Ambitious new forecourt entrant Roadside Real Estate has announced an agreement to purchase Grindley Brook Garage near Whitchurch, Shropshire: another premier location with a fuel volume of nearly 17mlpa.
It is the second prime estate business that the former Abingdon-based property specialist has declared it is purchasing since December, in its quest to “very quickly become one of the Top 10” independent operators.
The news comes as the public quoted business is due to complete on Wednesday (February 25) on the acquisition of Gardner Retail’s six forecourts in the south west of England. And it expects its original forecourt purchase, a former Sainsbury’s site in Coventry, will re-open this summer, pending planning approval, after a knockdown rebuild.
The deal, for the whole of the DA Roberts business, includes the petrol station, an MOT garage, and bulk fuel operation with 24 trucks delivering more than 81mlpa of fuel, including diesel, gas oil, kerosene, Adblu and industrial heating oil, to hauliers, farmers and homes.
Roadside describes its move as a “strategic purchase which gives us the opportunity for real scale and expertise in fuel”.
That is according to its chief operating officer David Phillpot who says that Roadside is on an acquisition trail for 30 to 40 sites a year, with “a number of other conversations going on” for further purchases, and “more news in coming weeks”.
Roadside’s latest addition, on the busy A41, has been owned by Dave Roberts for 57 years, who after a spell of ill health and approaching his 81st birthday, is reluctantly handing over.
Pleased to have sold the business complete, he says: “It has been a long time to build this business up, and I’ve seen a lot of change over the years, but we have tackled it and are still here with a heck of a turnover.”
After nearly two years of trying to find the right buyer, he agreed to sell to the newcomer following an introduction from MHA’s corporate finance and tax team. His requirement was that a buyer would take on all elements of the DA Roberts business.
More than 50 employees will be retained under TUPE (Transfer of Undertakings Protection of Employment) regulations, including finance director Ricky Allman, who has worked at the business for nearly 10 years, and will continue to manage the forecourt as operations manager.
Not everything will stay the same though. Roadside Real Estate has ambitions to set up neighbourhood hubs with numerous services for customers: post offices, food to go, laundry, and parcel lockers.
It has purchased land next to the Essar branded site, where Dave Roberts and his wife currently have their home, to allow for a larger shop and reconfigured layout.
Currently, with the rural site being so busy, car queues sometimes spill onto the road to use the 12 standard petrol pumps, which are alongside two HGV pumps and two AdBlu pumps. Also, on the forecourt is a jet wash and air and vac machine.
There is great potential, believes Phillpot, to develop the shop, which turned over £600,000 last year. Also there is a need to introduce more customer parking spaces.
“In my mind there is no reason that this site cannot be a mini service area, with plenty parking and be somewhere nice to hang out, with seating and hot food,” he adds. Commuters, holidaymakers, at certain times of the year, and commercial customers would all benefit from such an upgrade, he adds.
“We believe there is a huge opportunity for the shop,” says Phillpot. ”It is quite different to the typical business we may purchase as it gives real volume in fuel and the opportunity to develop the convenience offer from scratch, rather than evolving what is already there.
“We want to add value with hot food and drink, jet wash and valeting, but we don’t know at this stage what we will end up with at this location,” he adds.
A big attraction of the site for motorists currently is its competitive fuel prices, with even the RAC congratulating the business in the press on the value it gives to the motorist at the pump. It uses its trucks working on its bulk fuel distribution business to collect petrol and diesel directly from the Stanlow refinery for the site, and it works to a 6-7p per litre margin.
Ricky Allman says: “We have quite a clear pricing strategy. We take the wholesale price, add the margin we require, and the VAT, and that is the pole price. We don’t look at any of our local competitors to determine what we charge.”
Promoting the prices on social media has been a big win for the business helping it to increase volume from 10mlpa in 2020, to 16.9mlpa last year. On February 20 prices were 123.9p for a litre for unleaded, and 134.9p per litre for diesel.
Roadside Real Estate says that another reason for buying the site, and the land next door, was its large footprint. “We don’t want small landlocked sites, because when fuel declines we have nothing to gain margin from,” says Phillpot. “We look for strong locations with future potential, and space to develop, which the DA Roberts business has, representing a great opportunity for us.”
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