High-quality petrol forecourt retailer Applegreen (APGN:AIM) has pumped out outstanding maiden full-year results as a public company, growth in sales and profits delivered in the UK and Republic of Ireland (ROI) alike. A confident outlook statement, with Applegreen highlighting strong consumer sentiment in Ireland especially, helps the shares ripen up 5p to 356p.
Click here for an in-depth look at the 2015 numbers from Dublin-headquartered Applegreen, which not only offers investors a play on food-to-go and convenience trends, but also access to a cash-generative business model that is supporting geographic expansion.
[caption id="attachment_67649" align="aligncenter" width="475"] Repro Free:Tuesday 19th May 2015. Bob Etchingham (CEO), Joe Barret (Commercial Director) and Paul Lynch (CFO). Picture Jason Clarke Photography.[/caption]
A running Play of the Week, Applegreen's offer of keen fuel prices lures motorists to its sites, where it can then sell them higher-margin food and drink. This retail-led business model, focused on driving footfall to sites, is clearly working well, 26% annual EBITDA growth to €28.9 million comfortably ahead of the €27.8 million haul forecast by Irish stockbroker Davy.
Growth reflects new site openings and an increasing contribution from food, driven by Applegreen's site upgrade and rebranding programme, not to mention an improving economic backcloth in the Emerald Isle. Two new food offers, Chopstix and Greggs (GRG), built on the existing portfolio of Burger King, Subway and Whitbread's (WTB) Costa Coffee, while Applegreen's ability to manage fuel margins during periods of fuel price volatility was once again in evidence, fuel profits up 27% to €49 million despite significant price deflation.
The number one Motorway Service Area operator in the Republic of Ireland where it has 12% motor fuel market share, Applegreen's estate expanded from 152 sites to 200 sites last year, 37 added in the ROI, eight in the UK and three in the US. Uncle Sam is an exciting long-term opportunity for Applegreen, which has dipped its toe in the water with five Long Island-based sites and is exploring extending the US trial out to Massachusetts with a partner.
CEO Bob Etchingham says 'we have had a positive start to 2016, adding four Service Area sites and seven petrol filling stations to the estate and we continue to see good opportunities for green field and bolt-on expansion. Consumer sentiment is strong in both our key markets, particularly the Republic of Ireland, and we are confident that our distinctive retail offering in the forecourt sector will continue to deliver growth through 2016.'