Fuels and food retailer Applegreen says Brexit will not slow forecourt growth

Applegreen, the forecourt fuels and food retailer, said it sees no reason to curtail expansion plans because of Brexit, as it plans to open up to 50 new sites in Ireland, the UK and the US this year.

The retailer, which came to the market almost two years ago, had 243 sites at the end of December and has opened 12 more outlets since the start of the year.

Its revenue in 2016 of almost €1.18bn was up 8.8% from the previous year. Adjusted earnings before interest, taxation, depreciation and amortisation rose 10.7% to €32m.

It also announced plans to pay 1.25p (€1.43) dividend a share, its first since launching its offering in 2015. The shares fell about 2.5% yesterday. They had dropped sharply in the aftermath of the UK’s Brexit vote in June.

Having dropped to an all-time low of €3.90 in July, the shares climbed to €4.98 in the middle of last month. In recent days, sterling has again fallen against the euro as the UK prepares to formally start its divorce talks with the EU.

However, outgoing chief financial officer Paul Lynch said though affected by the slide in sterling against the euro that it saw no reason to slow expansion plans in the UK. Its experience of the UK market had been that retail confidence has picked up, he said. 

Applegreen is happy with its US growth, where it now has 13 sites, after opening new outlets this year, Mr Lynch said. Merrion Capital analyst Dylan Simmonds it was confident about its non-food sales in Ireland.

“We remain positive on management’s ability to grow the Applegreen brand but currently feel the stock is close to fair value,” he said.

Goodbody said Applegreen had “significant scope to continue” to open more sites. It has a ‘buy’ recommendation.

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