Applegreen plc has revealed that all its sites have remained open during the Covid-19 lockdown, and current trading levels are ahead of its expectations for the second quarter.
It added that the recent easing of movement restrictions in each of its markets has resulted in increased traffic volumes.
The trading update was released as it announced that it had secured additional support from its banks to bolster its liquidity for the likely duration of the Covid-19 crisis.
The group has increased funding available through to October 2023, and its lenders have also agreed to substantially relax or remove covenant conditions in each quarter up to and including June 2021.
In a statement detailing the changes it thanked its banking group for their continued strong support and the confidence they have demonstrated in its business model.
Applegreen owns a controlling stake in Welcome Break and added that it was working with the lenders to the motorway services group and it expects to reach a similar conclusion shortly.
It said that while it was prudent to have additional headroom in its funding, it did not anticipate using the additional facilities as it believed it had sufficient cash.
This was based on a scenario where movement continues to be severely restricted to the end of May and then restrictions will then ease gradually before normalising in the fourth quarter of the year. It added that it expected to have adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.
It said the Welcome Break estate has been the part of the business most heavily impacted by the crisis and, as anticipated, has experienced a higher rate of “cash burn” as the UK emerges from lockdown.
It is anticipating a gradual recovery in volumes and is in the process of re-opening some of its food offers to meet the increased demand.
It added that the core Applegreen estate in the Republic of Ireland, UK and US is performing ahead of its original assumptions at the outset of the pandemic, and it expects to be cash positive from June onwards as working capital levels start to rebuild.
The group said its focus on cost reduction was continuing and, in addition to the measures previously announced, the board has agreed to reduce the base salaries for executive directors by around 20% from 1 April for a period of three months.