net decrease in cash		(175,772)	(705,138)

Exchange differences		(61,444)	409,904
Cash and cash equivalents at beginning of period		302,509	1,007,647

Cash and cash equivalents at end of period	25	65,293	302,509

Group Statement of Changes in Equity

		Share		Currency	Capital	Reverse	Merger
	Share	premium	Retained	translation	reserve -	Takeover	Relief
	capital	account	earnings	reserve	own shares	reserve	reserve	Total
	£	£	£	£	£	£	£	£

At 1 January 2021	1,648,700	8,124,915	(12,918,845)	46,153	-	-	-	(3,099,077)
Translation difference	-	-	-	24,798	-	-	-	24,798
Loss for the period	-	-	(4,360,471)	-	-	-	-	(4,360,471)
Total comprehensive income for the year	-	-	(4,360,471)	24,798	-	-	-	(4,335,673)
Transfer to reverse takeover reserve	(1,648,700)	(8,124,915)	-	-	-	9,773,615	-	-
Recognition of DP Poland Plc equity	1,270,543	36,838,450	-	-	(48,163)	(20,532,689)	-	17,528,141
Reverse takeover of Dominium	1,418,832	-	-	-	-	(22,701,332)	21,282,500	-
Shares issued (net of expenses)	408,558	5,713,003	-	-	-	-	-	6,121,561
Share based payments	-	-	51,301	-	-	-	-	51,301
Transactions with owners in their capacity as owners	1,449,233	34,426,538	51,301	-	(48,163)	(33,460,406)	21,282,500	23,701 ,003
At 31 December 2021	3,097,933	42,551,453	(17,228,015)	70,951	(48,163)	(33,460,406)	21,282,500	16,266,253
Translation difference	-	-	-	(333,785)	-	-	-	(333,785)
Loss for the period	-	-	(4,359,945)	-	-	-	-	(4,359,945)
Total comprehensive income for the year	-	-	(4,359,945)	(333,785)	-	-	-	(4,693,730)
Shares issued (net of expenses)	464,036	4,373,688	-	-	-	-	2,393,617	7,231,341
Share based payments	-	-	137,748	-	-	-	-	137,748
Transactions with owners in their capacity as owners	464,036	4,373,688	137,748	-	-	-	2,393,617	7,369,089
At 31 December 2022	3,561,969	46,925,141	(21,450,212)	(262,834)	(48,163)	(33,460,406)	23,676,117	18,941,613

Company Statement of Changes in Equity

		Share
	Share	premium	Retained	Relief
	capital	account	earnings	reserve	Total
	£	£	£	£	£
At 31 December 2020	1,270,542	36,838,450	(8,871,739)	-	29,237,253
Loss for the year	-	-	(11,557,307)	-	(11,557,307)
Total comprehensive income for the year	-	-	(11,557,307)	-	(11,557,307)
Shares issued	408,558	5,713,003	-	-	6,121,561
Merger relief reserve	1,418,833	-	-	21,282,500	22,701,333
Share based payments	-	-	51,301	-	51,301
Transactions with owners in their capacity as owners	1,827,391	5,713,003	51,301	21,282,500	28,874,195
At 31 December 2021	3,097,933	42,551,453	(20,377,745)	21,282,500	46,554,141
Loss for the year	-	-	(27,401,465)	-	(27,401,465)
Total comprehensive income for the year	-	-	(27,401,465)	-	(27,401,465)
Shares issued)	464,036	4,373,688	-	-	4,837,724
Merger relief reserve	-	-	-	2,393,617	2,393,617
Share based payments	-	-	137,748	-	137,748
Transactions with owners in their capacity as owners	464,036	4,373,688	137,748	2,393,617	7,369,089
At 31 December 2022	3,561,969	46,925,141	(47,641,462)	23,676,117	26,521,764

Notes to the Financial Statements

1. ACCOUNTING POLICIES

Authorisation of financial statements and statement of compliance with IFRSs

The DP Poland plc Group and Company financial statements for the year ended 31 December 2022 were authorised for issue by the Board of the Directors on 29 June 2023 and the balance sheets were signed on the Board's behalf by Nils Gornall and Edward Kacyrz. DP Poland plc is a public limited company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange.

Basis of preparation

Both the Group financial statements and the Company financial statements have been prepared and approved by the directors in accordance with UK-adopted international accounting standards, IFRIC Interpretations and the Companies Act 2006. The preparation of financial statements in accordance with UK-adopted international accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies.

An additional line item for 'Group adjusted EBITDA - excluding non-cash items, non-recurring items and store pre-opening expenses' has been presented on the face of the income statement as the Board believes this presentation is relevant to the understanding of the Group's financial performance and is a useful indicator for the underlying cash generated from operations. Other non-GAAP performance measures used are:

- System sales (the sum of all sales made by both sub-franchised and corporate stores to consumers)

- Like-for-like sales (same store sales for those stores which traded throughout the current and comparative period).

The non-GAAP performance measures may not be comparable with similarly described items reported by other entities.

The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to publish its individual income statement and related notes.

The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2022.

The Group and Company financial statements are presented in Sterling. The assets and liabilities of the foreign subsidiaries, whose functional currency is Polish Zloty and Croatian Kuna, are translated into sterling at the rate of exchange ruling at the balance sheet date and their income statements are translated at the average rate for the year. Differences arising from the translation of the opening net investment in the subsidiary are taken to reserves and reported in the Group statement of comprehensive income.

Basis of consolidation

The Group financial statements comprise the financial statements of DP Poland plc, its subsidiary undertakings and the Employee Benefit Trust ("EBT") drawn up to 31 December of each year, using consistent accounting policies. Subsidiary undertakings have been included in the Group financial statements using the purchase method of accounting. Accordingly the Group Income Statement and Group Statement of Cash Flows include the results and cash flows of subsidiaries from the date of acquisition.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. The financial statements of subsidiaries are prepared for the same reporting year as the parent Company, using consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them, are eliminated on consolidation.

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

With effect from 29 July 2022, the Company became the legal parent of All About Pizza d. o.o. Further information about the transaction is disclosed in note 21. The transaction resulted in APP becoming a wholly owned subsidiary of the Company in accordance with IFRS 3 'Business Combinations'.

Adoption of new and revised standards

The accounting policies adopted in the preparation of the Group financial statements are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2021, except for the adoption of new standard, interpretations, and amendments to standards effective as of 1 January 2022.

The amendments and interpretations below were applied in 2022 and had no significant impact on the accounting policies applied:

- Amendments to IFRS 3 - Reference to the Conceptual Framework

- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use

- Amendments to IAS 37 - Onerous Contracts - Costs of Fulfilling a Contract

New standards and interpretations not applied

Below amendments to standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted. The Group has not early adopted the new or amended standards in preparing these consolidated financial statements:

- IFRS 17 Insurance Contracts

- Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 - Comparative Information

- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies

- Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates

- Amendments to IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction

It is expected that the standards will not have a material impact on the Group.

Below are standards and amendments that are issued but not yet approved by the UK. The Group will apply the standard once approved by the UK:

- Amendments to IAS 1: Classification of liabilities as current or non-current and Non-current Liabilities with Covenants

- Amendment to IFRS 16 - Leases on sale and leaseback

Intangible assets

Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. Intangible assets with a finite life are amortised and charged to administrative expenses on a straight line basis over their expected useful lives, as follows:

- Franchise fees and intellectual property rights: over the duration of the legal agreement;

- Computer software: 2 years from the date when the software is brought into use; and

- Capitalised loan discounts: the life of sub-franchise agreements of 10 years.

The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Goodwill

Goodwill is initially measured at cost and any previous interest held over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in the income statement.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired.

The Group performs impairment reviews at the reporting period end to identify any goodwill or intangible assets that have a carrying value that is in excess of it's recoverable amount. Determining the recoverability of goodwill and the intangible assets requires judgement in both the methodology applied and the key variables within that methodology. Where it is determined that an asset is impaired, the carrying value of the asset will be reduced to its recoverable amount with the difference recorded as an impairment charge in the income statement.

In accordance with IAS 36, the Group has tested goodwill for impairment at the reporting date. No goodwill impairment was deemed necessary as at 31 December 2022. For further details on the impairment review please refer to note 13.

Fixtures, fittings and equipment

Fixtures, fittings and equipment are stated at cost less accumulated depreciation and any impairment in value. Leasehold property comprises leasehold improvements including shopfitting and associated costs.

