Applegreen will make its call on US growth in 2017
Published 07/09/2016 | 02:30
Management at forecourt retailer Applegreen will make a decision next year about future plans for the company's business in the United States, according to chief executive Bob Etchingham.
Applegreen, whose primary business is in Ireland and the UK, revealed that it has secured a lease on nine additional sites in the United States that will stretch its American presence into Massachusetts.
It has also signed a franchise agreement with retailer 7-Eleven.
The company now has six forecourts in Long Island in New York, and four of the sites in Massachusetts have been taken over since the end of June.
It has leased the sites from CrossAmerica Partners, a wholesale distributor of motor fuels and lessor forecourts for fuel retailers across the northeastern United States.
Mr Etchingham told the Irish Independent that the Applegreen operations in the US are breaking even and not consuming much management time.
"We're still in learning mode in the US," he said.
"We're still developing relationships. We do want to continue to develop there, but we're doing it in a very measured and cautious fashion.
"We will look to make a decision as to whether we push on in the United States, probably sometime in the first half of 2017."
He was speaking as Applegreen reported a 7.4pc rise in revenue to €556m during the first half of the year, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 15pc higher at €13m.
The results were in line with analyst expectations.
The company had 200 sites at the end of 2015, a figure that rose to 220 at the end of June.
Applegreen said that trading in Ireland was particularly strong during July and August, while it also picked up notably in the UK during the summer following the Brexit vote there.
Applegreen has a number of motorway service areas in Ireland.
It has four in the UK, all of them in Northern Ireland. At the end of this month, it will submit plans for what would be its first motorway service area in Britain. It would be located in Hampshire in the south of England.
"We are the consultation stage with the public and the first formal planning application will go in later this month," said Mr Etchingham.
"We have a number of other opportunities that we're prepping for, and they will go into the planning system in the first quarter of next year.
"It'll be two or three years before we see any results from that work," he added.
The company generated €49.1m of its €68.5m gross profit during the first half in Ireland, with €18.4m made in the UK.
In Ireland, food accounted for 37p of the gross profit figure here, with fuel contributing 31pc and its stores 32pc.
In the UK, Applegreen's food sales accounted for 22pc of gross profit generated there in the first half. That compared with 13pc in the first half of 2015.