Applegreen will make decision on UK hotels within two weeks - CFO
Forecourt retailer Applegreen will reveal plans next month for the 29 hotels it acquired last year when it bought a 55pc stake in UK motorway service operator Welcome Break.
Applegreen chief financial officer Niall Dolan told the Irish Independent that hotel consultants had been drafted in to review the hotel arm of Welcome Break, and that a decision on the operations will be made in the next two weeks. The hotels are operated under the Ramada and Days Inn brands.
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Mr Dolan declined to say what the outcome of the review has been. Asked if an outright sale of the hotels is the most likely decision, he insisted it wasn't.
"We've been very active in terms of getting under the bonnet as it were, in doing a very comprehensive review," said Mr Dolan. "We got some external hotel expertise to advise us on that.
"We'll be making a firm decision on that in the next couple of weeks, and coming out to the market in mid-September with our first-half results giving guidance on the types of decisions we've landed on," he added.
Applegreen chief operating officer Joe Barrett insisted at the company's annual general meeting in June that the group would more than likely retain the Welcome Break hotel portfolio.
"We've put in a lot of effort and we're much further down the track in understanding that business and forming a view of where we go from here," Mr Dolan told the Irish Independent.
"We were looking at the full spectrum of options from potentially a divestment to maintaining the status quo. So there are a number of options in between," he added. "We feel much more comfortable in terms of making larger decisions."
The €440m deal Applegreen struck to buy its Welcome Break stake saw it secure an interest in 24 motorway service stations and two trunk road service areas.
They serve about 85 million customers a year. It has an option to lift its stake in the business to 70pc within about five years and has an ambition to ultimately own Welcome Break outright.
At the Applegreen annual general meeting in June, the group said the Welcome Break business had been performing satisfactorily in the face of a challenging economic backdrop as the UK prepares to leave the European Union.
Last week, Applegreen announced that it had agreed to pay $37.6m (€33.2m) for a 40pc stake in Connecticut-based highway services operator CT Service Plazas.
Applegreen joined forces with two infrastructural funds to buy the firm, which has 23 plazas along key routes in Connecticut.
The company has a significant footprint in the US, operating forecourts in states including Florida, Massachusetts, New York, South Carolina, Michigan, Wisconsin and Minnesota.