1 Jul 2020 07:00
1 July 2020
Applegreen plc
Liquidity and Trading Update
Applegreen plc (the "Group" or the "Company"), the roadside convenience retailer, is pleased to announce that its Welcome Break subsidiary has successfully completed a process to access additional facilities which significantly enhances its liquidity during the COVID 19 crisis.
Welcome Break has repurposed £25m of a dedicated capital expenditure facility in its existing banking facilities into a revolving credit facility which is available to draw down for any purpose. The lenders to Welcome Break have also agreed to relax or remove covenant conditions for tests up to and including June 2021. We thank these lenders for their ongoing support for Welcome Break and the confidence they have demonstrated in its business model.
Welcome Break has traded in line with our COVID19 projections for both May and June and the business has now reopened a significant number of its food and beverage offers to meet demand as travel restrictions started to ease from early June. Traffic volumes on the UK motorway road network are continuing to recover and current traffic flows are now back to over 65% of 2019 volumes. We welcome the UK government's recent announcement which will see further substantial lifting of restrictions from 4 July 2020 which we expect to drive further traffic increases on the road network.
At 26 June 2020, Welcome Break had over £30m in available cash in addition to the new undrawn facilities of £25m. The Welcome Break business has substantial liquidity and is expected to be cashflow positive in June, leaving the business well positioned ahead of the important summer season.
The remainder of the Applegreen business has continued to trade ahead of our COVID19 projections for both May and June. We are very pleased with the performance which has been aided by strong store sales in the local petrol filling station sites, good fuel margins and extensive cost saving measures.
Traffic volumes have started to recover as authorities have accelerated the lifting of travel restrictions with working capital and cash also starting to rebuild with these increased volumes. Cash balances in this part of the business at 26 June 2020 were in excess of €60m with undrawn facilities of approximately €64m.
Our absolute focus at present is navigating the various challenges associated with COVID-19 and to ensure we are looking after our people whilst continuing to deliver the essential service we provide to our customers. The ultimate course of the pandemic remains unclear at this stage, but we are following the relevant guidance from the authorities and taking definitive steps to ensure the Group remains well positioned as market conditions recover.
For further enquiries, please contact:
Applegreen +353 (0) 1 512 4800
Bob Etchingham (CEO)
Niall Dolan (CFO)
Drury Porter Novelli (Ireland PR Adviser) +353 (0) 1 260 5000
Paddy Hughes
MHP Communications (UK PR Adviser) +44 (0) 20 3128 8100
Simon Hockridge
Peter Hewer
Alistair de-Kare Silver
Shore Capital +44 (0) 20 7408 4090
Stephane Auton
Patrick Castle
Daniel Bush
Goodbody +353 (0) 1 667 0420
Joe Gill
Richard Tunney
About Applegreen
Applegreen plc is a high growth roadside convenience retail business operating in Ireland, the United Kingdom and North America. The growth pillars of the business are based on growing food to become the dominant profit stream and therefore reducing the dependency on fuel, partnering with premium food-to-go brands and focusing on value accretive acquisitions.
The Applegreen brand is based on competitive fuel pricing that drives in-store footfall with an innovative food and beverage offer focussed on our customers' needs. Improving the customer journey to inspire loyalty is central to what we do, ensuring we provide a smooth and enjoyable experience.
We are committed to driving shareholder value by deploying the best operational practices, a cost optimisation focus, coupled with disciplined capital allocation.
Combined with organic growth from existing sites, our growth strategy is focused on establishing a presence in new markets by developing traditional fuel forecourts with a branded food offer and, when significant scale has been achieved, entering the larger service areas on strategic road networks and enhancing the more resilient non-fuel contribution. The final stage involves vertical integration of the supply chain or fuel distribution. Applegreen is at different stages of this lifecycle in its three markets.
Applegreen is the number one Motorway Service Area Operator (MSA) in the Republic of Ireland and the number two Motorway Service Area Operator in the United Kingdom. MSA sites are strategic infrastructure assets that have high barriers to entry due to long development lead times and government legislation. There will be increased focus on MSA growth in these regions.
We have now established a large Petrol Filling Station (PFS) footprint in the US and our aim is to expand our presence as a recognised operator of large Service Area sites on strategic road networks in that market.
The management team has a strong track record of delivery and the talent pipeline will underpin our expansion in the three markets.
As at December 2019, the business operated 556 forecourt sites and employed c.11,798 people.