Applegreen has reported the integration of Welcome Break into the business is going well and could provide greater savings than originally expected, as it published its results for the six months ended 30 June 2019.
It said: “The integration of Welcome Break, which was acquired in October 2018, is going well and significant additional recurring synergies have been identified, which will be delivered in full by end 2021.”
Group revenue increased by 73% compared with the same period last year to €1.5bn and group gross profit increased by 145% to €268.0m. Group adjusted EBITDA increased by 204% to €58.9m.
It reported that the results for the business, excluding Welcome Break, has been aided by very strong liked-for-like growth, with like-for-like growth in fuel revenue of 8.4% and fuel gross profit of 14.3%. Like-for-like growth in non-fuel (food and store) revenue was 5.0% and non-fuel gross profit was up 6.0%.
The group added 11 sites to its estate in the UK and Republic of Ireland over the six months, and acquired 46 sites in the US Mid West, taking it to a total of 483 sites at 30 June 2019, compared with 368 sites a year earlier.
Commenting on the results, CEO Bob Etchingham said: “We are very pleased with our trading performance during the first half year especially from our core Applegreen business. Further initiatives were taken to further develop the business, including recently announced acquisitions in the US.
“Like-for-like revenue and profits from the underlying Applegreen estate, excluding Welcome Break, continued to show strong growth, while significant progress was made on the integration of the Welcome Break business acquired in the UK in Q4 last year. The delivery of anticipated synergy benefits is firmly on track and we see the opportunity for greater savings than originally expected.
“We recently announced two significant acquisitions in the US. A portfolio acquisition of 46 sites located in Minnesota, Wisconsin and Michigan further expands Applegreen’s footprint to this region, while our interest in a consortium acquisition of the Connecticut Service Plazas concession represents a significant strategic step in growing our presence in the US and establishing Applegreen as a recognised operator of larger service area sites on strategic road networks.
“The Welcome Break business has seen growth in core catering but trading was soft during Q1 in peripheral revenue streams. Traffic volumes and turn-ins continued to grow but a slight fall in conversion rates reflects weakened consumer confidence. Post period end, the key summer period demonstrated the resilience of Welcome Break, trading satisfactorily despite the uncertain political and macro-economic conditions.
“Our primary focus in the immediate term remains the delivery of further synergy benefits from Welcome Break, which we now expect to be significantly larger than our previous expectation, and the integration of recent US acquisitions, while continuing on the deleveraging trajectory for the group.”