Depreciation

Depreciation is provided on all tangible non-current assets at rates calculated to write off the cost, less estimated residual value based on prices prevailing at the balance sheet date, of each asset on a straight line basis over its expected useful life, as follows:

Leasehold property - over the expected lease term

Fixtures, fittings and equipment - 3 to 10 years

The carrying values of tangible non-current assets are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

The asset's residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.

Assets Under Construction

Assets under construction comprise the cost of tangible fixed assets in respect of stores that have not yet opened and therefore no depreciation has yet been charged. Depreciation will be charged on the assets from the date that they are available for use.

Impairment

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing fair value less costs to sell , the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the income statement under the expense category: Depreciation, amortisation and impairment.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Financial instruments

Financial instruments are measured initially at cost, which is the fair value of whatever was paid or received to acquire or incur them.

Financial assets

All of the Group's financial assets are held within a business model whose objective is to collect contractual cash flows which are solely payments of principals and interest and therefore classified as subsequently measured at amortised cost.

Financial assets at amortised cost are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group's financial assets at amortised cost comprise trade and other receivables, loans to sub-franchisees and cash and cash equivalents in the balance sheet. Loans to sub-franchisees are provided at below market interest rates. The difference between the present value of loans recognised and the cash advanced has been capitalised as an intangible asset in recognition of the future value that will be generated via the royalty income and Commissary sales that will be generated. These assets are amortised over the life of a new franchise agreement of 10 years.

The Group recognises an allowance for expected credit losses ('ECLs') for all financial assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.

Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or as financial liabilities measured at amortised cost. Financial liabilities at amortised cost comprise trade and other payables, loans and accruals.

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Borrowings

Borrowings are recognised initially at fair value net of directly attributable transaction costs.

After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less. For the purpose of the consolidated and company cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Inventories

Inventories are stated at the lower of cost and net realisable value. Inventories comprise food and packaging goods for resale. The Group applies a first in first out basis of inventory valuation.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Foreign Currency Translation

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

c) all resulting exchange differences are recognised within other comprehensive income as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are recognised in other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences are reclassified from equity to profit or loss on disposal of the net investment.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Employee share incentive plans

The Group issues equity-settled share-based payments to certain employees (including Directors). These payments are measured at fair value at the date of grant by use of a Black-Scholes model. Vesting is dependent on performance conditions other than conditions linked to the price of the shares of DP Poland plc (market conditions). In valuing equity-settled transactions, no account is taken of these performance conditions. This fair value cost of equity-settled awards is recognised on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. No cost is recognised for awards that do not ultimately vest.

Leases

The Group as a lessee

At the balance sheet date, the Group leased 116 stores, one office, three commissaries and a number of vehicles. Leases for land and buildings are normally for an initial term of 5 years with an option to renew thereafter. Lease payments are subject to regular rent reviews to reflect market rates. The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the consolidated balance sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Extension and termination options

In determining the lease liability, the Group considers the extension and termination options. For the majority of leases the Group has the right to extend the contract unilaterally, which does not need the consent of the landlord. Periods covered by an option to extend the lease term are included in the lease term if the lessee is reasonably certain to exercise that option. The same rationale applies to termination options. The term covered by a termination option is not included in the lease term if the lessee is reasonably certain not to exercise the option.

Critical judgements in determining the lease term

Leases are negotiated on an individual basis and contain a wide range of terms and conditions, such as early termination clauses and renewal rights. Termination clauses and renewal rights are used to maximise operational flexibility in terms of managing the assets used in the Group's operations. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise a renewal right, or not exercise a termination clause. An adjustment to the lease term is only made if the lease is reasonably certain to be extended or not terminated.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the consolidated balance sheet. The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'Property, Plant and Equipment' policy. Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in 'Other expenses' in profit or loss.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. For contracts that contain a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Group as lessor

The Group enters into lease agreements as an intermediate lessor with respect to stores operated by sub-franchisees.

Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The Group evaluates and classifies these subleases as either operating leases or finance leases. Where the sublease transfers substantially all of the risks and rewards arising from right-of-use asset from the head lease, the right-of-use asset from head lease is derecognised and a lease receivable equal to the net investment in the sublease is recognised. Where the sublease does not transfer substantially all of the risks and rewards arising from right-of-use asset from the head lease, the sublease is classified as an operating lease and rent received is recognised in the income statement on a straight line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

When a contract includes lease and non-lease components, the Group applies IFRS 15 to allocate the consideration under the contract to each component.

Current tax

Current tax is the amount of income tax payable on the taxable profit for the period. Current tax assets and liabilities for the current and prior periods are measured at the amounts expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts with the exception of:

- Where the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

- For taxable temporary differences associated with investments in subsidiaries, associates and interest in joint ventures and where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.

Capital instruments

Ordinary shares are classified as equity instruments. Other instruments are classified as liabilities if they contain an obligation to transfer economic benefits and if not they are included in equity. The finance costs recognised in the Income Statement in respect of capital instruments other than equity shares are allocated to periods over the term of the instrument at a constant rate on the carrying amount applying the effective interest method.

Capital reserve - own shares

DP Poland plc shares which are held within the Company's employee benefit trust, for the purpose of providing share based incentives to Group employees are classified as shareholders' equity as 'Capital reserve - own shares' and are recognised at cost. No gain or loss is recognised in the income statement on the purchase or sale of such shares.

Revenue recognition

The Group recognises revenue from the following major sources:

- Corporate store sales;

- Royalties, franchise fees and sales to franchisees; and

- Rental income on leasehold property.

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer. The criteria for recognising revenues are set out in note 2.

Direct Costs

Direct costs comprises foods costs and direct store expenses.

Finance income

Income is recognised as interest accrues applying the effective interest method.

Going concern

The Directors must make an assessment as to whether the Group is a going concern. In forming their views, the Directors have prepared cash flow forecasts for a 12 month period following the date of signing the balance sheet. As part of the preparation of these forecasts, the Directors have estimated the likely outcome for the number of new stores opened. Before entering into a contract to acquire a new site, the Directors ensure that the Group has sufficient working capital available to allow the completion of the outlet. Based on these forecasts, the Directors have confirmed that there are sufficient cash reserves to fund the business for the period under review. After reviewing these forecasts, consideration of the Group's cash resources and other appropriate enquiries, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

Accounting estimates and judgements

The preparation of financial statements in conformity with UK-adopted international accounting standards requires the use of certain critical accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the Company's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements

Purchase price allocation of the acquisition of AAP

Applying IFRS 3 for accounting of acquisition required Group's judgement. The Directors have assessed the key nature and attributes of the assets of the businesses acquired and in particular the value of the separable intangible assets. The Directors have concluded that materially, the value is all attributable to the Master Franchise Agreement and are satisfied that it is appropriate to attribute the full value of the intangible asset acquired to brand value. Further details are shown in note 21.

Assessment of indefinite useful life of the Master Franchise Agreement intangible asset

Identification of Master Franchise Agreement's useful life recognised as at acquisition date of All About Pizza d.o.o. also required judgement. As there is no foreseeable limit to the period over which Master Franchise Agreement is expected to generate net cash inflows for the entity, the Group identified Master Franchise Agreement to have an indefinite useful life.

Estimation uncertainties

Impairment

The Group's determination of whether intangibles and investments in subsidiary undertaking are impaired requires an estimation of the fair value less costs of disposal of the cash generating units to which the relevant asset or investment is allocated. This requires estimation of future cash flows and the selection of a suitable discount rate. The recoverable amount of the cash generating unit has been determined based on the fair value less costs of disposal calculated using discounted future cash flows, which are subject to significant estimates due to the growth phase of the business. Future cash flows are based on the Group's business plan. The calculation of the fair value is most sensitive to the following assumptions: store performance; discount rates; store openings in Poland and Croatia; foreign exchange rates.

The discount rate reflects management's estimate of the return on capital employed for the investment in Poland. The store openings are based on the current business model being used by management, which is progressing in line with expectations. The parent company's investment in Polish subsidiaries, i.e., DP Polska S.A. and Dominium S.A., had a historical cost of £57.4m. With effect from 29 July 2022, the Company became the legal parent of All About Pizza d.o.o. The parent company's investment in Croatian subsidiary had a historical cost of £ 2.4m. Further details are shown in note 16. The Group has determined that an impairment of £26.8m in the investment value should be recognised in the accounts of DP Poland plc.

