Applegreen Full-Year Results – What The Analysts Said

By Steve Wynne-Jones
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Applegreen Full-Year Results – What The Analysts Said

Forecourt retailer Applegreen has posted full year group revenue of €3.1 billion, up 55% on the previous year, with like-for-like revenue up 10.8% in fuel and 4.9% in non-fuel.

The group has, however, issued a profit warning for the coming year, due to the "considerable uncertainty created by the current COVID-19 crisis," according to CEO Bob Etchingham.

Here's how leading retail analysts viewed Applegreen's performance.

Allan Smylie, Davy Stockbrokers

"Unprecedented times demand unprecedented actions, and the Applegreen management team is moving aggressively to take out cost and shore up liquidity as the economic impact of COVID-19 hits.

"Key to navigating this crisis will be managing the swing in the group’s negative €198 million working capital position as demand falls in the coming months. The group currently has access to €141.5 million gross cash and the potential to draw down an additional €158 million.


"Assuming that current severe restrictions on movement don’t extend into the summer, Applegreen is well positioned to trade through this. Our price target and forecasts are under review."

Clive Black, Shore Capital

"As scheduled, Applegreen has today issued its preliminary FY2019 results, which confirm an excellent performance with broad based LFL sales growth (+5% non-fuel and +11% fuel) and very strong underlying EBITDA expansion both inc. WB at +141% and exc. WB at +21%.

"After a positive start to FY2020, as very recently guided (24th March) current trading is being adversely impacted by the COVID-19 response and whilst Applegreen sites remain open for business and generating operating cash flows, management is proactively managing its cost base, delaying capital projects, accessing state support mechanisms and engaging in active discussions with supportive lenders.

"We see Applegreen as a defensive, resilient, asset backed medium to long term growth story with experienced and talented management that are doing the right things to permit ongoing progression, as and when more normal trading conditions emerge."


Jason Molins, Goodbody

"Earlier this week, Applegreen noted that it was implementing measures that would help protect profitability and cash flow. In addition to cancelling its final dividend for FY19, further details were announced today.

"These include: i) deferring development capex spend and reducing maintenance capex (GBY previously forecast c.€60m but estimate this could now be closer to €10-15m); ii) reduced headcount by more than 4,800 in Ireland and the UK, out of total of c.11,500; iii) deferring payroll taxes and VAT from HMRC for a minimum of 3 months; iv) benefitting from a property rates moratorium in the UK for 12 months, and 2 months in Ireland; v) started negotiations with landlords to secure rent reductions and more favourable payment terms; and vi) deferring executive director businesses and implementing a recruitment freeze.

"Applegreen confirmed that despite a strong start to the year it expects to see a material reduction in profitability in FY20 due to the impact from COVID-19. Importantly, Applegreen believes it has sufficient liquidity in place to navigate through the challenging period. As noted earlier this week, due to the uncertainty on the future performance, our forecasts remain under review."

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine

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