Despite a surge of more than 300 in the total number of sites run by the Top 50 in last year’s report, the independent sector’s appetite for growth showed no sign of slackening with an even greater increase over the most recent 12 months.
After reaching 1,762 last year, the total rose by 361 and between them the Top 50 Indies account for 2,123 sites or just under 25% of the forecourts in the entire UK market. Most of the increase is down to the sale of 185 sites by Shell, and Esso completing the sell-off of its estate with the disposal of 201 sites.
But with no more major sell-offs expected, it looks like any increase next year will be far more modest.
However, while the sell-offs swelled the numbers for some Top 50 members, and particularly the top four, it was bad news for a few who had operated Shell sites and saw them pass onto new owners.
This was a factor in several cases where members ended the year with fewer sites.
MRH again held onto its number one spot, with the acquisition of 78 sites from Esso helping to increase its estate from 385 to 452.
However, while MRH is still well ahead of its nearest rivals, MFG and Euro Garages did narrow the gap slightly, with MFG acquiring 91 Shell sites, and Euro Garages adding 104 Esso and 68 Shell sites, to end on totals of 372 and 361 respectively.
Such growth has helped to attract the attention of investors and all of the top three have received backing from private equity firms in the past year. MFG, which was owned by Patron Capital, was bought in June by Clayton, Dubilier & Rice (CD&R) in a deal valued at £500m. Next TDR Capital, in October, took a minority stake in Euro Garages that valued the overall business at £1.3bn. And in January this year US firm Lone Star bought MRH for an undisclosed sum.
Rontec, the other Top 50 member with more than 100 sites, had a much quieter year by comparison. It formally merged with Snax 24, although they had already been treated as a single entity for the Top 50, and while it bought 19 Esso sites it also sold 15 sites to Asda. It ended the year one down on last year’s total, with 209, and consequently slipped one place to fourth in the ranking.
In fifth place, Applegreen continued its growth with 12 additional sites. Unlike its bigger rivals it has tended to acquire single sites or small groups, and following the flotation of its parent company in the summer it has additional funding to fuel further growth.
Outside the top four the most eye-catching deal was the acquisition of 11th-ranked Brobot by its near neighbour in Leicester, 10th-ranked HKS. Brobot’s 23 sites, together with the purchase of seven service stations from the Shell sell-off, more than doubled the group’s number of sites to 61. This moved HKS up four places to sixth, and more growth is promised. As if this wasn’t enough activity, HKS also became the first dealer for the new fuel brand in the UK market, Essar.
Highland Fuels was another big climber, taking over Thames Petroleum, which was previously ranked 17th, and climbing to ninth place. Another company that benefited from the Shell sell-off was Golden Cross Group. It bought six sites from Shell and climbed 12 places from 27 to 15 in the rankings.
There were four new entries into the Top 50, the highest number in recent years, with the acquisitive Welsh group, High Noon Stores, which has 10 forecourts, the highest ranked at 32. The next highest-ranked new entry was motorway services group Westmorland. The group won the Forecourt Trader of the Year award in October, for its Gloucester Services on the M5, and also acquired Cairn Lodge Services in Scotland.
Other new entries were Nowell Forecourts and AUK, although the latter has featured in the Top 50 in previous years. Overall there were 26 climbers compared with just 13 moving down, and that is a big change to last year.
In the 2015 listing there were just 11 climbers and 33 moving down and even companies who had added two or three sites were at best standing still. This year, outside the top 10, most companies who held site numbers steady have not dropped down, while anyone adding to their site numbers has gone up several places. The amount of movement in the rankings demonstrates how dynamic the sector is, and while some Top 50 members are buying new sites, others are achieving growth in their businesses by investing in their existing premises.
Looking at the top independents’ plans for 2016, their willingness to invest in existing forecourts, bring others out of retirement or develop new-to-industry sites, demonstrates the level of optimism within the Top 50 Indies about their prospects for the future.
(Report available via https://shop.william-reed.com)