Amortised cost of sub-franchisee loan receivables and loan notes

The Group's determination of the amortised cost of sub-franchisee loan receivables at initial recognition requires the estimation of the initial fair value of the below-market rate loans provided to the franchisees. Recoverability of such loans is an ongoing estimation uncertainty and is sensitive to changes in circumstances and of forecast economic conditions. The Group's historical credit loss experience and forecast of economic conditions may also not be representative of sub-franchisees' actual default in the future.

The Group has also determined the amortised cost of borrowings, which requires the estimation of the initial fair value of the below-market rate loans provided by Malaccan Holdings. The loans have been discounted to a market rate of 5.3% calculated based on EURIBOR and additional margin, which required accounting estimates to be done. Further details are shown in note 27.

Lease liability - estimating an incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as estimation of a credit margin).

2. REVENUE

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. All of the revenue is derived in Poland and Croatia.

Corporate store sales: Contracts with customers for the sale of products to end consumers include one performance obligation. The Group has concluded that revenue from the sale of products should be recognised at a point in time when control of the goods is transferred to the consumer, which is the point of delivery or collection. Sales are recorded approximately 30 minutes before delivery or collection.

Sales of materials and services to sub-franchisees: Contracts with franchisees for the sale of products include one performance obligation, being the delivery of products to the end franchisee. The Group has concluded that revenue from the sale of products should be recognised at a point in time when control of the goods are transferred to the franchisee, generally on delivery. Revenue is recognised at the invoiced price less any estimated rebates.

Royalties received from sub-franchisees: The performance obligation relating to royalties is the use of the Domino's brand. This represents a sales-based royalty with revenue recognised at the point the franchisee makes a sale to an end consumer.

Revenue from franchisee fees: Revenue from franchisee fees is recognised when a franchisee opens a store for trading or on completion of sale of one or more stores to a third party, as this is the point at which all performance obligations have been satisfied.

Rental income on leasehold property: Rental income arising from leasehold properties where the lease is an operating lease is recognised on a straight-line basis in accordance with the lease terms. Rental payments are recognised over the period to which they relate. Under IFRS 16 'leases' rents received under finance leases are treated as capital repayments and interest receipts and are excluded from revenues.

Core revenues are ongoing revenues including sales to the public from corporate stores, sales of materials and services to sub-franchisees, royalties received from sub-franchisees and rents received from sub-franchisees. Other revenues are non-recurring transactions such as the sale of stores, fittings and equipment to sub-franchisees. Revenue recognised in the income statement is analysed as follows:

Revenue is divided into 'core revenues' and 'other revenues' as follows:

	2022	2021
	£	£
Core revenue	35,693,133	29,782,191
Other revenue	965	83,998
	35,694,098	29,866,189

Revenue is further analysed as follows:

	2022	2021
	£	£
Corporate store sales	34,299,189	28 204,421
Royalties received from sub-franchisees	220,185	1,064,338
Sales or materials and services to sub-franchises	933,038	267,017
Rental income on leasehold property	240,721	246,415
Fixtures and equipment sales to sub-franchisees	965	83,998
	35,694,098	29,866,189

Revenue by country:

	2022	2021
	£	£
Poland	34,930,108	29,866,189
Croatia	763,990	-
	35,694,098	29,866,189

3. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	2022	2021
	£	£
Selling expenses	1,350,333	1,014,155
General and administrative expenses	4,337,387	3,287,021
	5,687,720	4,301,176

4. SEGMENTAL REPORTING

The Board monitors the performance of the corporate stores and the commissary operations separately and therefore those are considered to be the Group's two operating segments. Corporate store sales comprise sales to the public. Commissary operations comprise sales to sub-franchisees of food, services and fixtures and equipment. Commissary operations also include the receipt of royalty income from sub-franchisees. The Board monitors the performance of the two segments based on their contribution towards Group EBITDA - excluding non-cash items, non-recurring items and store pre-opening expenses. In accordance with IFRS 8, the segmental analysis presented reflects the information used by the Board. No separate balance sheets are prepared for the two operating segments and therefore no analysis of segment assets and liabilities is presented.

Operating Segment contribution
	2022		2022		2022		2021		2021		2021
	£		£		£		£		£		£
	Corporate stores	Commissary		Group		Corporate stores		Commissary		Group
Revenues from external customers	34,299,189		1,394,909		35,694,098		28,204,421		1,661,768		29,866,189
Direct Costs - corporate stores	(27,893,400)						(23,791 549)
Direct Costs - commissary (variable cost only)			(419,521)						(743,105)
Store EBITDA	6,405,789						4,412,872
Commissary gross profit			975,388						918,663
Total segment profit			7,381,177						5,331,535
Unallocated expenses			(5,687,720)						(4,194,260)
GROUP EBITDA - excluding non-cash items, non-recurring items and store pre-opening expenses			1,693,457						1,137,275
Store pre-opening expenses			(37,584)						(3,429)
Other non-cash and non-recurring items			(500,971)						59,278
Depreciation and amortisation			(4,336,210)						(4,867,679)
Share based payments			(137,748)						(51,301)
Foreign exchange gains			17,406						(61,911)
Finance income			257,984						1,155,806
Finance costs			(1,258,850)						(1,669,527)
Loss before taxation			(4,302,516)						(4,301,488)

Commissary direct costs shown above do not include labour and occupancy costs. These costs are shared across both segments as the commissary supplies corporate stores as well as supplying sub-franchisees. Corporate store direct costs include all costs directly attributable to operating the stores. Store EBITDA represents corporate store sales less store food costs and direct store expenses.

The Group does not have reliance on any major customers.

5. LOSS BEFORE TAXATION

This is stated after charging

	2022	2021
	£	£

Auditors and their associates' remuneration	124,524	80,407
Directors' emoluments	273,092	188,521
Amortisation of intangible fixed assets	626,252	674,030
Depreciation of property, plant and equipment	3,709,958	2,027,915

Piotr Dzierzek was the highest paid director in 2022 with total emoluments of £72,562. 3,500,000 share options have been granted to Piotr Dzierzek in November 2022 in accordance with Share Option Plan announced in June 2022. There are no pension contributions or defined benefit pensions attributable to Piotr Dzierzek.

6. OTHER NON-CASH AND NON-RECURRING ITEMS

	2022	2021
	£	£

Acquisition - advisors and other expenses	(61,225)	(70,320)
Leasehold overtaken	-	122,905
IFRS 16 adjustment - impairment	(609,320)	-
IFRS 16 adjustment - other	33,416	220,014
Discount settlements on supplier agreement termination	-	252,004
VAT refund	182,535	-
Other non-cash and non-recurring items	(46,377)	(465,325)

	(500,971)	59,278

Other non-cash and non-recurring Items

Other non-cash and non-recurring items include items, which are not sufficiently large to be classified as exceptional, but in the opinion of the Directors, are not part of the underlying trading performance of the Group.

IFRS 16 adjustment - impairment refers to right of use assets write-off due to potential store closures in 2023. IFRS 16 adjustment - other refers to movements in right of use assets due to changes in lease agreement periods in 2022 and 2021 as well as discounts received in 2021 for the COVID-19 lockdown periods. The other non-cash and non-recurring items position in 2022 includes gains and losses from the sale and liquidation of fixed assets, provision for dismantling of stores and other items. The other non-cash and non-recurring items in 2021 include conversion costs results from reverse acquisition, losses from the liquidation of fixed assets and other items.

7. STAFF COSTS

Details of directors' remuneration, which is included in the amounts below, are given in the remuneration report.

	2022	2021
	£	£

Zero hours contracts in stores	9,412,583	6,902,503
Wages and salaries and directors' fees	2,452,567	2,359,144
Social security costs	371,871	500,177
Share based payments	137,748	51,301
	12,374,769	9,813,125

The average monthly number of employees during the year was as follows:

	2022	2021
	Number	Number
Operational	179	243
Administration	35	44
Total	214	287

8. FINANCE INCOME

	2022	2021
	£	£

VAT refund - interests	231,476	-
Unwinding of discount on loans to sub-franchisees	9,417	13,059
Finance income on loans to sub-franchisees	16,767	26,131
Interest on short-term deposits	-	3,811
Other finance income	324	1,112,805

	257,984	1,155,806

Other finance income in 2021 mainly comprises loans written off in Dominium S.A. as a result of the refinancing for the reverse acquisition.

