Wednesday 23 January 2019

Applegreen has scope to borrow €70m to do deals

APPLEGREEN chief executive Bob Etchingham has hailed a “robust” first half for the compnay. (Stock image)
APPLEGREEN chief executive Bob Etchingham has hailed a “robust” first half for the compnay. (Stock image)
Gavin McLoughlin

Gavin McLoughlin

Petrol station business Applegreen has €60m-70m of room to borrow for acquisitions, according to chief financial officer Niall Dolan.

Mr Dolan told the Irish Independent that the company had the ability to leverage up by that much while still keeping within its target of a net debt to ebitda ratio of two.

The company has just completed a deal to lease more than 40 stations in the US as its ambitious expansion plan continues.

The stations are being leased from New York-listed CrossAmerica Partners, under a long-term agreement that is expected to complete in the third quarter of this year.

The stations are located in Florida and will enhance Applegreen's presence in the south-east of the country after its acquisition of the Brandi Group in South Carolina last October.

Mr Dolan was speaking after the company's AGM in Dublin yesterday.

Chairman Daniel Kitchen told the meeting that the company had a "positive start" to the financial year, with trading ahead of the prior year.

However, he warned that the extreme weather in March negatively affected the business in all of its markets, but particularly in Ireland.

"Recent international fuel price increases have adversely impacted on fuel margins," Mr Kitchen added.

Since the end of December the company has added 34 sites to its portfolio.

Seven are in the Republic of Ireland, 14 in the UK and three in the US.

Food is an important part of its offering - and is a higher margin business than fuel.

Chief executive Bob Etchingham told the Irish Independent that the company sees itself as a "food business that happens to sell fuel".

He said the company has added a number of Tesla superchargers to its network and also has a hydrogen refuelling point at a location in the US, but added that he thinks it will take time before these technologies emerge in a meaningful way.

He said the company was working with its food partners to try to take advantage of a shift in consumer preferences towards healthy eating.

Another of the company's strategies has been to try to attract corporate customers with executive lounge facilities - marketed as a place for meetings.

One such facility has been installed at its outlet in Lisburn.

Mr Etchingham said there was "nothing he could say publicly" about plans to roll the facilities out in the Republic.

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