Forecourt retailer Applegreen has said that its core estate in Ireland, the UK and the US is 'performing ahead of original assumptions at the outset of the [COVID-19] pandemic', with the group expecting to be cash positive from June onwards.
It said that all its sites have remained open, with current trading levels 'ahead of baseline assumptions' for the second quarter, while a reduction in its working capital levels is 'consistent with expectations'.
It said that its Welcome Break estate, which it acquired in 2018, has been the most heavily impacted part of the business, and is likely to see a more gradual recovery in volumes as COVID-19 restrictions are lifted.
Banking Facilities
Applegreen said that it has completed a process to access additional banking facilities, and 'secure its liquidity' for the likely duration of the COVID-19 epidemic.
The group said that it has converted €52.5 million of the accordion facility in its existing Applegreen plc banking facilities into its revolving credit facility, which represents an increase to the committed funding available for the remaining term through to October 2023.
It added that it is continuing to 'work constructively' with the lenders of the Welcome Break banking facilities and expects to reach a similar conclusion from these discussions.
In a statement, Applegreen said 'Whilst it is important to have additional headroom in our facilities, we do not anticipate drawing down these additional facilities. We reiterate our view that we have sufficient cash to get us through this cycle based on a scenario where movement continues to be severely restricted to the end of May with the expectation that restrictions will then ease gradually before normalising in Q4.
'We also expect to have adequate existing cash resources to trade through a downside scenario where the recovery period is more prolonged, to the end of 2021.'
Cost Reduction
Applegreen said that it is continuing to focus on cost reduction, with its executive directors seeing a reduction in salary of 20% for a period of three months, starting 1 April.
It has also implemented graduated salary cost reductions on a temporary basis for support staff across the organisation, it said.
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