9. FINANCE COSTS

	2022	2021
	£	£

Interest expense on lease liabilities	665,084	742,862
Other interest	593,766	926,665

	1,258,850	1,669,527

Other interest in 2022 mainly comprises interest payable according to loan note issued to Malaccan Holdings Ltd.

10. TAXATION

	2022	2021
	£	£

Current tax	-	-
Deferred tax expense relating to recognition of deferred tax liability	57,429	58,983
Other taxes	-	-

Total tax charge in income statement	57,429	58,983

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the tax rate applicable to profits of the consolidated entities as follows:

	2022	2021
	£	£
Loss before tax	(4,302,516)	(4,301,488)

Tax credit calculated at applicable rate of 19%	(817,478)	(817,283)
Income taxable but not recognised in financial statements	97,402	312,041
Income not subject to tax	(570,648)	(647,083)
Expenses not deductible for tax purposes	2,234,215	1,196,148
Tax losses for which no deferred income tax asset was recognised	(886,062)	15,160

Total tax charge in income statement	57,429	58,983

The Directors have reviewed the tax rates applicable in the different tax jurisdictions in which the Group operates. They have concluded that a tax rate of 19% represents the overall tax rate applicable to the Group.

11. LOSS ATTRIBUTABLE TO MEMBERS OF PARENT COMPANY

The loss relating to transactions in the financial statements of the parent company was £27,401,465 (2021: £11,557,307).

12. LOSS PER SHARE

The loss per ordinary share has been calculated as follows:

	2022	2022	2021	2021
	£	£	£	£
	Weighted average number of shares	Profit / (loss) after tax	Weighted average number of shares	Profit / (loss) after tax
Basic	653,776,085	(4,359,945)	578,123,216	(4,360,471)
Diluted	653,776,085	(4,359,945)	578,123,216	(4,360,471)

The weighted average number of shares for the year excludes those shares in the Company held by the employee benefit trust. At 31st December 2022 the basic and diluted loss per share is the same, as the vesting of JOSS, SIP or share option awards would reduce the loss per share and is, therefore, anti-dilutive.

13. GOODWILL

Cost					Group
					£
At 31 December 2020					2,881,283
Additions					12,127,453
At 31 December 2021					15,008,736

Additions					-
Foreign exchange movements					102,266
At 31 December 2022					15,111,002

Carrying amount					Group
					£
At 31 December 2022					15,111,002

The goodwill recognised by the accounting acquirer is equal to the consideration (as determined under IFRS 3) which was paid by the accounting acquirer less the fair value of the assets and liabilities acquired with the accounting acquiree. The goodwill recognised is allocated to Polish entities cash generating unit and is made up by the expected synergies of the enlarged business and management expertise brought by new Chief Executive Officer and Non-Executive Director to DP Poland PLC's business.

In accordance with IAS 36 the Group has performed impairment review of goodwill at the reporting period end. The impairment test has been undertaken by assessment recoverable amount of the CGU to which the goodwill has been allocated, against the carrying value of this CGU. The review included discounted cash flow projections to determine the recoverability of goodwill and the intangible assets. We compared the carrying amount of the assets, inclusive of assigned goodwill, to its respective fair value less costs of disposal. Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, but are not limited to, prospective financial information, growth rates, terminal value and discount rates. Prospective sales and costs forecasts are made for the following five years (i.e., FY23-FY27) and are based on market-available data with regard to country GDP growth rates, inflation, price trends of main cost items, as well as on historical level of sales volumes and incurred costs as a percentage of sales, taking into account implemented High Volume Mentality, digital platform development and increased focus on operations excellence. The discount rate is reviewed annually to take into account the current market assessment of the time value of money and the risks specific to the CGU and rates used by comparable companies. The discount rate used to calculate fair value is declining from 13.6% in FY23 to 10.6% in FY27 (i.e., 13.6% in FY23, 12.9% in FY24, 12.1% in FY25, 11.3% in FY26 and 10.6% in FY27 and beyond). Costs are reviewed for inflation and other cost pressures. The long term growth rate used was 3%. Based on this quantitative test, we determined that the fair value of assets including goodwill exceeded its carrying amount. After completing our annual impairment reviews we concluded that goodwill was not impaired.

The following sensitivities have been performed:

- Poland: a 0.5% decrease in the growth rate would result in the carrying amount of the goodwill value being greater than the recoverable amount. A 0.5% increase in discount rate would result in the carrying amount of goodwill value being greater than the recoverable amount.

- Croatia: The recoverable amount is not deemed to be sensitive to a decrease in growth rate, as decreasing by 1% would still leave headroom between the carrying value of the goodwill and the recoverable amount. A 1% increase in discount rate would result in the carrying amount of goodwill value being greater than the recoverable amount.

14. INTANGIBLE ASSETS

	Franchise fees		Capitalised
	and intellectual	Software	loan	Total
	property rights		discount
Group	£	£	£	£

Cost:
At December 2020	4,595,235	323,956	-	4,919,191
Acquisition of business	883,853	85,957	59,854	1,029,664
Foreign exchange movements	(391,076)	(55,389)	(17,865)	(464,330)
Additions	149,125	208,004	21,512	378,641
Disposals	(42,717)		(89,294)	(132,011)
At 31 December 2021	5,194,420	562,528	(25,793)	5,731,155
Acquisition of business - AAP	1,471,428	282,589	-	1,754,017
Foreign exchange movements	195,567	142,990	5,542	344,519
Additions	62,831	241,032	-	303,863
Disposals	-	-	-	-
At 31 December 2022	6,924,665	1,229,139	(20,250)	8,133,555

Amortisation
At December 2020	2,945,787	322,357	-	3,268,144
Foreign exchange movements	(250,900)	(61,675)	(11,468)	(324,043)
Amortisation charged for the year	524,397	138,097	11,536	674,030
Disposals	(15,139)	-	(79,285)	(94,423)
At 31 December 2021	3,204,145	398,779	(79,217)	3,523,706
Foreign exchange movements	171,673	93,436	4,009	269,118
Amortisation charged for the year	527,030	90,278	8,944	626,252
Disposals	-	-	-	-
At 31 December 2022	3,902,848	582,493	(66,264)	4,419,077

Net book value:
At 31 December 2022	3,021,817	646,646	46,014	3,714,479
At 31 December 2021	1,990,275	163,749	53,424	2,207,448

Franchise fees consisting of the cost of purchasing the Master Franchise Agreement (MFA) from Domino's Pizza Overseas Franchising B.V. have been capitalised in 2021 and are written off over the term of the MFA. As at 31.12.2022 net book value of MFA amounted to £492,267 with remaining amortization period of 13 years. Master Franchise Agreement between AAP and Domino's Pizza International Franchising Inc. have been capitalized in 2022 and is measured at cost less any accumulated impairment losses. As there is no foreseeable limit to the period over which Master Franchise Agreement is expected to generate net cash inflows for the entity, the Group identified Master Franchise Agreement to have an indefinite useful life. MFA is allocated to AAP cash generating unit. Net book value of AAP MFA amounted to £1,275,612 as at 31.12.2022. The difference between the present value of loans to sub-franchisees recognised and the cash advanced has been capitalised as an intangible asset and are amortised over the life of sub-franchise agreements of 10 years. The amortisation of intangible fixed assets is included within administrative expenses in the Income Statement. The Group has performed an annual impairment test for the franchise fees and loan discounts and the recoverable amount of Polish and Croatian cash generating units have been determined based on fair value calculated using discounted future cash flows based on the business plan, and incorporating the Directors' estimated discount rate (10.6% in FY27 and beyond for Polish CGU and 12.5% in FY27 and beyond for AAP CGU), future store openings and the average Polish Zloty and Croatian Kunas exchange rate for the year ended 31 December 2022. The fair value calculation indicates that no impairment is required. As at 31 December 2022, no reasonably anticipated change in the assumptions would give rise to a material impairment charge.

