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September 13 2017 2:30 AM
Weak sterling has made the M1 corridor in Ireland more challenging for forecourt retailer Applegreen, but CEO Bob Etchingham has said he is not concerned about the UK economy, despite an approaching Brexit.
"The attractiveness of buying fuel in the south now has lessened because of the impact of sterling," he told the Irish Independent, adding that he wouldn't overstate the effect on the business.
Mr Etchingham was speaking as Applegreen unveiled a strong set of first-half results, with revenue rising 21pc to €672.5m and gross profits up 20pc to €82.2m.
Adjusted earnings before interest, tax, depreciation and amortisation were 28pc higher at €16.6m in the period. Its performance was boosted by higher fuel margins and increased food sales.
Stock market-listed Applegreen generated €384m of its first-half revenue and €57.1m of its gross profits in Ireland. Of that, fuel accounted for €290.3m of sales and €18m of gross profits.
Food sales accounted for €35.9m of sales and €20.5m of gross profits; sales from its forecourt stores hit €57.7m and gross profits were €18.5m.
Revenue at the Irish operations was 15.4pc higher year-on-year while gross profit in the period was up 16.4pc. Shares in the company rose more than 4pc at one stage yesterday.
Mr Etchingham said that the UK economy remains solid, despite consumer unease surrounding Brexit.
"I think there are some signs, but they're relatively small," he said about the impact of the UK's planned exit from the European Union.
"It's a mixed message that we're getting in the UK at the moment. At the end of the day, people buy what we have. We find that even during bad times, our business keeps on ticking over quite nicely. We're not concerned about the UK economy."
In August, Applegreen agreed to pay €23m to buy seven sites in the UK, including six service areas, along the A1 motorway between London and the north. It currently has 85 sites in the UK.
It currently has three motorway service areas in early planning stages. Mr Etchingham said that Applegreen expects its success rate in terms of securing planning permissions for such schemes to be about one-in-three.
Applegreen's chief operating officer Joe Barrett said that the group is looking for opportunities to expand further north in the UK, but wouldn't go "too far north outside our comfort zone".
Applegreen also has operations in the United States and in July announced a deal to acquire a chain of 34 filling stations in South Carolina as part of a $75m transaction.