Applegreen has ‘robust’ half year as revenue rises 27pc to €855m

APPLEGREEN chief executive Bob Etchingham has hailed a “robust” first half for the forecourt retailing group as it progresses its acquisition of a 50.1pc stake in UK motorway service operator Welcome Break.

Applegreen announced last month that it had sealed what will be a transformational €440m deal to buy the stake in Welcome Break, which operates 24 motorway service stations, two trunk road service areas and 29 travel hotels operating under the Ramada and Days Inn brands.

This month, stock market-listed Applegreen also finalised a deal in the United States, where it has leased 43 filling stations in Florida from CrossAmerica Partners.

That has extended Applegreen’s footprint in the United States to more than 120 sites along the eastern seaboard. Applegreen’s adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) rose 17pc in the first six months of 2018 to €19.4m.

Its revenue rose 27pc to €854.9m, and was 30pc higher on a constant currency basis.

Mr Etchingham said the performance had been achieved despite the ‘Beast from the East’ that dumped snow across Ireland at the end of February and early March.

In Ireland, Applegreen’s fuel revenue rose 3.8pc to €301.5m, while revenue from food sales was up 9.7pc at €39.4m.

Store sales in Ireland were 13.3pc higher at €65.4m.

Applegreen’s fuel sales in the UK outstripped those in Ireland for the first time during the period.

At the end of June, Applegreen had 184 sites in Ireland, and 112 in the UK.

The chief executive added that Applegreen is entering an “exciting phase of growth” in the UK service area market with the Welcome Break deal.

“This will be transformational for Applegreen by giving us critical mass in a key market,” he said.

To fund the deal, Applegreen has pledged to raise at least €100m and up to €140m via an equity raise.

The equity raise and acquisition of the Welcome Break stake are slated to be completed by the end of this month.

Applegreen has also secured a €300m debt facility underwritten by Natwest Markets and Lloyds. That includes a €150m revolving credit facility, and €150m term loan.

Applegreen intends to boost its stake in Welcome Break to about 70pc within about six years, and will likely ultimately ownitentirely.

The remaining shareholder in Welcome Break is a London-based investment firm Arjun Infrastructure Partners.

Welcome Break generated revenue of £723.4m (€810.7m) in the year to 28 January, and Ebitda of £66.4m (€74.4m).

Applegreen posted revenue of €1.4bn last year and adjusted Ebitda of €39.8m.

Mr Etchingham said that Applegreen has continued to expand in Ireland, the UK and the US, and added 26 sites during the first half of the year to bring the total to 368.

That doesn’t include the sites in Florida or the acquisition of seven sites in South Carolina that were secured in August.

Applegreen said that it has a “good pipeline” of further developments opportunities.