15. PROPERTY, PLANT AND EQUIPMENT

		Fixtures	Assets
	Leasehold	fittings and	under
	improvements	equipment	construction	Total
Group	£	£	£	£

Cost:
At December 2020	5,926,817	2,280,324	19,089	8,226,230
Acquisition of business	3,634,600	2,124,650	19,658	5,778,908
Foreign exchange movements	(849,042)	(545,878)	(2,862)	(1,397,782)
Additions	766,548	392,046	392,169	1,550,763
Disposals	(781,849)	(222,194)	-	(1,004,043)
Transfers	27,912	380,569	(408,481)	-
At 31 December 2021	8,724,986	4,409,517	19,573	13,154,076
Acquisition of business - AAP	341,007	270,218	-	611,225
Foreign exchange movements	413,953	388,155	8,324	810,432
Additions	196,617	272,251	603,943	1,072,811
Disposals	(813,019)	(278,656)	-	(1,091,675)
Transfers	158,339	243,548	(401,887)	-
At 31 December 2022	9,021,883	5,305,033	229,953	14,556,869

Depreciation:
At December 2020	4,779,361	2,157,479	-	6,936,840
Foreign exchange movements	(509,507)	(398,978)	-	(908,485)
Depreciation charged for the year	924,736	1,103,179	-	2,027,915
Impairment	-	(262,089)	-	(262,089)
Disposals	(590,478)	(184,724)	-	(775,202)
At 31 December 2021	4,604,112	2,414,867	-	7,018,979
Foreign exchange movements	265,301	307,049	-	572,350
Depreciation charged for the year	800,829	636,978	-	1,437,807
Other adjustments	(99,303)	-	-	(99,303)
Disposals	(747,750)	(270,517)	-	(1,018,267)
At 31 December 2022	4,823,189	3,088,377	-	7,911,566

Net book value:
At 31 December 2022	4,198,693	2,216,655	229,953	6,645,301
At 31 December 2021	4,120,874	1,994,650	19,573	6,135,097

The depreciation of property, plant and equipment is included within direct and administrative expenses in the Income Statement.

16. NON CURRENT ASSET INVESTMENTS

	Group	Company
	£	£

Investments in Group undertakings
At 31 December 2020	-	28,660,000
Investment in subsidiary company - shares subscribed - Dominium S.A.	-	34,241,330
Investment in subsidiary company - capital contribution	-	19,267
Impairment charge	-	(11,130,429)

At 31 December 2021	-	51,790,168

Investment in subsidiary company - shares subscribed - DP Polska S.A.	-	4,703,100
Investment in subsidiary company - shares subscribed - All About Pizza d.o.o.	-	2,382,979
Investment in subsidiary company - shares subscribed - Dominium S.A.	-	805,820
Investment in subsidiary company - capital contribution	-	65,433
Impairment charge	-	(26,781,124)

At 31 December 2022	-	32,966,376

Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid.

The parent company's investment in Polish subsidiaries, i.e., DP Polska S.A. and Dominium S.A., have a historical cost of £57.4m prior to the impairment review. The impairment test carried out showed that the investment was impaired and the carrying value after impairment was £30.6m. With effect from 29 July 2022, the Company became the legal parent of All About Pizza d.o.o. The parent company's investment in Croatian subsidiary had a historical cost of £2.4m. The Group has determined that an impairment of £26.8m in the investment value should be recognised in the accounts of DP Poland plc. The impairment assessment brought investments in subsidiary down to £33.0m and was arrived at by fair value calculated using discounted future cash flows.

The Company holds 20% or more of the share capital of the following companies, which are included in the consolidation:

Company	Nature of business	Location	Class	% holding
DP Polska S.A.	Operation of Pizza delivery and dine-in restaurants	Poland	Ordinary	100
Dominium S.A.	Operation of Pizza delivery and dine-in restaurants	Poland	Ordinary	100
All About Pizza d.o.o.	Operation of Pizza delivery and dine-in restaurants	Croatia	Ordinary	100

The registered office of DP Polska S.A. and Dominium S.A. is: 30 Dabrowiecka Street, 03-932 Warsaw, Poland.

The registered office of All About Pizza d.o.o. is: 1 Kneza Mislava Street, Zagreb, Croatia.

The acquisition of Dominium S.A. was completed on 8th January 2021. The acquisition of All About Pizza d.o.o. was completed on 29th July 2022 - further details are given in note . All About Pizza's business is the operation of delivery and dine-in pizza restaurants.

17. LOANS GRANTED TO SUBSIDIARY UNDERTAKINGS

The Company has provided €200k loan to AAP in August 2022 following the acquisition. The loan is repayable by 31.12.2024, is unsecured with 3% interest payable and have been discounted to a market rate of 5.3% in accordance with IFRS 9.

18. DEFERRED TAX

The Group has unused tax losses of £17,702,039 available for offset against future profits. Polish tax losses are only recognised for deferred tax purposes to the extent that they are expected to be used to reduce tax payable of future profits. Under Polish law, losses can only be carried forward for five years and only 50% of the losses brought forward can be set off in any one year. Polish tax losses expire as follows: £3,719,946 in 2023; £32,888,786 in 2024; £2,166,198 in 2025; £1,142,536 in 2026 and £419,892 in 2027. UK tax losses carried forward at the balance sheet date were £6,596,996. AAP tax losses carried forward at the balance sheet date were £767,685.

	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£
Deferred tax liability


Deferred tax liability
Property, plant and equipment	(120,226)	(56,200)	-	-
Intangible assets	(149,651)	(150,049)	-	-
Interest on loans	(5,826)	(7,548)
Accruals	(396)	-
	(276,099)	(213,797)	-	-

Movements in deferred tax

	Property, plant and equipment	Intangible assets	Interest on loans	Accruals

					Total
	£	£	£	£	£
At 31 December 2021	(56,200)	(150,049)	(7,548)	-	(213,797)
Credited to equity	(4,368)	(299)	(191)	(15)	(4,873)
Credited to profit and loss	(59,658)	697	1 913	(381)	(57,429)
At 31 December 2022	(120,226)	(149,651)	(5,826)	(396)	(276,099)

19. TRADE AND OTHER RECEIVABLES

	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£

Current
Trade receivables	482,382	362,407	-	-
Trade receivables from subsidiaries	-	-	67,246	396,000
Other receivables	903,114	635,420	11,295	25,594
Prepayments and accrued income	581,491	221,620	68,440	-
	1,966,987	1,219,447	146,981	421,594
Non-current

Other receivables	822,042	820,871	-	-
At 31 December 2022	2,789,029	2,040,318	146,981	421,594

Other non-current receivables include loans to sub-franchisees which are repayable over between four and nine years. Other current receivables include loans to sub-franchisees repayable over less than one year. Repayments may be made earlier in the event that sub-franchised stores achieve certain turnover targets earlier than expected. The loans are secured by a charge over certain assets of the sub-franchisees. Other current receivables also includes Polish and Croatian value added tax recoverable in future periods. No receivables are materially past due date. Other than amounts held by the Company, all trade and other receivables are in Polish Zloty and Croatian Kuna. Trade receivables are non - interest bearing and are generally on 0 - 30 days terms.

20. INVENTORIES

	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£
Raw materials and consumables	982,110	667,898	-	-
At 31 December	982,110	667,898	-	-

The cost of inventories recognised as an expense and included in cost of sales amounted to £9,703,447 (2021: £7,573,606).

21. ACQUISITION OF ALL ABOUT PIZZA D. O. O.

With effect from 29 July 2022, the Company became the legal parent of All About Pizza d. o.o. All About Pizza d.o.o signed a Franchise Agreement with Domino's Pizza International Franchising Inc. in July 2019 to operate Domino's stores in Croatia and operated three corporate stores in Zagreb at the date of transaction.

The Company has entered into a Share Purchase Agreement to acquire All About Pizza d.o.o for approximately £2.4 million satisfied by the issue of 29,787,234 Consideration Shares at 8 pence per share. In addition, Andrew Rennie, has subscribed for 2,127,660 First Subscription Shares, at a price of 8 pence per share, and will subscribe for a further 3,191,489 Second Subscription Shares, at a price of 8 pence per share, within 12 months following completion of the Transaction.

Further to the completion of the acquisition of All About Pizza d.o.o. Nils Gornal, Chief Executive Officer of All About Pizza d.o.o., and Andrew Rennie, ex-CEO of Domino's Pizza Enterprises in Europe, were appointed as Chief Executive Officer and Non-Executive Director of DP Poland PLC, respectively.

