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Applegreen PLC (APGN)

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Friday 21 September, 2018

Applegreen PLC

Half-year Report

RNS Number : 4780B
Applegreen PLC
21 September 2018
 

Applegreen plc

Results for the six months ended 30 June 2018

 

Dublin, London, 21 September 2018:   Applegreen plc ('Applegreen' or 'the Group'), a major service station retailer with operations in the Republic of Ireland, the United Kingdom and the United States announces its unaudited interim results for the six months ended 30 June 2018.

 

Financial highlights:

 

·     Group revenue increased by 27% on H1 2017 (€672.5m) to €854.9m (30% on a constant currency basis)

 

·     Adjusted EBITDA increased by 17% to €19.4m in H1 2018 from €16.6m in H1 2017 (18% on a constant currency basis)

 

·     Gross profit increased by 33% on H1 2017 (36% at constant currency)

 

·     Like for like growth of 3.5% in non-fuel gross profit (food and store) at constant currency

 

·     Continued investment in the network with capex for the period of €30.3m

 

·     Net debt position at 30 June 2018 of €9.1m (31 December 2017: €10.2m)

 

·     Interim dividend of 0.63 cent per share (H1 2017: 0.60 cent per share)

 

Operational highlights:

 

·     Grew the estate by 26 sites to 368 sites as at 30 June 2018 (31 December 2017: 342)

 

·     Opened 14 new food outlets in the period to bring our total to 274 outlets

 

·     As previously indicated, severe weather in March disrupted activities in each of our three markets

 

·     Agreement to lease a network of 43 Petrol Filling Station sites in Florida from CrossAmerica Partners LP ("CAP"), expected to close in September 2018

 

 

Key figures:

 

30 June 2018

30 June 2017

Change 

Gross Profit (€m)

109.2

82.2

32.8%

Adjusted EBITDA* (€m)

19.4

16.6

16.9%

Adjusted Profit before Tax* (€m)

10.1

10.1

0.0%

Adjusted EPS

 9.46

 10.82

(12.6%)

*Adjusted for share based payments and non-recurring charges

 

 

Acquisition of a Majority Interest in Welcome Break:

 

The Group announced on 2 August 2018 (the "Acquisition Announcement"), that it had entered into contracts which, upon completion, would result in it holding a 50.01% stake in Welcome Break (the "Transaction"). Welcome Break is a leading UK Motorway Service Area operator with a portfolio of 24 MSAs, two TRSAs and 29 hotels across 35 locations in the United Kingdom. For further detail on the Transaction, which constitutes a reverse takeover under the ESM Rules for Companies and the AIM Rules for Companies, please see the Acquisition Announcement.

 

Management Comments:

 

Commenting on the results, Bob Etchingham, CEO said: "We are pleased with the performance of our business during 2018. Applegreen is entering an exciting phase of growth in the UK service area market with the recent announcement of the Welcome Break transaction. This will be transformational for Applegreen by giving us critical mass in a key market and is expected to close in Q4 2018."

 

"The business continued to expand in each of our three markets as we increased our estate by 26 sites to a total of 368 locations trading at the end of the period. We opened seven new sites in the Republic of Ireland, 15 in the UK and four in the US in H1 2018."

 

"Our financial performance for the first six months of 2018 has been robust notwithstanding the difficult trading conditions caused by the exceptional weather in March, especially in our Irish business. Apart from the impact of this one off event, the underlying business continues to perform well and we remain confident in the prospects for the business in 2018."

 

About Applegreen

Established in 1992, Applegreen is a major petrol forecourt retailer with operations in the Republic of Ireland, the United Kingdom and the USA. The Group is pursuing a growth strategy focused on acquiring and developing new Service Area and Petrol Filling Station sites in each of the three markets in which it operates. As at 30 June 2018, the business operated 368 forecourt sites and employed c5,300 people. 

 

The Group offers a distinctive convenience retail offering with three key elements:

·     A "low fuel prices, always" price promise to drive footfall to the stores;

·     A "Better Value Always" tailored retail offer; and

·     A strong food and beverage focus aiming to offer premium products and service to the customer.

