Forecourt retailer Applegreen said that it traded 'ahead of expectations' in the second quarter of its financial year, and has managed to remain profitable at an EBITDA level.
The group made the assessment as it announced the publication of its annual report and accounts for the year ended 31 December.
Business Performance
The group's Welcome Break business, which management anticipated would be the 'most heavily impacted' part of its estate, traded 'in line with expectations' in the second quarter, adding that trading 'continues to improve' as lockdown measures are loosened.
The remainder of its estate traded 'ahead of management expectations', it added, boosted by strong store sales at its filling stations and good fuel margins.
Applegreen said that its cash position is now 'more positive than expected' due to its recent performance, noting that it anticipates that there will be no requirement for the drawdown of existing overdraft facilities or additional revolving credit facilities provided by lenders.
As of 30 June, the group had consolidated net external debt (pre-IFRS 16) of approximately €550 million, comprising €110 million of cash and €660 million of external debt.
Mitigating Actions
While Applegreen expects its Welcome Break business to have 'sufficient liquidity' and covenant headroom for the next 12 months, a 'second wave' of COVID-19, coupled with a second prolonged national lockdown in the UK would require the business to take further mitigating actions, and/or re-negotiate with its lenders.
'Having considered a number of factors including current trading performance, the outcomes of comprehensive forecasting, a range of possible future trading impacts, existing liquidity and amended covenant structures, the board is confident that the group is now well positioned with the recovery continuing in each of our markets,' Applegreen said in a statement.
The group plans to hold its Annual General Meeting on 1 September.
© 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