The fair value of the assets and liabilities acquired by the accounting acquirer are as follows:

	Note	29 July 2022
		£
Intangible assets		478,406
Tangible fixed assets		611,225
Leases - right of use assets		267,877
Inventories		41,303
Trade and other receivables		65,180
Cash and cash equivalents		22,828
Trade and other payables		(37,504)
Borrowings		(192,687)
Lease liabilities		(267,877)
Total identifiable net assets		988,751
	14
Master Franchise Agreement	14	1,275,611
Consideration paid by the accounting acquirer		2,264,362

AAP revenue post-acquisition		763,990
AAP PBT post-acquisition		(267,973)

Acquisition expenses

The advisors' and other costs incurred by DP Poland PLC in acquiring All About Pizza d.o.o. amounted to £57,564 in 2022.

Intangible assets

Intangible assets acquired relate to: software and entry fee for lease agreement for one of the stores of AAP.

Tangible fixed assets

Tangible fixed assets include: leasehold improvements, equipment (i.e., restaurant, computer and office equipment) and e-bikes.

Trade and other receivables

The Directors consider that the gross contractual amounts of trade and other receivables are not materially different to the fair values.

Borrowings

Borrowings of All About Pizza represent liabilities for financial loans to previous shareholders, which has been repaid after the completion of transaction.

Master Franchise Agreement

An excess of consideration (as determined under IFRS 3) which was paid by the accounting acquirer over the fair value of the assets and liabilities acquired was attributed to Master Franchise Agreement (MFA). The Group has performed impairment review of MFA at the reporting period end. The review included discounted cash flow projections to determine the recoverability of MFA and the intangible assets. We compared the carrying amount of the assets, inclusive of MFA, to its respective fair value calculated as the recoverable amount of Croatian cash generating unit using discounted future cash flows based on the business plan and future store openings. Significant assumptions inherent in the valuation methodologies are employed and include, but are not limited to, prospective financial information, 2.5% growth rate, terminal value and discount rates declining from 13.7% in FY23 to 12.5% in FY27 (i.e., 13.7% in FY23, 13.4% in FY24, 13.1% in FY25, 12.8% in FY26 and 12.5% in FY27 and beyond). Based on this quantitative test, we determined that the fair value of assets exceeded its carrying amount. After completing our annual impairment reviews we concluded that MFA was not impaired.

22. LEASES

GROUP AS A LESSEE

Right of Use Assets

	Leasehold
	property	Total
Cost:	£	£
At 31 December 2020	7,182,238	7,182,238
Acquisition of business	5,173,815	5,173,815
Foreign exchange movements	(1,190,615)	(1,190,615)
Additions	2,811,295	2,811,295
Adjustment to right-of-use asset lease term	599,283	599,283
Disposals	(244,793)	(244,793)
At 31 December 2021	14,331,223	14,331,223
Acquisition of business	267,877	267,877
Foreign exchange movements	654,739	654,739
Additions	655,352	655,352
Adjustment to right-of-use asset lease term	(51,773)	(51,773)
Disposal	(666,255)	(666,255)
At 31 December 2022	15,191,163	15,191,163

Accumulated depreciation
At 31 December 2020	2,959,736	2,959,736
Foreign exchange movements	(605,447)	(605,447)
Adjustment to right-of-use asset lease term	1,464,104	1,464,104
Disposal	(152,464)	(152,464)
Charge for the year	2,427,823	2,427,823
At 31 December 2021	6,093,752	6,093,752
Foreign exchange movements	430,854	430,854
Adjustment to right-of-use asset lease term	524,131	524,131
Disposal	(602,689)	(602,689)
Charge for the year	2,272,151	2,272,151
At 31 December 2022	8,718,199	8,718,199

Carrying amount
At 31 December 2022	6,472,965	6,472,965
At 31 December 2021	8,237,471	8,237,471

At the Balance sheet date, the Group's portfolio of leases consisted of 119 leases over 116 store premises, one office and three commissaries. Leases generally have an initial term of 10 years, with an option to extend for an additional period of between 5 and 10 years. The depreciation of Right of Use Assets is included within direct and administrative expenses in the Income Statement. Rents payable are generally reviewed at five year intervals. The adjustment to right-of-use asset lease term is related to the review of the terms of lease agreements and represents right of use assets write-off due to potential store closures in 2023. Please also refer to note 6.

	2022	2021
Amounts recognised in profit and loss	£	£

Depreciation expense on right-of-use assets	2,272,151	2,427,823
Interest expense on lease liabilities	665,084	742,863

	2022	2021
	£	£
The total cash outflow for leases amounted to	3,116,715	3,231,486

GROUP AS A LESSOR

The Group enters into lease agreements as an intermediate lessor with respect to stores operated by sub-franchisees. These leases have terms of between 1 and 5 years with a 5 year extension option, but no longer than the term of the main lease agreement. The lessee does not have an option to purchase the property at the expiry of the lease period. Rental income recognised by the Group during the year is £240,721 (2021: £246,415).

Future minimum rentals receivable under non-cancellable operating leases as at 31 December are, as follows:

	2022	2021
Maturity analysis	£	£
Within one year	102,047	100,339
1 - 2 years	92,781	98,550
2 - 3 years	92,781	89,601
3 - 4 years	46,308	89,601
4 - 5 years	15,390	44,720
Onwards	-	14,863
At 31 December	349,307	437,674

23. LEASE LIABILITIES

	2022	2021
	£	£
Total lease liabilities	8,501,171	9,705,438


Analysed as:
Non-current	5,666,835	7,038,279
Current	2,834,336	2,667,159

	2022	2021
Maturity analysis	£	£
Within one year	2,834,336	2,678,292
1 - 2 years	2,199,312	2,310,187
2 - 3 years	1,802,235	1,787,291
3 - 4 years	1,056,548	1,506,870
4 - 5 years	363,632	1,061,573
5 - 6 years	125,686	259,627
Onwards	119,422	101,598

For the year ended 31 December 2022, the average effective borrowing rate was 8.63 per cent. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations are denominated in Polish Zloty or Euros.

The fair value of the Group's lease obligations as at 31 December 2022 is estimated to be £8,501,171 using 8.63% discount rate. This is based on the rate for Polish Government bonds with a similar maturity to the lease terms and adding a credit margin that reflects the secured nature of the lease obligation.

The Group's obligations under leases are secured by the lessors' rights over the leased assets.

24. EQUITY

"Called up share capital" represents the nominal value of equity shares issued. An increase in share capital in 2022 is due to the increase in share capital for Dominium S.A., the increase in share capital for DP Polska S.A. and the increase in share capital for the acquisition of All About Pizza d.o.o.

"Share premium account" represents the premium paid on the Company's 0.5p Ordinary shares.

"Capital reserve - own shares" represents the cost of shares repurchased and held in the employee benefit trust (EBT).

"Retained earnings" represents retained losses of the Group.

"Merger relief reserve" represents the excess of the value of the consideration shares issued to the shareholders upon the reverse takeover and acquisition of All About Pizza d. o.o. over the fair value of the assets acquired.

"Reverse Takeover reserve" represents the accounting adjustments required to reflect the reverse takeover upon consolidation.

"Currency translation reserve" represents exchange differences arising from the translation of the financial statements of the Group's foreign subsidiaries.

25. CASH AND CASH EQUIVALENTS

	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£
Cash at bank and in hand	4,110,322	2,701,646	65,293	302,509
At 31 December	4,110,322	2,701,646	65,293	302,509

26. TRADE AND OTHER PAYABLES

	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£
Current
Trade payables	3,032,651	3,248,333	14,189	54,669
Other payables	335,729	546,734	-	6,667
Accrued expenses	1,974,648	1,188,598	79,889	69,333
At 31 December	5,343,028	4,983,665	94,078	130,669

Dismantling provision for the stores closed in 2022 amounting to £21,294 is included within Accrued expenses and provisions as 31 December 2022.

27. BORROWINGS


	Group	Group	Company	Company
	2022	2021	2022	2021
	£	£	£	£
Non current interest bearing loans and borrowings
Borrowing	6,763,297	5,829,461	6,734,149	5,829,461
At 31 December	6,763,297	5,829,461	6,734,149	5,829,461

As part of the reverse acquisition DP Poland PLC (the legal acquirer) issued a €1.3million loan note in favour of Malaccan Holdings Ltd the former owner of Dominium S.A.. In addition, outstanding debt of €6.2 million (approximately £5.6 million) that was previously due from Dominium to Malaccan Holdings under certain existing Shareholder Loans was converted into a further unsecured loan note of €6.2 million being issued to Malaccan Holdings on the same terms and in substitution for that outstanding debt. In aggregate, therefore, €7.5 million Loan Notes were issued by DP Poland plc and remain outstanding to Malaccan Holdings upon completion of the acquisition of Dominium S.A.. The loans are repayable as at 31.12.2024, is unsecured with 3% interest payable and have been discounted to a market rate of 5.3% in accordance with IFRS 9.

