Applegreen deal opens tap to source its own Irish fuel

Fuel forecourt retailer Applegreen is to pay €15.7m for a 50% stake in the Joint Fuels Terminal in Dublin port, which it says will allow it to import fuel directly from refineries.

The company, which employs 3,300 in 330 sites in Ireland, the UK and the US, announced that it has struck the agreement in the Joint Fuels Terminal with Topaz Energy Group, which it said will be funded from its own resources.

Applegreen said that the proposed acquisition provided it with the facility to import fuel directly from refineries thereby securing a strategically valuable platform that provides a competitive supply for the majority of its Irish fuel requirements.

The acquisition is expected to add to its earnings this year.

“Prior to this, Applegreen would have bought fuel from the wholesale market. This acquisition means it can source directly from refineries, so makes good business sense,” said a spokesman.

The Joint Fuels Terminal, which is half-owned by Valero Energy Ireland, is one of three fuel importing facilities in Dublin port.

The stake that Applegreen is buying was previously owned by Esso Ireland.

Applegreen shares have had a tough 2016, with its shares down 25%.

The company, valued at €377m on stockmarkets, saw its shares drop to €3.90 in the wake of the UK’s Brexit vote.

They have since recovered sharply, and were trading at €4.50 yesterday, but still far short of the €5.69 level in April.

In September, Applegreen said it had no major plans to slow its expansion plans in the North and in Britain, and that trading since the end of June had been positive and shown improvement, particularly in Britain.

For the first six months to the end of June, Applegreen reported €555.9m in sales, up 7.4% from a year earlier. As well as fuel, Applegreen relies on serving hot food from international franchises at its locations.

The spokesman said: “While Applegreen has around 15% of the fuel market share in Ireland, it is more than just a petrol filling station operator. It’s very much a convenience retail operation.”

He said that Applegreen aims to provide a premium food and hot beverage offering in all its sites.

It uses its own branded products as well as providing outlets for international brands such as Subway, Burger King, Costa Coffee, Lavazza, Chopstix and Greggs.

“The deal provides Applegreen with a direct importing capability that will supply the majority of its Irish fuel requirement,” said Davy Stockbrokers.