Forecourt operator Applegreen has said that its trading performance is up on the same period last year, with the business adding some 24 new sites to its portfolio since the end of 2017.
In addition, the business has signed a deal – which it expects to close later this year – to lease a network of filling stations in Florida.
Here's how leading retail analysts viewed Applegreen's performance.
"Progressing Well"
Commenting on its performance, Allan Smylie of Davy Stockbrokers said that the statement indicated that Applegreen's US operations are "progressing well", with the weather and fuel price headwinds simply "short-term noise".
"The key takeaway, from our perspective, is that development activity continues to progress well, with 24 new sites added year-to-date [YTD] and an agreement with CrossAmerica Partners to lease 43 sites in Florida later this year," Smylie said.
"The H1 2018 headwinds from the colder weather and rising fuel prices are one-off/phasing items, respectively," he added.
Elsewhere, Darren Shirley of Shore Capital Stockbrokers said that Applegreen issued a "reassuring and resilient trading update, confirming ongoing YOY growth, despite some periodic short-term trading challenges".
In particular, the broker said that it was "very encouraged" that Applegreen had announced the next phase of its 'capital light' expansion strategy in the US.
"Applegreen has a growing track record of growth, has asset support, and delivers high and sustainable returns on investment," Shirley commented.
"A combination of RoI, UK and capital-light USA growth is attractive, in our view, meaning: Applegreen continues to merit its premium valuation," he added.
"Broadly Neutral"
In addition, Jason Molins of Goodbody Stockbrokers said that it considered Applegreen's trading update "broadly neutral, with no material changes to forecasts expected.
"Furthermore, the announcement of a further deal in the US highlights the growth prospects in the region, as the company expands its footprint in the south-east, following the Brandi Group acquisition, which completed towards the end of FY17," said Molins.
Finally, Cantor Fitzgerald noted that the statement 'highlighted [Applegreen's] positive start' to the year.
It maintained its outperform rating, but advised its clients 'to wait until it reaches a more attractive valuation'.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
