Shares in Applegreen slipped as much as 1.5% despite the fuel forecourt and motorway services station operator saying its trading levels and cash position were better than expected in the second quarter of the year.
Earlier this year, the group said it expects to see a material reduction in profits this year due to the Covid-19 disruptions.
However, it said it traded ahead of expectations in the three months to the end of June and remained profitable, on an EBITDA level.
Its UK-based Welcome Break business – the most vulnerable aspect of the group – met expectations and showed signs of improvement, the group said.
As a result of the improved trading, Applegreen said its cash position is currently more positive than expected.
As of the end of June, it had net debt of around €550m.
The Applegreen-branded division had €70m in cash and €260m of external debt, while the Welcome Break arm had €40m of cash and €400m of external debt.
The group said it doesn’t expect to have to drawdown its overdraft or credit facilities for the foreseeable future.
It said Welcome Break has sufficient liquidity for the next year, but a second prolonged Covid lockdown in the UK could see it breach its banking covenants.
That would force Applegreen to renegotiate with its lenders in order to avoid potentially triggering a repayment of outstanding debt.