Shares in roadside convenience retailer Applegreen (APGN) ticked up 2.5% to 333p on a set of first half results which revealed both the big impact from Covid-19 but also news that the business is trading ahead of expectations for the third quarter.

For the six months ended June, pre-tax losses were €29.7 million, compared with a profit of €10.2 million last year, while revenue fell 26.6% to €1.1 billion.

The company, however, observed it had seen an ongoing recovery in sales following a low in April. As was widely anticipated the company didn’t pay an interim dividend.

'Sales volumes fell to 57% of the prior year period in April 2020 during the peak of the lockdown, improving significantly to 29% of the prior year in June 2020,' the firm said.

'Positive momentum exiting the period continued with the business trading ahead of management's expectations in Q3 to date,' it added.

Applegreen has significant borrowings linked to its acquisition of a majority stake in UK motorway service operator Welcome Break in 2018. Though the company’s asset base of buildings and land does provide something of a safety net.

Shore Capital analyst Darren Shirley commented: ‘Applegreen’s H1 2020 results (six months ended 30 June 2020) reflect the considerable impact of Covid-driven lockdowns, with sales down 27%, and an underlying EBITDA decline of 57%, leading to a €13.8 million loss at the CPTP level.

‘However, post-lockdown trading is improving, with traffic volumes rebuilding and so supporting fuel and food activities, while retail was already proving to be resilient. Period end net debt is reported at €551 million, up a modest €26 million, though at the end of August it had fallen to €481 million which we view as a significant positive.’

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Issue Date: 18 Sep 2020