 

Applegreen has a number of strategic partnerships with international brands including Burger King, Subway, Costa Coffee, Greggs, Lavazza, Chopstix, Freshii and 7-Eleven.  The business also has its own food offer through the Bakewell café brand. 

 

Applegreen is the number one Motorway Service Area operator in the Republic of Ireland.

 

 

 

For further enquiries, please contact:

 

Applegreen

Bob Etchingham (CEO)                                                                                  +353 (0) 1 512 4800

Niall Dolan (CFO)

 

Drury Porter Novelli

Paddy Hughes                                                                                                   +353 (0) 1 260 5000

 

Shore Capital

Stephane Auton                                                                                               +44 (0) 20 7408 4090

Patrick Castle

 

Goodbody

Joe Gill                                                                                                                 +353 (0) 1 667 0420

Siobhan Wall

Richard Tunney

 

 

 

 

Applegreen H1 2018 Performance Overview and Outlook

 

Growth in H1 2018 was driven by positive performance from the 2017 acquisitions and good like for like growth in food and store, notwithstanding the impact of severe weather during the period.

 

A strong economic backdrop, together with the full year impact of the 2017 site upgrade and rebranding activity, saw like for like food and store sales and gross profit grow by 3.5% on a constant currency basis.

 

During the period, we expanded our portfolio with 26 new sites, comprising seven in the ROI, 15 in the UK and four in the USA. Of the 26, three were dealer sites and 23 were company owned sites.

 

This development activity has resulted in 14 additional branded food offers being added to our estate in the period.

 

 

Republic of Ireland

 

In the period ended 30 June 2018, revenue in the Republic of Ireland increased by 5.8% and gross profit increased by 10.9%.

 

Total fuel gross profit increased by 9.1% compared to H1 2017 and increased by 3.7% on a like for like basis. This reflected the impact of additional contribution from the Joint Fuel Terminal acquisition in Dublin.

 

Like for like food and store sales increased year on year by 3.1% and related gross profit grew by 1.8%. This was against a backdrop of severe weather disruption in much of ROI in February and March which impacted food to go sales at Service Areas in particular.

 

Our dealer and fuel card volumes have continued to grow and now account for 31% of ROI fuel volumes on a combined basis.

 

During the period, we expanded our Republic of Ireland estate by seven sites which included two Service Area sites, two Petrol Filling Station sites and three dealer sites. 88% of the ROI estate is branded Applegreen (2017: 88%). There were a total of 184 sites trading at the end of the period.

 

 

United Kingdom

 

In the period ended 30 June 2018, revenue in the UK increased by 33.0% and gross profit by 26.5% largely due to the continued expansion of the estate (35.9% and 29.3%, respectively, on a constant currency basis).

 

Total fuel gross profit in the UK increased by 16.3% compared to H1 2017 and decreased by 6.6% on a like for like constant currency basis. The like for like performance was against a very strong comparative period in H1 2017 (where equivalent LFL growth was 18.6%) and reflects the competitive pricing pressures, weather disruption and rising oil commodity prices in H1 2018.

 

Conversely, the UK delivered a very strong performance in non-fuel where combined food and store sales and gross profit rose year on year by 32.5% and 36.6% respectively. On a like for like constant currency basis, these sales were 5.0% ahead of the same period last year while related gross profit grew by 9.8% reflecting good growth particularly in food.

 

The Group opened 15 new Petrol Filling Stations in the UK during the period. At 30 June 2018 there were 112 sites trading.

 

 

USA

 

During the period, the Group added four new sites in the USA, all of which were based in the North East, and had 72 sites trading in the USA at the end of the period.

 

Post period end, in August 2018, we completed the acquisition of a group of seven sites in Columbia, South Carolina which involved a leasehold arrangement with Getty Realty.

 

In June 2018 we announced an agreement to lease a network of 43 Petrol Filling Station sites located in Florida from CrossAmerica Partners LP ("CAP"). The sites have been taken over during September 2018.

 

 

Costs

 

Selling and distribution expenses, excluding rent and depreciation rose by 38.2% year on year due primarily to the site acquisitions in the US and UK in late 2017. In particular, the site additions in the US included a number of food offerings with associated payroll and utility costs which contributed to this increase.

