Zuber Issa is set to complete by the final quarter his £228 million purchase of the 34 UK forecourts still owned by the group he founded with his brother Mohsin.
It comes as Zuber’s ambitious expansion of the EG On The Move brand gathers pace, and indebted EG Group itself continues to take steps to improve profitability and strengthen the balance sheet of the global international fuel-to-food service empire.
In an EG trading update on September 6, Mohsin, who will become sole chief executive of the group, said the divestment of its remaining forecourts business – renamed as EG On The Move after the sale of most of its nearly 400 forecourts to Asda last year – was “on track” to be finalised by the last three months of 2024.
For the three months to June 30, EG said a “stand-out” performance in its US business and earnings growth in Europe had driven an EBITDA increase of 12% to $282 million (£215 million). Group profit increased 5% on a like-for-like basis boosted by “strong fuel and grocery and merchandise performances”.
While total fuel volumes declined marginally, “strong performance in Europe, supported by ongoing favourable market conditions…in Germany” helped to drive a gross profit increase in the fuel segment, it said.
EG runs fuel and food service operations in France, Germany, Italy and the Benelux countries, as well as in the USA and Australia.
In the USA, EG said its “growth initiatives” included focusing on improving fuel volumes by investing in growing market segments, including business-to-business and premium fuel.
EG does not disclose its latest revenues in its trading statement, but in quarter one these declined 2.7% to $5.89 billion. For the full year 2023, EG disclosed $1.4 billion pre-tax profits on $28.3 billion revenues.
When EG said in June it was selling its remaining forecourts to Zuber, along with some food service sites, it noted that the younger sibling was keen to “to return to his entrepreneurial UK routes” and spend more time on his charity work.
The proceeds of the sale will be used to pay down EG debt after an expansion spree over several years that has seen the Blackburn-based company expand its international portfolio and acquire a majority stake in supermarket chain Asda from Walmart for £6.8 billion in a deal backed by TDR Capital.
However, recent months have seen EG rationalise its operations to reduce its borrowings. In May last year it began the transfer of 350 forecourts to its sister business Asda. In April this year, it completed the sale of 216 KFC franchised restaurants to Yum!
Once the EG On The Move deal goes through, Zuber will step down as co-chief executive of EG, although he will retain his existing shareholding in the group and remain on its board as a non-executive director. In June he sold his personal stake in Asda to TDR.
Since the divestment of the forecourt business was announced, Zuber has begun an expansion programme with EG On The Move, appointing a real estate company to acquire more than 120 new sites.
In July, Co-op also signed a franchise agreement with EG On The Move to open convenience stores on seven forecourt locations.
Three of his latest openings were forecourts in Scotland, which began trading in August.
