Applegreen profits get a Welcome Break

Retailer and forecourt operator Applegreen on Friday reported a sharp rise in profits on the back of revenues boosted by its Welcome Break acquisition.

Total revenue rose 73% to €1.5bn for the six months to June 30 year, as UK revenues rocketed 128% due to the impact of Welcome Break, acquired last October.

Pre-tax profit was up 12% to €10.2m, while gross profit was 145% higher at €268.0m. Earnings before interest, tax, depreciation and amortisation rose to €58.9m from €19.4m.

The interim dividend was lifted 5% to 0.66 cents a share.

US revenues increased 117% to €199.2m, driven by acquisitions made in Florida and South Carolina in 2018.

Applegreen said its expansion plans in the US, where it has bought another 46 sites in the Mid West, were set to be completed in the fourth quarter.

Irish revenue rose by 14% to €463.6m against a comparable period that had been hampered by poor weather conditions.

Bob Etchingham, chief executive of Applegreen, said: "Our primary focus in the immediate term remains the delivery of further synergy benefits from Welcome Break, which we now expect to be significantly larger than our previous expectation, and the integration of recent US acquisitions, whilst continuing on the deleveraging trajectory for the group."

Analysts from Shore Capital said the quality of the company's profitability continues to improve after 75% of gross profit was generated in non-fuel areas, as non-fuel gross profit rocketed by 187% to €202m due to the Welcome Break acquisition.

"We view Applegreen as a business with high quality assets that is well set to drive strong earnings growth and cash generation over the medium-long term."

Applegreen shares were up 3.51% at 478.75p at 1021 BST.

(Writing by Frank Prenesti; Editing by Michele Maatouk)