Applegreen issues profit warning as 2019 revenues rise 53%

Forecourt retailer Applegreen has warned of a decline in profits for its current financial year due to the Covid-19 outbreak, as it reported a 53 per cent rise in revenues to €3.1 billion for 2019.

The company said it had temporarily laid off 4,800 employees across Ireland and Britain, was deferring planned capital expenditure and was taking additional measures to conserve cash as it seeks to deal with the impact of the coronavirus outbreak.

The company said trading in the first 10 weeks of 2020 had been strong but that footfall and volumes had declined in March.

“We expect a material reduction in profitability for the current financial year. The scale of this will be dependent on how the situation develops and over what timeframe, together with the impact of any further measures taken by national governments to mitigate the disruption,” it said.

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“We have modelled our expectations of the impact on our business taking account of current levels of trading across the three markets where movement is severely restricted until the end of May with the expectation that restrictions will then ease gradually before normalising in the fourth quarter. That scenario sees a significant impact on working capital during April and May with a levelling off in June and improving thereafter,” the company added.

Applegreen recorded adjusted earnings before interest, taxes, depreciation, and amortisation of €140.4 million, up 141 per cent year-on-year, which excluded Welcome Break’s €57.7 million contribution.

Pretax profits climbed 136.5 per cent last year to €70.5 million. Adjusted diluted earnings per share increased 26 per cent to 33.8 cent.

It reported like-for-like fuel revenue growth of 10.8 per cent over the year with related gross profit climbing 7.45 per cent. Non-fuel revenues rose 4.9 per cent and profit 5.7 per cent.

The group had consolidated net external debt of €525.5 million at the end of 2019. Applegreen said it had sufficient cash and credit facilities to get it through the current crisis.

Applegreen earlier this week announced a number of measures it was taking to conserve cash including deferring bonuses and scrapping a final dividend for 2019.

"We are highly conscious of the considerable uncertainty created by the current Covid-19 crisis but are confident in the defensiveness of our business model and the strength of our balance sheet and liquidity. Therefore, we are positive about navigating the company through this crisis and building our business for the long term," said chief executive Bob Etchingham.