Applegreen (APGN) completed the acquisition of motorway services and hotels group Welcome Break at the end of last year, and the addition to the company’s portfolio of 37 service areas and 29 hotels - combined with a deal for 46 new sites in the US - led to a marked increase in sales for the first half of the year. The roadside retailer’s portfolio grew 31 per cent to 483 sites. Management said it has identified “significant additional recurring synergies” from the deal, and expects integration to be completed by the end of 2021.
Excluding Welcome Break, adjusted cash profits rose 37 per cent to €26.5m (£23.40m) thanks to “excellent” like for like growth, combined with the integration of acquisitions made last year.
The group has been working to diversify its income streams away from the low-margin fuel business, building food and other store revenues. It is not hard to see why – 75 per cent of gross profit now comes from non-fuel sales, despite fuel accounting for 72 per cent of revenues. Management said that while the core catering business was growing well, peripheral services such as hotels and parking had weakened in the first three months of the year. It attributed this to weak consumer confidence, but added that trading over the summer had been satisfactory.
House broker Shore Capital is forecasting pre-tax profits of €69.5m for the full year, giving EPS of 32.2¢, up from €28.3m and 25.5¢ in 2018.
| APPLEGREEN (APGN) | ||||
| ORD PRICE: | 475p | MARKET VALUE: | £ 573m | |
| TOUCH: | 465-485p | 12-MONTH HIGH: | 590p | LOW: 422p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 52 | |
| NET ASSET VALUE: | 220¢* | NET DEBT: | €471m** | |
| Half-year to 30 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2018 | 0.85 | 9.1 | 8.45 | 0.63 |
| 2019 | 1.48 | 10.2 | 4.86 | 0.66 |
| % change | +73 | +12 | -42 | +5 |
| Ex-div: | 03 Oct | |||
| Payment: | 18 Oct | |||
| *Includes intangible assets of €496m, or 411¢ a share, **Excludes lease liabilities of £643m, £1 = €1.11 | ||||
