Applegreen on lookout for US deals as profits up
Forecourt retailer Applegreen won't rule our making an acquisition in the United States after committing to the market following three years of trialling its concept there, according to ceo Bob Etchingham.
He said the group is looking at a "number of potential opportunities" in the US, where Applegreen has extended its presence in Long Island and moved into Massachusetts.
He was speaking to analysts as Applegreen announced its maiden dividend as strong food sales in Ireland helped to deliver an 18.6pc rise to €21m in adjusted pre-tax profits for 2016. Revenue last year rose 8.2pc to €1.17bn.
The company's small dividend to shareholders, which will amount to about €1m, is the first since it floated on the stock market in 2015.
Applegreen has six outlets in Long Island, and last year signed a deal to lease nine sites in Massachusetts from CrossAmerica Partners. Its US business was profitable last year having broken even previously.
"We don't anticipate doing anything different in terms of our acquisitions in the US that we have been doing up to this - we'll adopt a capital light approach," said Mr Etchingham.
"We'll be taking property on a leasehold basis from partners who want a large, professional, corporate operator like ourselves to run their business," he said. "We'll share some of the margin with those parties. That's how we entered the market and that's how we see ourselves continuing for the moment.
"We never rule the prospects of an acquisition coming along that we consider to be attractive, and that would allow us to add value. I wouldn't want to rule out any of our options in that regard."
Applegreen boosted its total number of operational sites across all its markets from 200 at the end of 2015 to 243 at the end of 2016. It operates a mix of motorway service areas, as well as trunk-road service areas and traditional filling stations.
In Ireland, Applegreen has 27 service areas, including six large motorway service areas, as well as 128 company-owned or dealer-owned filling stations.
Ireland accounted for 59pc of Applegreen's total revenues last year, but 71pc of its €145.8m gross profits. Food sales accounted for €39.2m, or 38pc, of its total €103.3m gross profit in Ireland. Its service areas feature outlets such as Burger King, Costa Coffee and Subway.
On a like-for-like basis, food and store sales in Ireland rose 9.3pc last year. Store sales accounted for 31pc, or €32m, of gross profits in Ireland last year.
Mr Etchingham said that Applegreen has submitted planning applications for motorway service areas in Britain, at Rotherham, Solihull, Kirby Hill and Basingstoke as it expands its presence in the UK. It already has two motorway service areas in Northern Ireland.
Mr Etchingham said that Applegreen is likely to finalise its acquisition of 50pc of the Joint Fuels Terminal at Dublin Port in the second quarter. He said that Applegreen might also use the facility to distribute aviation fuel.