Ap­ple­green pitched more US deals

Food and ex­pand­ing fuel mar­gins drive re­tailer’s 20 per cent gross profit growth Chief ex­ec­u­tive says com­pany may go for ‘cap­i­tal-light deals with part­ners in the US’

The Irish Times - Business - - BUSINESS NEWS - JOE BREN­NAN

Fuel fore­court re­tailer Ap­ple­green has re­ceived a num­ber of deal pitches to ramp up its fledg­ling US busi­ness af­ter re­cently agree­ing to buy into 42 sites in South Carolina, ac­cord­ing to the com­pany’s new chief fi­nan­cial of­fi­cer.

Speak­ing af­ter Ap­ple­green re­ported a 20 per cent in­crease in first-half gross profit, Niall Dolan said the com­pany has ap­peared on “more radars” since agree­ing to buy the trade and cer­tain as­sets of the Brandi Group in the US two months ago in a part­ner­ship with Amer­i­can prop­erty firm Getty Realty.

The deal, due to close later this year, will see Getty buy the un­der­ly­ing 42 prop­er­ties for $70.1 mil­lion and lease them to Ap­ple­green, which is com­mit­ting just $5.4 mil­lion for the trad­ing busi­ness.

“The num­ber of op­por­tu­ni­ties we see has grown by virtue of the Brandi deal,” said Mr Dolan, who was pro­moted in­ter­nally to the fi­nance chief role in July. “How­ever, we con­tinue to be ju­di­cious in as­sess­ing th­ese.”

Ap­ple­green chief ex­ec­u­tive Bob Etch­ing­ham founded the busi­ness 25 years ago with one sta­tion in Bal­lyfer­mot in west Dublin be­fore float­ing it on the stock mar­ket in June 2015 fol­low­ing an ini­tial pub­lic of­fer­ing (IPO) in which it raised €92 mil­lion. The com­pany’s net­work grew by 32 sites dur­ing the first half of this year to 275 by the end of June.

The com­pany en­tered the UK mar­ket in 2008 and made its first foray into the US mar­ket in 2014.

As of June the com­pany had 166 sites in Ire­land, 85 in the UK and 24 in the US.

Mr Etch­ing­ham said that its grad­ual ap­proach to the US mar­ket, “very ex­pe­ri­enced and tal­ented man­age­ment team” and back­ground in food and re­tail re­la­tion­ships, in­clud­ing brands such as Burger King, make it a strong po­ten­tial part­ner for real-es­tate and pri­vate-eq­uity firms look­ing to buy fore­court sites in the US.

“For the short term, at least, we do see our­selves go­ing for Brandi-type cap­i­tal-light deals with part­ners in the US,” Mr Etch­ing­ham said.

The group’s first-half gross profit rose to €82.2 mil­lion from €68.5 mil­lion for the same pe­riod last year, helped by a re­bound in fuel mar­gins as oil prices eased back dur­ing the pe­riod.

Speak­ing sep­a­rately in a call with an­a­lysts yes­ter­day, Mr Etch­ing­ham said con­sump­tion in the UK has been af­fected as eco­nomic growth had be­come “anaemic”, while in­fla­tion had also hit spend­ing power and con­fi­dence.

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