Forecourt retailer Applegreen has issued a profit warning for the coming year due to the coronavirus crisis, saying that it is anticipating 'a material reduction in profitability'.
The business said that it has traded 'strongly and inline with management expectations' in the first ten weeks of the current financial year, however footfall and volumes have dropped significantly due to the COVID-19 prevention measures.
It added that it has a 'resilient business model', enabling its stores to remain open, with some seeing 'significantly reduced' food franchise offerings.
Further Developments
As to the scale of the impact on its business, Applegreen said that this depends on 'how the situation develops and over what timeframe, together with the impact of any further measures taken by national governments to mitigate the disruption.
'Accordingly, whilst the Group has not issued financial guidance for current and future years, previously published market expectations should be disregarded.'
2019 Performance
The group made the assessment on the back of strong full-year 2019 results, which saw Applegreen grow group revenue by 53% compared to the previous year, to €3.1 billion.
Group adjusted EBITDA (pre-IFRS) stood at €140.4 million, a 141% increase year-on-year.
Like-for-like revenue in non-fuel was up 4.9%, with the group's non-fuel gross profit rising 5.7% (at constant currency levels).
As of the close of December 2019, Applegreen operated from 556 sites across Ireland, the UK and US.
"We are very pleased with our trading performance and the strategic development of the Group in 2019 where we successfully integrated a number of important acquisitions, expanded our footprint in the US and significantly reduced our reliance on fuel by continuing a shift in focus to convenience retail and food on the go," commented Bob Etchingham, Applegreen chief executive.
On the coronavirus epidemic, he added, "We are highly conscious of the considerable uncertainty created by the current COVID-19 crisis but are confident in the defensiveness of our business model and the strength of our balance sheet and liquidity. Therefore, we are positive about navigating the company through this crisis and building our business for the long term."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