28. ANALYSIS OF MOVEMENTS IN NET FUNDS

	01 January	Acquisition	Cash	Non	Foreign	31 December
	2021		flows	cash	exchange	2021
				movements	movements
	£	£	£	£	£	£
Cash and cash equivalents	34,651	1,336,256	1,330,739	-	-	2,701,646
Borrowings	(5,966,881)	(1,107,409)	-	834,925	409,904	(5,829,461)
Lease liabilities - current	(1,515,523)	(1,027,332)	273,023	(397,327)	-	(2,667,159)
Lease liabilities - non-current	(3,313,908)	(5,377.057)	3,201,833	(1,549,147)	-	(7,038,279)
Net debt	(10,761,661)	(6,175,542)	4,805,595	(1,111,549)	409,904	(12,833,253)


	01 January	Acquisition	Cash	Non	Foreign	31 December
	2022		flows	cash	exchange	2022
				movements	movements
	£	£	£	£	£	£
Cash and cash equivalents	2,701,646	22,828	1,469,203	-	(83,355)	4,110,322
Borrowings	(5,829,461)	(192,687)	163,539	(565,567)	(339,121)	(6,763,297)
Lease liabilities - current	(2,667,159)	(66,604)	11,068	(111,641)	-	(2,834,336)
Lease liabilities - non-current	(7,038,279)	(152,249)	2,057,880	(534,187)	-	(5,666,835)
Net debt	(12,833,253)	(388,712)	3,701,690	(1,211,395)	(422,476)	(11,154,146)

29. FINANCIAL INSTRUMENTS

Categories of financial instruments

	2022	2022	2021	2021
	Financial assets at amortised cost	Financial liabilities at amortised cost	Financial assets at amortised cost	Financial liabilities at amortised cost
	£	£	£	£
GROUP
Financial Assets
Cash and cash equivalents	4,110,322		2,701,646
Trade receivables	482,382		362,407
Other receivables - current	903,114		635,420
Other receivables - non current	452,125		463,800
Total	5,947,943		4,163,273

Financial Liabilities
Trade payables		(3,032,651)		(3,248,333)
Borrowing		(6,763,297)		(5,829,461)
Other liabilities - current		(335,729)		(546,734)
Lease liabilities - current		(2,834,336)		(2,667,159)
Lease liabilities - non current		(5,666,835)		(7,038,279)
Accruals - current		(1,974,648)		(1,188,598)
Total		(20,607,496)		(20,518,564)
Net		(14,659,553)		(16,355,291)

COMPANY
Financial Assets
Cash and cash equivalents	65,293		302,509
Trade receivables	67,246		396,000
Other receivables	79,735		25,894
Total	212,274		724,403

Financial Liabilities
Trade payables		(14,189)		(54,669)
Other liabilities - current		-		-
Accruals		(79,889)		(69,333)
Borrowings		(6,734,149)		(5,829,461)
Total		(6,828,227)		(5,953,463)
Net		(6,615,953)		(5,229,060)

The fair value of the Group's financial assets and liabilities is not considered to be materially different from the carrying amount as set out above. No financial assets are significantly past due or impaired.

Maturity of the Group's financial liabilities

	2022	2022	2022	2022	2021	2021	2021	2021
	Finance leases	Trade and other payables	Borrowings	Total	Finance leases	Trade and other payables	Borrowings	Total
	£	£	£	£	£	£	£	£
Due within one year	2,834,336	5,343,028	-	8,177,364	2,678,292	4,983,665	-	7,661,957
Due within two to five years	5,421,727	-	7,055,733	12,477,460	6,665,921	-	6,365,306	13,031,227
Due after five years	245,108	-	-	245,108	361,225	-	-	361,225
	8,501,171	5,343,028	7,055,733	20,899,932	9,705,438	4,983,665	6,365,306	21,054,409

Capital Risk Management

The Company and the Group aim to manage its overall capital so as to ensure that companies within the Group continue to operate as going concerns, whilst maintaining an optimal capital structure to reduce the cost of capital.

The Company's and the Group's capital structure represent the equity attributable to shareholders of the company together with borrowings and cash and cash equivalents.

Market risk

Market risk is the risk that arises from movements in stock prices, interest rates, exchange rates, and commodity prices. Market risk for the 31 December 2022 year end is reflected within the currency risk and interest rate risk which are discussed further below.

Currency Risk

The foreign currency risk stems from the Company and the Group's foreign subsidiary which trades in Poland and Croatia and whose revenues and expenses are mainly denominated in local currencies. Additionally, some Company and Group transactions are also denominated in US Dollar and Euro currencies. The Company and the Group are therefore subject to foreign currency risk due to exchange rate movements that will affect the Company and the Group's operating activities and the Company and the Group's net investment in its foreign subsidiary. In each case where revenues of the Group are in a foreign currency, there is a material match between the currency of each operating company's revenue stream, primary assets, debt and debt servicing (if applicable).

The carrying amount in Sterling, of the Group's foreign currency denominated monetary assets and liabilities at the reporting dates is as follows:

	2022	2021
Assets	£	£
Polish Zlotys	3,341,882	4,092,403
Euro	567,265	-
Sterling	2,915,432	-
US dollar	-	-
Croatian Kuna	74,772	-


Liabilities
Polish Zlotys	12,818,897	15,572,709
Euro	7,246,190	5,840,594
Sterling	173,967	-
US dollar	206,392	-
Croatian Kuna	162,050	-

Sensitivity analysis

The potential impact on Group net loss and equity reserves from a 20% weakening of the Polish Zloty, Euro, US dollar and Croatian Kuna against sterling affecting the reported value of financial assets and liabilities would be an increased net loss and reduction in Group reserves of £3,289,922.

					2022
					£
20% weakening of Polish Zloty					(1,895,403)
20% weakening of Euro					(1,335,785)
20% weakening of US dollar					(41,278)
20% weakening of Croatian Kuna					(17,456)
					(3,289,922)

A depreciation of 20% has been selected for the analysis as an illustration on the basis that it is a reasonable estimate of a likely market fluctuation.

An appreciation of 20% against Sterling would produce an equal and opposite effect.

Interest Rate Risk

The Company and the Group do not possess any financial instruments with floating interest rates, hence interest rate risk is not applicable to the Group.

Credit Risk

Exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, namely cash and cash equivalents, trade and other receivables and loans to sub franchisees.

The Company and the Group manage its exposure to this risk by applying Board-approved limits to the amount of credit exposure to any one counterparty and employs minimum credit worthiness criteria as to the choice of counterparty, thereby ensuring that there are no significant concentrations of credit risk.

All sub-franchisees who are provided with loans from the Group have been through the franchisee selection process, which is considered to be sufficiently robust to ensure an appropriate credit verification procedure.

The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

Impairment of financial assets

The Group recognises an allowance for expected credit losses ('ECLs') for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables the Group applies a simplified approach in calculating ECLs and recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision procedure that is based on the percentage cost if insuring its receivables against loss from default. Historic credit loss experience, adjusted for forward-looking factors specific to the debtors, the economic environment and relevant security and guarantees from sub-franchisees are also taken into account. The Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. The Group considers a financial asset in default when contractual payments are 180 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

The movement in the allowance for doubtful debts during the year is as follows:

	2022	2021
	£	£
Balance at 01 January	485,916	-
Acquisition of business	-	934,132
Impairment loss made during the year	984	222,528
Reversal of previously recognised impairment loss	(206,680)	(670,744)
Balance at 31 December	280,220	485,916

Set out below is the information about the credit risk exposure on the Group's trade receivables as at 31 December:

	Current	<30 days	30-60 days	61-90 days	>91 days	Total
	£	£	£	£	£	£
31 December 2022	392,291	85,312	3,087	108	1,584	482,382
31 December 2021	342,776	8,868	988	77	9,698	362,407

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Surplus funds are invested on a short term basis at money market rates and therefore such funds are available at short notice.

