Six months ago, there was some concern that Applegreen 's (APGN) expansion into the UK amounted to an investment in dilutive earnings. But while a weaker sterling did impact the Dublin-headquartered group's euro-denominated full-year results, a heady year of expansion still meant a 16 per cent jump in gross profit in 2016. Although that figure would have been 4 percentage points higher if currencies had not moved, it's worth bearing in mind that the forecourt retailer is also growing at a clip in the US, where the dollar remains relatively strong against the euro.
As is often the case with international business, currency movements wash out in the long term; for Applegreen, a more pertinent measure of financial health is investment. During the period, the total estate grew 22 per cent to 243 sites, resulting in capital expenditure of €60.3m (£52.9m), a figure that nonetheless failed to put a big dent in its strong balance sheet liquidity. In fact, year-end net debt of €19.4m came in well below analyst forecasts.
Trading was mixed, although investors will take encouragement from a 74 basis point improvement in the overall gross profit margin. Much of those gains came from better store and food sales, as a rising oil price and the increasing proliferation of fuel cards kept margins tight at the pump.
Shore Capital upgraded its forecasts on these numbers, and now expects pre-tax profit of €22.1m and EPS of 22.9¢ this year, jumping to $26.2m and 27.1¢ in 2018.
APPLEGREEN (APGN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 418p | MARKET VALUE: | £336m | |
| TOUCH: | 408-428p | 12-MONTH HIGH: | 418p | LOW: 330p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 143¢ | NET DEBT: | 17% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012* | 0.71 | 7.3 | 11.4 | nil |
| 2013* | 0.79 | 16.2 | 24.4 | nil |
| 2014 | 0.94 | 14.9 | 20.5 | nil |
| 2015 | 1.08 | 13.9 | 17.1 | nil |
| 2016 | 1.18 | 19.5 | 21.5 | 1.25 |
| % change | +9 | +40 | +26 | - |
Ex-div: 8 Jun Payment: 29 Jun £1=€1.14. *Pre-IPO figures. | ||||