 

Rent costs now incorporate lease rental for the South Carolina sites acquired in the Brandi transaction in Q4 2017. 

 

Administrative expenses, excluding share based payment expense, non-recurring costs and depreciation grew by 27.6% driven by business growth, targeted marketing campaigns and further investment in management capacity.

 

 

 Further Development Activities

 

We continue to develop our network in 2018 adding four new stand-alone sites since 30 June 2018 as well as completing the acquisitions of a seven site group based in South Carolina and a network of 43 Petrol Filling Station sites in Florida.

 

We have a good pipeline of further developments of both Service Area sites and Petrol Filling Stations across our markets.

 

Dividend

 

The Board has proposed a final dividend of 0.63 cent per share (H1 2017: 0.60 cent per share) which will be paid on 19 October 2018 to shareholders on the register as at 28 September 2018.

 

 

UNAUDITED CONSOLIDATED INCOME STATEMENT

PERIOD ENDED 30 JUNE 2018

 

 

Notes

6 months to 30 June 2018

 

6 months to 30 June 2017

 

 

€000

 

€000

Revenue

 

854,932

 

672,511

Cost of sales

5

(745,749)

 

(590,286)

Gross profit

 

109,183

 

82,225

 

 

 

 

 

Selling and distribution costs

5

(82,595)

 

(58,950)

Administrative expenses

5

(18,265)

 

(14,854)

Other income

 

1,394

 

815

Finance costs

6

(819)

 

(507)

Finance income

6

232

 

184

Profit before income tax

 

9,130

 

8,913

 

 

 

 

 

Income tax expense

7

(1,385)

 

(1,344)

Profit for the financial period

 

7,745

 

7,569

 

Earnings per share from continuing operations attributable to the owners of the parent company during the period

 

 

 

 

 

Earnings per share - Basic

4

8.45c

 

9.39c

Earnings per share - Diluted

4

8.34c

 

9.01c

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD ENDED 30 JUNE 2018

 

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

€000

 

€000

Profit for the financial period

7,745

 

7,569

Other comprehensive income/(expense)

 

 

 

Items that may be reclassified to profit or loss

 

 

 

Currency translation differences on foreign operations

765

 

(1,495)

Other comprehensive income/(expense) for the period, net of tax

765

 

(1,495)

Total comprehensive income for the period

8,510

 

6,074

 

 

 

 

 

 

 

 

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

 

Assets

Notes

June 2018

 

Dec 2017

Non-current assets

 

€000

 

€000

Intangible assets

8

20,283

 

16,150

Property, plant and equipment

9

317,160

 

299,574

Investment in joint venture

 

1,000

 

1,000

Trade and other receivables

11

407

 

422

Deferred income tax asset

 

6,528

 

5,718

 

 

345,378

 

322,864

Current assets

 

 

 

 

Inventories

10

39,966

 

35,228

Trade and other receivables

11

32,119

 

23,171

Current income tax receivables

 

88

 

88

Cash and cash equivalents

12

54,612

 

57,482

 

 

126,785

 

115,969

Total assets

 

472,163

 

438,833

 

 

 

 

 

Equity and liabilities

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

Issued share capital

15

917

 

916

Share premium

 

190,630

 

190,464

Capital contribution

 

512

 

512

Merger reserve

 

(65,537)

 

(65,537)

Currency translation reserve

 

(6,053)

 

(6,818)

Share based payment reserve

 

9,100

 

8,181

Retained earnings

 

59,118

 

53,591

Total equity

 

188,687

 

181,309

 

 

 

 

 

Non-current liabilities

 

 

 

 

Trade and other payables

14

5,347

 

5,534

Borrowings

13

55,171

 

63,132

Deferred income tax liabilities

 

7,701

 

7,854

 

 

68,219

 

76,520

Current liabilities

 

 

 

 

Trade and other payables

14

205,155

 

174,901

Borrowings

13

8,518

 

4,545

Current income tax liabilities

 

1,584

 

1,558

 

 

215,257

 

181,004

Total liabilities

 

283,476

 