30. SHARE CAPITAL

			2022	2021
			£	£
Called up, allotted and fully paid:
712,393,662 (2021: 619,586,515)	Ordinary shares of 0.5 pence each		3,561,969	3,097,933

Movement in share capital during the period
			Nominal
		Number	value	Consideration
			£	£
At 31 December 2020		254,108,324	1,270,542	40,695,667

Placing January 2021		327,516,661	1,637,583	26,201,333
Placing November 2021		37,500,000	187,500	3,000,000
Share options exercised 2021		461,530	2,308	2,308

At 31 December 2021		619,586,515	3,097,933	69,899,308


Placing August 2022		91,414,894	457,074	7,313,192
Share options exercised 2022		829,753	4,149	4,149
Management share award		562,500	2,813	45,000
Transaction costs		-	-	(131,000)


At 31 December 2022		712,393,662	3,561,969	77,130,649

The Company does not have an authorised share capital. The ordinary shares carry one voting right per share and no right to fixed income.

DP Poland Employee Benefit Trust ("EBT")

The trustee of the EBT holds 1,765,872 ordinary shares in the Company for the purposes of satisfying outstanding and potential awards under the Company's Joint Ownership Share Scheme, Share Option Scheme and the Share Incentive Plans. The historic cost of these shares was £51,565 with a net contribution of £6,115 made by the JOSS award holders to acquire their joint interests. The shares held by the EBT had a market value of £147,450 at 31 December 2022.

31. SHARE BASED PAYMENTS

		Group	Group
		2022	2021
		£	£
Share based payments expense		137,748	51,301

The Company has provided four types of share-based incentive arrangements.
Type of arrangement	Vesting period	Vesting conditions
Joint Ownership Share Scheme	2.5 - 3.5 years	Achievement of store growth and financial targets
Employee Share Incentive Plan	2 years	Two years service

Non-Executive Directors' Share Incentive Plan	2 years	Two years service
Employee Share Option Plan	Variable	Detailed individual performance targets

Long Term Incentive Option Plan	2-3 years	Detailed company performance targets

Share Option Plan	1-4 years	Time-vest and detailed company performance indicators

The Company established the Joint Ownership Share Scheme ("JOSS") and the Share Incentive Plans on 25 June 2010, the Employee Share Option Plan on 06 May 2011, the Long Term Incentive Share Option Plan on 19th December 2014 and the Share Option Plan on 13 June 2022. The Group has calculated charges for the JOSS and share option awards using a Black-Scholes model. Volatility and risk free rates have been calculated for each JOSS grant based on expected volatility over the vesting period and current risk free rates at the time of each award. Volatility assumptions are estimates of future volatility based on historic volatility and current market conditions .

Assumptions used in the valuation of share option awards were as follows:

Award date	Exercise price	Expected volatility	Risk free rate	Expected dividends	Option life in years	IFRS2 fair value per share option

28 February 2022	8 pence	50%	1,20%	-	3 Years	£0.0228
14 June 2022	8 pence	50%	2,30%	-	1 Year	£0.0183
14 June 2022	8 pence	50%	2,30%	-	4 Years	£0.0217
08 November 2022	8 pence	50%	3,50%	-	1 Year	£0.0336
08 November 2022	8 pence	50%	3,50%	-	4 Years	£0.0380
01 December 2022	8 pence	50%	3,20%	-	1 Year	£0.0422
01 December 2022	8 pence	50%	3,10%	-	4 Years	£0.0468

The share based payments charge for the year by scheme was as follows:

	2022	2021
Share Incentive Plan	-	-
Other Share Options	137,748	51,301
Long Term Incentive Share Option Plan	-	-
	137,748	51,301

All of the above amounts related to equity-settled share based payment transactions.

Share scheme awards outstanding
Scheme and date of award	Hurdle or exercise price	Outstanding 31.12.21 No.	Awarded in period No.	Exercised in period No.	Lapsed in period No.	Outstanding 31.12.22 No.
JOSS 25 June 2010	23.08 pence + 3% per annum	283,936	-	-	-	283,936
SIP 27 July 2010	n/a	100,000	-	-	-	100,000
SIP 30 May 2012	n/a	75,000	-	-	-	75,000
SIP 19 June 2013	n/a	279,221	-	-	-	279,221
SIP 18 June 2014	n/a	413,604	-	-	-	413,604
SIP 17 April 2015	n/a	486,486	-	-	-	486,486
SIP 03 May 2016	n/a	346,154	-	346,154	-	-
SIP 24 May 2017	n/a	191,490	-	-	-	191,490
SIP 24 May 2018	n/a	173,913	-	173,913	-	-
Share options 03 May 2016	0.5 pence	-	-	-	-	-
Share options 22 May 2017	0.5 pence	164,804	-	-	-	164,804
Share options 11 January 2018	0.5 pence	24,000	-	-	-	24,000
Share options 01 June 2018	0.5 pence	88,238	-	-	-	88,238
Share options 11 October 2018	0.5 pence	355,469	-	226,563	-	128,906
Stock option plan 28 February 2022	8 pence	-	750,000	-	-	750,000
Stock option plan 14 June 2022	8 pence	-	24,640,175	-	-	24,640,175
Stock option plan 08 November 2022	8 pence	-	10,333,333	-	-	10,333,333
Stock option plan 01 December 2022	8 pence	-	3,520,025	-		3,520,025

The weighted average remaining contractual life of outstanding share options is 3.55 years (2021: 1.34 years). The number of share options exercisable at 31 December 2022 was 39,484,677 with a weighted average exercise price of 8 pence (2021: 633,122 shares with a weighted average exercise price of 0.5 pence).

32. CAPITAL COMMITMENTS

At 31 December 2022 there were no amounts contracted for but not provided in the financial statements (2021: £nil for the Group.

33. RELATED PARTY TRANSACTIONS

During the period the group and company entered into transactions, in the ordinary course of business, with other related parties. The transactions with directors of the company are disclosed in the Directors' Remuneration Report. Transactions with key management personnel (comprising the Directors and key members of management in Poland and Croatia) are disclosed below:

	Group	Group
	2022	2021
	£	£
Short-term employee benefits	387,337	271,005
Share-based payments	137,748	-
At 31 December	525,085	271,005

The Company made a charge of £75,000 to DP Polska S.A. and £75,000 to Dominium S.A. for management services provided in 2022. The balance owed by DP Polska S.A. to DP Poland plc as at 31 December 2022 was £67,246 (2021: £396,000).

The Company also has a borrowing from Malaccan Holdings Ltd. a significant shareholder which totalled £6,734,149 (2021: £5,829,461).

34. EVENTS AFTER THE BALANCE SHEET DATE

Board changes

On 20 January 2023, David Wild was appointed as an Independent Non-Executive Director and Chair of the Company.

On 31 March 2023, Peter Furlong has resigned from the Board as a Non-executive Director.

35. VAT

Dominium is a party to a number of court and administrative proceedings, the subject of which is to determine the amount of VAT paid by the company for the period 2011-2016. The disputes relate to the rate at which VAT is applied on sales made by Dominium, which is something that is affecting a number of companies operating in the fast food sector in Poland (including DP Polska). Dominium were applying a lower (5 per cent) rate of VAT on sales, whereas the tax authorities in Poland were of the opinion that a higher (8 per cent) rate should have been applied instead. As a result, Dominium have retrospectively applied the higher (8 per cent) rate for this period and have made additional VAT payments to cover the shortfall to the tax authorities in Poland. Accordingly, Dominium started to apply the higher 8 per cent rate and have sought recovery of the additional amounts paid due to the application of the higher rate. Some of the proceedings that Dominium brought have been suspended due to certain questions affecting major food service operators in Poland, which have been resolved by the European Court of Justice in favour of food service operators. In other proceedings, applications for a suspension of payment of the VAT liability arising from the increased VAT rate have been filed due to these issues and these have been approved for suspension.

The liabilities resulting from the decisions made to-date, totalling approximately PLN 7.0 million, have been paid by Dominium. The disputes regarding 2011 and 2012 years have been resolved in favour of Dominium. In 2022 Dominium has received the VAT refund for the year 2011 in the amount PLN 2,275,615 (approximately £414,011. In March 2023 Dominium has received the VAT refund for the year 2012 in the amount of PLN 1,542,405 (approximately £280,616). The whole dispute has not been resolved yet, the period 2013-2016 is still under investigation.

Under the terms of the Acquisition Agreement, one half of any amounts that have been overpaid in respect of the application of the higher VAT rate and which may be refunded by the Polish tax authorities to Dominium shall be paid by the Group to Malaccan Holdings Ltd.

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DP Poland (DPP)

Wednesday, 13th November 2024

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