Applegreen posts higher adjusted profits amid expansion of retail footprint
Source - SMW
Roadside retailer Applegreen posted a 14.6% rise in annual adjusted profits as revenue driven by ongoing expansion of its estate and 'strong' fuel margin performance in the fourth quarter of the year.
For the year ended 31 December 2018, adjusted profit before tax rose 14.6% to €28.3m from a year earlier and revenue jumped 40.9% to €2.01bn.
It reported like-for-like constant currency growth in fuel revenue of 5.7% and fuel gross profit of 6.8%., non-fuel (food and store) revenue of 3.3% and non-fuel gross profit of 3.1%.
'The performance was driven by ongoing expansion of our estate, positive like for like growth despite weather related disruption and strong fuel margin performance, particularly in the fourth quarter of the year,' the company said.
Fuel margin performance recovered strongly in the second half of the year in each of our three markets because of more favourable market conditions, the company added. Our non-fuel performance was underpinned by a continued focus on the Service Area segment and the enhancement of our food offering across the estate.
The reduction of dependency on fuel margins had been a key strategic priority of the business, as it lowered its contribution to overall gross profit coming from fuel with 66% of gross profit now coming from non-fuel revenue streams which is up from 63% in the prior year.
The company proposed a final dividend of 0.91 cent per share, up from 0.80 cent per share.
'The acquisition of the second largest UK Motorway Service Area operator, Welcome Break, is transformational for our business. It gives us an excellent platform to develop our Service Area business in the UK market,' said Bob Etchingham, CEO. 'The Applegreen business continued to expand in each of our three markets as we increased our estate by 130 sites to a total of 472 locations. We opened 16 new sites in the Republic of Ireland, 61 in the UK (including 43 acquired Welcome Break sites) and 53 in the US in FY2018.' 'Trading conditions remain generally good despite uncertainty caused by macro events. We anticipate another year of robust growth for the business. Our primary focus will be on the integration of Welcome Break and further reducing leverage but we will also continue to evaluate new opportunities to further expand the business in the future.'
At 9:35am: (LON:APGN) Applegreen Plc share price was 0p at 500p