257,524

 

 

 

 

 

Total equity and liabilities

 

472,163

 

438,833

 

 

 

 

 

 

 

UNAUDITED Consolidated statement of changes in equity

AS AT 30 JUNE 2018

 

 

Issued capital

Share premium

 

 

Capital contribution

Merger reserve

Foreign currency translation reserve

Share based payment reserve

Retained earnings

Total

 

€000

€000

€000

€000

€000

€000

€000

€000

 

 

 

 

 

 

 

 

 

At 01 January 2017

805

140,268

512

(65,537)

(4,049)

5,349

37,663

115,011

Profit for the period

-

-

-

-

-

-

7,569

7,569

Other comprehensive income

-

-

-

-

(1,495)

-

-

(1,495)

Total comprehensive income

-

-

-

-

(1,495)

-

7,569

6,074

Issue of ordinary share capital

3

347

-

-

-

-

-

350

Share based payments

-

-

-

-

-

757

-

757

Dividends

-

-

-

-

-

-

(1,009)

(1,009)

At 30 June 2017

808

140,615

(65,537)

(5,544)

6,106

44,223

121,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 01 January 2018 (as previously reported)

916

190,464

512

(65,537)

(6,818)

8,181

53,591

181,309

Adjustment from adoption of IFRS 9 (note 2)

-

-

-

-

-

-

(1,485)

(1,485)

Adjusted balance at 01 January 2018

916

190,464

512

(65,537)

(6,818)

8,181

52,106

179,824

Profit for the period

-

-

-

-

-

-

7,745

7,745

Other comprehensive income

-

-

-

-

765

-

-

765

Total comprehensive income

-

-

-

-

765

-

7,745

8,510

Issue of ordinary share capital (note 15)

1

166

-

-

-

-

-

167

Share based payments

-

-

-

-

-

919

-

919

Dividends

-

-

-

-

-

-

(733)

(733)

At 30 June 2018

917

190,630

512

(65,537)

(6,053)

9,100

59,118

188,687

 

 

UNAUDITED Consolidated statement of cash flows

PERIOD ENDED 30 JUNE 2018

 

 

Notes

June 2018

 

June 2017

Cash flows from operating activities

 

€000

 

€000

Profit before income tax

 

9,130

 

8,913

Adjustments for:

 

 

 

 

Depreciation and amortisation

5

8,716

 

6,256

Finance income

6

(232)

 

(184)

Finance costs

6

819

 

507

Share based payment expense

5

349

 

757

Loss on the disposal of property, plant and equipment

5

8

 

255

 

 

18,790

 

16,504

 

 

 

 

 

Increase in trade and other receivables

 

(11,804)

 

(2,657)

(Increase)/decrease in inventories

 

(4,587)

 

2,146

Increase in trade payables

 

30,636

 

4,362

Cash generated from operations

 

33,035

 

20,355

Income taxes paid

 

(1,366)

 

(583)

Net cash from operating activities

 

31,669

 

19,772

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(27,232)

 

(28,745)

Purchase of intangibles

 

(3,925)

 

(2,388)

Investment in joint venture

 

-

 

(1,000)

Proceeds from sale of property, plant and equipment

 

-

 

166

Interest received

 

300

 

-

Net cash used in investing activities

 

(30,857)

 

(31,967)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from long-term borrowings

 

5,000

 

25,000

Proceeds from issue of ordinary share capital

 

167

 

350

Repayment of borrowings

 

(11,520)

 

(1,743)

Payment of finance lease liabilities

 

(374)

 

(421)

Interest paid

 

(702)

 

(770)

Dividends paid

 

-

 

(1,009)

Net cash (used in)/from financing activities

 

(7,429)

 

21,407

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(6,617)

 

9,212

Cash and cash equivalents at beginning of period

 

57,482

 

27,739

Exchange gains/(losses)

 

148

 

(311)

Cash and cash equivalents at end of period

12

51,013

 

36,640

 

 

 

 

 

 

 

 

 

 

 

Notes to the unaudited consolidated financial information

 

1. General information and basis of preparation

Applegreen plc ('the Company') is a company incorporated in the Republic of Ireland. The Unaudited Consolidated Financial Information of the Company for the six months ended 30 June 2018 (the 'Financial Information') includes the Company and its subsidiaries (together referred to as the 'Group'). The Company is incorporated and tax resident in Ireland. The address of its registered office is Block 17, Joyce Way, Parkwest, Dublin 12.

