(Alliance News) - Applegreen PLC on Wednesday said current trading levels are ahead of the company's "baseline assumptions" for the second quarter and the easing of lockdown across its operating markets has resulted in increased traffic volumes.
The roadside convenience retailer also said that it has secured increased liquidity by converting EUR52.5 million of the accordion facility in Applegreen's existing banking facilities into a revolving credit facility, which represents an increase to the committed funding available for the remaining term through to October 2023.
In addition, the company's lenders have agreed to relax or remove banking covenant conditions for the tests arising in each quarter up to and including June 2021.
Applegreen is working with lenders of its Welcome Break motorway rest stop unit - the part of its business most harmed by the Covid-19 lockdown in the UK - to reach a similar arrangement.
"Whilst it is important to have additional headroom in our facilities, we do not anticipate drawing down these additional facilities. 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 fourth quarter," the company said.
In order to conserve cash, Applegreen also has decided to implement a 20% cut to base salaries for executive directors for three months starting from April. Also, the company has pursued a graduated salary cost reductions on a temporary basis for support staff across the business.
The Dublin-based company said its core Applegreen estate in Ireland, the UK and US is performing ahead of original assumptions at the outset of the virus pandemic, and the company is expecting to be cash positive from June onwards.
As expected, the Welcome Break business has experienced a higher rate of cash burn as the UK emerges from lockdown and is expected to have a gradual recovery in volumes, Applegreen added.
Shares in Applegreen were down 3.2% at 261.50 pence each in London on Wednesday at midday.
By Tapan Panchal; tapanpanchal@alliancenews.com
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