Applegreen not ruling out UK hotels sale

Forecourt retailer reports strong trading for the first five months of 2019

Applegreen’s UK-based business continued to perform well despite Brexit. Photograph: Cyril Byrne

Applegreen’s UK-based business continued to perform well despite Brexit. Photograph: Cyril Byrne

 

Petrol station operator Applegreen is not ruling out selling 29 hotels it acquired when it bought British rival Welcome Break for €360 million.

Speaking after Applegreen’s annual general meeting in Dublin on Wednesday chief executive Bob Etchingham said the company would decide on the hotels’ future when it completed a review of the properties this year.

“There are a whole range of options that may emerge, from staying as they are right across the board to the other extreme, which would be a disposal,” he added.

The hotels, run by Ramada or Days Inns, are located at Welcome Break’s motorway petrol stations in Britain.

Applegreen’s chief operating officer, Joseph Barrett, pointed out that they were valuable to the Irish company and indicated that the group was more likely to keep them.

Applegreen paid €360 million for Welcome Break last year in a deal that surprised markets when the company announced it.

While it remains interested in buying other businesses, it is more likely to expand by growing existing operations in the Republic, UK, and US, according to Mr Etchingham.

‘Measured approach’

Mr Barrett stressed that the company would take a “measured approach” to growing in the US, where it has 121 outlets.

He pointed out that there were 125,000 gas stations in the US. “So there are a lot of options for organic growth,” he said.

Earlier, Applegreen said in a statement that trading had met company expectations for the first five months of 2019.

Giving an update across its businesses, Applegreen said Irish trading conditions remained good and it was pleased with the performance of the business.

Despite Brexit creating more challenging conditions and weighing on consumer sentiment, the UK arm of the company was “satisfactory”, with the successful integration of Welcome Break into the group delivering synergy benefits to the overall business.

“The US business is performing well and we continue to explore new opportunities in this market,” said Daniel Kitchen, chairman of Applegreen.

Applegreen is continuing to add to its portfolio, adding nine sites since the end of last year, with six in the Republic of Ireland and three in the UK.

The company said it intended pay a final dividend of 0.91c per share, bringing the total dividend for the financial year 2018 to 1.54c per share.