Top 50 Indie Applegreen has announced a number of short-term actions to conserve cash during the uncertainty caused by the coronavirus pandemic.
The group’s 2019 results are due to be released on Friday March 27 and it said profitability for 2019 would be in line with market consensus, driven by solid like-for-like growth across the business, particularly in non-fuel.
It added that Applegreen has traded strongly and in line with management expectations for the first 10 weeks of 2020. However, footfall and volumes have been affected in the past two weeks as governments and customers take increasing measures to contain the spread of the virus.
Currently, all of its stores remain open, but it said it expected a reduction in profitability for the current financial year, with the scale dependent on how the situation develops.
In order to conserve cash in the short term it announced it would be:
• Deferring development capital expenditure;
• Reducing operating cost base;
• Tightening management of working capital, including stock levels;
• Implementing a recruitment freeze;
• Deferring executive director bonuses;
• Availing of newly introduced government relief measures;
• Opening negotiations with landlords on rental holidays.
In addition, in order to preserve liquidity, the Board has decided not to recommend a final dividend in relation to 2019 at its AGM. It added that its banks remain supportive and it would update the market more fully in the preliminary results statement.
It concluded: “While the current crisis presents multiple challenges, the Board remains confident in the strategy over the longer term and believes the Group will be well positioned to benefit from the normalisation in trade across the three regions.”