What does Welcome Break do?

Irish forecourt retailer Applegreen has acquired an effective 50.01% stake in the UK company

Welcome Break operates the Days and Ramada brands for its hotels. Photograph: iStock

Welcome Break operates the Days and Ramada brands for its hotels. Photograph: iStock

 

Welcome Break operates restaurants, service stations and hotels with a particular focus on motorways. Its hotel assets are branded Days Inns and Ramada, both of which fall into the two- to three-star bracket which generally have an accompanying restaurant.

The deal announced by Applegreen on Thursday gives it more hotels in the UK than Dalata, Ireland’s biggest hotel group, although Dalata’s assets appeal to a different customer base.

Nonetheless, the deal gives Applegreen a foothold in a model that doesn’t exist to any great extent in Ireland, with hotels sprinkled across the UK in locations including Cambridge, Milton Keynes, Leicester and two serving London Stansted airport.

Established in 1959, Welcome Break offers brands to retail customers including Waitrose, Starbucks, Krispy Kreme and KFC within its service stations. More recently, it moved into the healthy fast food sphere, developing a partnership with salad bar brand Tossed.

Despite economic uncertainty surrounding Brexit, Welcome Break has managed to grow traffic at its locations, improving that metric 2.3 per cent in the 53 weeks to the end of January 2017.

In the same period it invested £9.1 million (€10.2 million) in the business across some of its service station and hotels.

Jersey incorporation

Before a series of shareholder changes in the last 12 months, Welcome Break was owned by a Jersey-incorporated company which, in turn, was owned by a consortium of infrastructure investors. NIBC European Infrastructure Fund held 55 per cent, ING European Infrastructure Fund held 30 per cent and Challenger Life, an Australian Life Insurer, held 15 per cent. That Jersey structure will continue to exist with Applegreen’s shareholding.

It is unclear what Applegreen plans for the Welcome Break brand but the acquisition gives a greater spread of partner companies. For example, in the Republic it sells Costa Coffee while in the UK its coffee partner is Starbucks. Similarly, Freshii is an Irish partner while Tossed is a similar UK healthy food outlet.

Between Britain and the North, Applegreen was already a substantial player in UK motorway service stations with a total of 90 outlets. Now, those assets will transfer to the Welcome Break portfolio, which encompasses 24 motorway service areas and two trunk road service areas in addition to the 29 hotels.

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