Applegreen’s (APGN) half-year results represent the first update from the petrol forecourt retailer since the August announcement that it would acquire a majority stake in Welcome Break. To recap, the group expects to buy a 55 per cent holding in the motorway service operator at a cost of €362m (£325m). The shares remain suspended, pending the circulation of an admission document in September, which hadn't been published at the time of writing.
Against this backdrop, it was encouraging to see a broadly positive set of numbers to June – achieved despite difficulties stemming from the severe weather conditions in March, which disrupted trading in the group's three markets. The group’s strong top-line momentum tapered further down the P&L, after selling and distribution expenses soared by around two-fifths to €82.6m. These mounting costs reflected site acquisitions in the US and UK in late 2017, with related inventory recognised as expense.
The company’s entire proposition will be transformed if the Welcome Break deal progresses – bringing Applegreen greater exposure to non-fuel revenues, among other benefits. And while net debt fell during the period, the balance sheet doesn’t provide an up-to-date picture because the acquisition will be financed by a new €300m debt facility and a proposed equity fundraising of at least €100m.
According to Bloomberg consensus data, analysts expect adjusted EPS of 27¢ for 2018 (from 24¢ in 2017).
| APPLEGREEN (APGN) | ||||
| ORD PRICE: | 538p* | MARKET VALUE: | £493m* | |
| TOUCH: | na* | 12-MONTH HIGH: | 580p | LOW: 488p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 206¢ | NET DEBT: | 5% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 673 | 8.9 | 9.4 | 0.60 |
| 2018 | 855 | 9.1 | 8.5 | 0.63 |
| % change | +27 | +2 | -10 | +5 |
| Ex-div: | 27 Sep | |||
| Payment: | 19 Oct | |||
| *Shares in Applegreen have been suspended from trading since 2 Aug 2018 £1=€1.11 | ||||