 

The consolidated financial statements of the Group are prepared in accordance with Irish law and International Financial Reporting Standards ('IFRS') and their interpretations issued by the International Accounting Standards Board ('IASB') and adopted by the European Union ('EU'). The financial information in this report has been prepared in accordance with the Group's accounting policies. Full details of the accounting policies adopted by the Group are contained in the Consolidated Financial Statements included in the Group's annual report for the year ended 31 December 2017 which is available on the Group's website: http://applegreenstores.com.

 

The accounting policies and methods of computation and presentation adopted in the preparation of the Financial Information are consistent with those described and applied in the annual report for the financial year ended 31 December 2017 with the exception of the adoption of IFRS 9, Financial Instruments and IFRS 15, Revenue from Contracts with Customers which are described below. A number of other changes to IFRS became effective in 2018; however, they did not have a material effect on the condensed consolidated interim financial information included in this report.

 

The Interim Financial Statements do not constitute statutory financial statements. The statutory financial statements for the year ended 31 December 2017, extracts of which are included in these Interim Financial Statements, were prepared under IFRS as adopted by the EU and have been filed with the Companies Registration Office. The auditors' report on those financial statements was unqualified and did not contain an emphasis of matter paragraph.

 

The Financial Information is presented in Euro, rounded to the nearest thousand, which is the functional currency of the parent company and also the presentation currency of the Group.

 

The preparation of the Financial Information requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results could differ materially from these estimates. In preparing the Financial Information, the critical judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2017 as set out on pages 89 to 90 in those financial statements, with the addition of the following:

 

Impairment of financial assets:

The Group adopted IFRS 9 from 01 January 2018. IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. See below for further details. The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

 

 

Notes to the unaudited consolidated financial information

 

2. Significant accounting policies

The accounting policies applied in the Financial Information are consistent with those applied in the consolidated financial statements as at and for the year ended 31 December 2017, and are described in those financial statements on pages 79 to 88, except for the impact of the matters described below.

 

New standards adopted by the Group

The Group adopted IFRS 9, Financial Instruments, and IFRS 15, Revenue from Contracts with Customers, with effect from 01 January 2018.

 

IFRS 9 Financial Instruments

IFRS 9 replaces the provisions of IAS 39 Financial Instruments: Recognition and Measurement that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.

 

The adoption of IFRS 9 from 01 January 2018 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements. The new accounting policies are set out in this note. In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated.

 

The total impact on the Group's retained earnings as at 01 January 2018 is as follows:                   

 

 

2018

 

 

€000

Opening retained earnings 01 January 2018 (before restatement for IFRS 9)

 

53,591

Gain from modification of financial liabilities (1)

 

877

Increase in provision for financial assets measured at amortised cost (2)

 

(2,755)

Increase in deferred tax relating to increase in provisions (2)

 

393

Restated retained earnings 01 January 2018 (post restatement for IFRS 9)

 

52,106

 

(1) The Group refinanced its borrowings during 2015. In accordance with IAS 39, the modification of the loan terms was not considered to result in an extinguishment of the initial borrowings. At the date of the modification no gain was recognised in profit or loss. Instead, the Group discounted the cash flows of the modified borrowings at a revised effective interest rate which meant that the impact of the changes in cash flows was recognised over the remaining modified term of the borrowings.  

Under IFRS 9, the cash flows of the modified borrowings must be discounted at the original effective interest rate. This would have resulted in the recognition of an immediate gain in profit or loss at the date of the modification. As the Group has chosen not to restate comparatives in adopting IFRS 9, it has recognised an adjustment of €0.9 million to reduce non-current borrowings for the gain on 01 January 2018 with a corresponding impact on retained earnings.  Any subsequent modification or extinguishment of financial liabilities will be recorded as a gain / loss in the Consolidated Income Statement.   

