Applegreen 'can expand in US and UK'
Listed forecourt retailer Applegreen has a "meaningful" opportunity to expand in the UK over the medium term, but its presence in the United States has even more potential, according to a research report from Davy Stockbrokers.
Davy pointed out that the UK market accounted for 28pc of Applegreen's €145.8m gross profit in 2016.
"While we think the opportunities in the US market are more significant, the UK still has the potential to be a meaningful contributor to group profit growth over the medium term," the stockbroker noted.
It added that Applegreen - founded by CEO Bob Etchingham and chief operating officer Joe Barrett - opened its first forecourt in the UK a decade ago and is on track to have about 140 sites there by 2019. That would equate to about one-third of Applegreen's total estate by that time.
But Davy pointed out that such a tally would still only represent less than 2pc of the entire UK market, where there are currently 4,200 dealers which are not owned by one of the top five independent operators.
"Three of the top four independent players in the UK market are private-equity backed to some degree," it added. "This has driven market consolidation and significant forecourt price inflation."
But Davy believes forecourt prices in the UK have now stabilised.
Applegreen has steadily expanded in the UK and the US in recent years.
Last August, it agreed to pay €23m to buy seven sites in the UK, including six service areas along the A1.