EG Group reports that it has made ‘significant progress’ in reducing its debt thanks to the sale of the majority of its UK and Ireland forecourts to Asda. The company sold the sites to Asda in October for £1.98bn.
The proceeds of the sale, together with the net proceeds from the recent sale and lease-back transaction in the US and the $43m net proceeds from the non-core US asset disposal, have been used to repay almost $4bn of the Group’s debt.
However, in its latest trading update, the Group reported that its EBITDA declined by 18% to $345m in Q3, primarily due to the impact of lower fuel volumes and a competitive environment in the quarter, as well as comparisons with the exceptional fuel market conditions in Q3 of 2022. Group revenue was $7,608m in Q3, compared with $8,060m in the same period in 2022.
Growth in gross profit during the quarter came from Grocery & Merchandise and Foodservice, which EG said demonstrated the Group’s “proven and successful strategy”.
In the UK&I and Continental Europe, Grocery & Merchandise gross profit for the quarter increased by 12.8% thanks to higher sales and a strong focus on product mix and investment in new sites across both regions.
The Group’s Foodservice gross profit increased by 24% to $221m for the quarter, boosted by increased sales activity and improved margins across UK&I and Continental Europe, and driven by increased footfall, particularly across the Benelux region.
Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group, said: “We continued to deliver upon our key strategic priorities in Q3, including growing gross profit in our foodservice, and grocery and merchandise businesses. In particular, foodservice – which continues to represent a significant growth opportunity globally – delivered a standout performance with gross profit up 24% in Q3, driven by increased revenues, as customers responded positively to our evolving and compelling proposition.”
Also within Q3, the Issas did a “ground-breaking deal” with Tesla to purchase their latest ultra-fast charging units. They said this demonstrated how they continue to progress their strategy on EVs and alternative fuels.
