TIDMAPGN
RNS Number : 2933H
Applegreen PLC
24 March 2020
24 March 2020
Applegreen plc
COVID-19 Update
Applegreen plc ('Applegreen' or the 'Group'), the roadside
convenience retailer, today provides an update in light of the
recent developments regarding COVID-19.
2019 results
The Group expects to release its preliminary 2019 results as
scheduled on Friday, 27 March 2020 and will provide a detailed
briefing on its 2019 results and current trading at this time.
Group profitability for FY19 will be in line with consensus
which was driven by solid like-for-like growth across the business,
particularly in non-fuel.
Current trading and COVID-19
Applegreen has traded strongly and in line with management
expectations for the first 10 weeks of 2020. However, footfall and
volumes have been impacted in the last two weeks as governments and
customers take increasing measures to contain the spread of the
virus.
Currently, all of our stores remain open and we are working hard
to protect the health and safety of our people as well as provide
an essential service in the communities in which we operate. We
have implemented an extensive range of measures to safeguard our
people and communities across our three regions. The Group's supply
chain has remained fully operational and its strong customer
service levels have been maintained.
Given the ongoing uncertainty, we are unable to quantify the
impact of COVID-19 on our financial and trading performance at this
stage, however we expect a material reduction to profitability for
the current financial year. The scale is dependent on how the
situation develops and over what timeframe, and the impact of
further measures taken by the governments in the markets in which
we operate.
Short term actions to conserve cash
In response to this unprecedented and uncertain environment, the
Group is taking a number of actions to protect profitability and
conserve cash:
-- Deferring development capital expenditure;
-- Reducing operating cost base;
-- Tight management of working capital, including stock
levels;
-- Implementation of a recruitment freeze;
-- Deferring executive director bonuses;
-- Availing of newly introduced government relief measures;
and
-- Opening negotiations with landlords on rental holidays.
In addition to the above, in order to preserve liquidity, the
Board has decided not to recommend a final dividend in relation to
2019 at its forthcoming AGM. Our banks remain supportive and we
will update the market more fully in the preliminary results
statement.
Outlook
Applegreen is fundamentally a resilient business which operates
in an industry which provides an essential service to the
community. The Group has a strong management team in place with an
excellent track record of delivery and the capability to respond
and adapt quickly to changing market conditions.
Whilst the current crisis presents multiple challenges, the
Board remains confident in the strategy over the longer term and
believes the Group will be well positioned to benefit from the
normalisation in trade across the three regions.
For further information, please contact:
Applegreen +353 (0) 1 512 4800
Bob Etchingham (CEO) / Niall Dolan (CFO)
Drury Porter Novelli (Ireland PR Adviser) +353 (0) 1 260 5000
Paddy Hughes
MHP Communications (UK PR Adviser) +44 (0) 7709 496 125
Simon Hockridge / Peter Hewer / Alistair
de-Kare Silver
Shore Capital +44 (0) 20 7408 4090
Stephane Auton / Patrick Castle / Daniel
Bush
Goodbody +353 (0) 1 667 0420
Joe Gill / Richard Tunney
About Applegreen
Applegreen plc is a high growth roadside convenience retail
business operating in Ireland, the United Kingdom and North
America. The growth pillars of the business are based on food
becoming the dominant profit stream and therefore reducing the
dependency on fuel, partnering with premium food-to-go brands and
focusing on value accretive acquisitions.
The Applegreen brand is based on competitive fuel pricing that
drives in-store footfall with an innovative food and beverage offer
focussed on our customers' needs. Improving the customer journey to
inspire loyalty is central to what we do, ensuring we provide a
smooth and enjoyable experience.
We are committed to driving shareholder value by deploying the
best operational practices, a cost optimisation focus, combined
with disciplined capital allocation.
Combined with organic growth from existing sites, our growth
strategy is focused on establishing a presence in new markets by
developing traditional fuel forecourts with a branded food offer
and, when significant scale has been achieved, entering the larger
service areas on strategic road networks and enhancing the more
resilient non fuel contribution. The final stage involves vertical
integration of the supply chain or fuel distribution. Applegreen is
at different stages of this lifecycle in its three markets.
Applegreen is the number one Motorway Service Area Operator
(MSA) in the Republic of Ireland and the number two Motorway
Service Area Operator in the United Kingdom. MSA sites are
strategic infrastructure assets that have high barriers to entry
due to long development lead times and government legislation.
There will be increased focus on MSA growth in these regions.
In the US, we have established a footprint in three regions
which is a strategic step in growing our presence as a recognised
operator of large Service Area sites on strategic road
networks.
The management team has a strong track record of delivery and
the talent pipeline will underpin our expansion in the three
markets.
As at December 2019, the business operated 556 forecourt sites
and employed c.11,798 people.
This information is provided by RNS, the news service of the
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contact rns@lseg.com or visit www.rns.com.
END
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