Applegreen directors take 20pc pay cut as it extends credit facility

FORECOURT giant Applegreen has cut the base salaries for executive directors by around 20pc from April 1 for a period of three months.

The group has also implemented graduated salary cost reductions on a temporary basis for support staff across the organisation.

In addition, it has extended its revolving credit facility (RCF) to allow it greater liquidity flexibility as it navigates the Covid-19 crisis, according to a statement from the group.

The company has converted €52.5m of the accordion facility in its existing Applegreen banking facilities into its RCF. This represents an increase to the committed funding available for the remaining facility term through to October 2023.

However, the company does not believe it will need the extra funding.

“Whilst it is important to have additional headroom in our facilities, we do not anticipate drawing down these additional facilities,” the company said.

“We reiterate our view that we have sufficient cash to get us through this cycle based on a scenario where movement continues to be severely restricted to the end of May with the expectation that restrictions will then ease gradually before normalising in Q4.”

Applegreen added that it has “adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.”

All Applegreen sites have remained open and current trading levels are ahead of its assumptions for the second quarter of the year.

Jason Molins, analyst at Goodbody Stockbrokers, said it was a “very positive” update from Applegreen.

“While the group has further improved its liquidity position, we note that the company does not anticipate drawing down on its debt facilities as existing cash resources should be sufficient to see itself through even a prolonged recovery out to 2021,” Mr Molins said.

The recent easing of movement restrictions in each of Applegreen’s markets has, the company said, resulted in increased traffic volumes.

“The core Applegreen estate in Ireland, UK and United States is performing ahead of our original assumptions at the outset of the pandemic, and we expect to be cash positive from June onwards as working capital levels start to rebuild,” it said.

In March Applegreen temporarily reduced headcount by more than 4,800 employees in Ireland and the UK, from 11,500, under the respective government job retention schemes.

Shares in Applegreen were up marginally in afternoon trading yesterday.

The group doesn’t believe it will need the extra funding