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Applegreen directors' pandemic pay cuts are still in place

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Bob Etchingham

Bob Etchingham

SON Photographic

Bob Etchingham

FORECOURT giant Applegreen has said temporary cuts to the salaries of its executive directors are still in place and "remain under review".

Earlier this year the Dublin-listed group reduced the base salaries of the three directors - Robert Etchingham, Joseph Barrett, and Niall Dolan - by around 20pc from the start of April for a period of three months.

Last year Applegreen CEO Robert Etchingham and Joseph Barrett, the company's chief operating officer, were paid a basic salary of €380,000 and €364,000 respectively.

This excludes bonuses and, in the case of Mr Barrett, a pension contribution of €32,000.

Mr Dolan was paid a salary of €307,000, excluding his bonus and pension contribution.

When the global pandemic hit, the company temporarily reduced its headcount by more than 4,800 employees in Ireland and the UK and those workers moved from the company payroll to the income support schemes run by governments.

Applegreen, which operates over 550 sites across Ireland, the UK, and United States, said that approximately 2,500 of its employees are still temporarily laid off.

This comes as the company says it has remained profitable the three months to June 30.

During the period Applegreen traded ahead of its Covid expectations, according to an update from the group.

On the back of this the company's cash position is "more positive" than expected.

The Welcome Break business in the UK, which is dependent on motorway volumes, traded in line with management's expectations for the second quarter, with the company adding that trading "continues to improve" as restrictions are lifted.

The remainder of the Applegreen estate traded ahead of expectations, on the back of strong store sales, good fuel margins and "extensive" cost saving measures.

As at June 30 Applegreen had net external debt of approximately €550m and that includes Welcome Break facilities that are non-recourse to the wider Applegreen group.

The company said its forecasts indicate it will not need to draw down its existing overdraft facilities or the additional revolving credit facilities during the period.

The Welcome Break subsidiary specifically has sufficient liquidity and covenant headroom for the next 12 months, the company said.

However, if there is a second prolonged national lockdown across the UK caused by another wave of Covid-19, this would likely result in a breach of the revised banking covenants.

Should this occur, "the board would need to take further mitigating actions and/or re-negotiate with lenders to avoid potentially triggering a repayment of outstanding debt," Applegreen said.

Nonetheless, given the non-recourse nature of the Welcome Break debt, such circumstances would not have an impact on the operations of the wider Applegreen group, it added.

Jason Molins, analyst at Goodbody, yesterday said it was an "encouraging update, with the group delivering a solid operating performance in extremely challenging trading conditions".

Last year Applegreen reported revenues of €3.1bn, group earnings before interest, taxation, depreciation and amortisation (ebitda) was €140.4m.

Shares in Applegreen were down just over 1pc in trading yesterday.

Irish Independent