(2) The adoption of IFRS 9 has fundamentally changed the Group's accounting for impairment losses for financial assets by replacing IAS 39's incurred loss approach with a forward-looking expected credit loss (ECL) approach. Under IFRS 9, credit losses are recognised earlier than they would be in IAS 39. IFRS 9 requires the Group to record an allowance for ECLs for all loans and other debt financial assets not held at fair value through the profit and loss account.

 

  

Notes to the unaudited consolidated financial information

 

2. Significant accounting policies (continued)

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. For trade and other receivables, the Group has applied the standard's simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group's historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

 

The Group considers a financial asset in default when contractual payment are 180 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. The adoption of the ECL requirements of IFRS 9 resulted in increases in impairment allowances for the Group's financial assets measured at amortised cost. The increase in allowance resulted in a €2.8 million impairment provision along with corresponding increase to deferred tax asset of €0.4m and a net adjustment to retained earnings of €2.4m at 01 January 2018. 

 

IFRS 15 Revenue from Contracts with Customers

IFRS 15, Revenue from Contracts with Customers, replaces IAS 18, Revenue and IAS 11, Construction Contracts and related interpretations. IFRS 15 establishes a five-step model for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. IFRS 15 requires an entity to recognise revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for transferring those goods or services to the customer. Revenue is recognised when an identified performance obligation has been met and the customer can direct the use of and obtain substantially all the remaining benefits from a good or service. The Group has adopted IFRS 15 from 01 January 2018, using the modified retrospective approach and has not restated comparatives for 2017.

 

The Group used the five-step model to develop an impact assessment framework to assess the impact of IFRS 15 on the Group's revenue transactions. The results of our IFRS 15 assessment indicated that the impact of applying IFRS 15 on our consolidated financial statements was not material for the Group and there was no adjustment to retained earnings on application of the new rules at 01 January 2018. The adoption of IFRS 15 has had no material impact on the principles applied by the Group for reporting the nature, amount and timing of revenue recognition. Contracts with customers can be readily identified throughout the Group and include a single performance obligation to sell fuel, food and shop products. Revenue is recognised when control of the goods are transferred to the customer, which for the Group is at a point in time when the Group sells a product to the customer.

 

  

Notes to the unaudited consolidated financial information

 

3. Segmental analysis

Applegreen plc is a forecourt retail business headquartered in Dublin, Ireland. Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the Board of Executive Directors.

 

The board considers the business from both a geographic and product perspective. Geographically, management considers the performance in Ireland, the UK and the USA. From a product perspective, management separately considers retail activities in respect of the sale of fuel, food and other groceries within Ireland, the UK and in the USA.

 

The Group is organised into the following operating segments:

Retail Ireland - Involves the sale of fuel, food and store within the Republic of Ireland.

Retail UK - Involves the sale of fuel, food and store within the United Kingdom.

Retail USA - Involves the sale of fuel, food and store within the United States of America.

 

The CODM monitors Revenue and Gross Profit of segments separately in order to allocate resources between segments and to assess performance.

 

Information regarding the results of each reportable segment is included within this note. Segment performance measures are revenue and gross profit as included in the internal management reports that are reviewed by the executive directors. These measures are used to monitor performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. The CODM also reviews adjusted EBITDA on a consolidated basis. Assets and liabilities are reviewed by the CODM for the Group in its entirety and as such segment information is not provided for these items.

 

Analysis of Revenue and Gross Profit

June 2018

IRL

UK

USA

Total

Revenue

€000

€000

€000

€000

Fuel

301,506

314,844

65,712

682,062

Food

39,395

12,535

10,630

62,560

Store

65,419

29,483

15,408

110,310

 

406,320

356,862

91,750

854,932

Gross Profit

 

 

 

 

Fuel

19,682

13,035

6,013

38,730

Food

24,390

6,502

6,195

37,087

Store

19,255

9,073

5,038

33,366

 

63,327

28,610

17,246

109,183

 

 

 

 

 

 

 

 

Notes to the unaudited consolidated financial information

 

3. Segmental analysis (continued)

 

Analysis of Revenue and Gross Profit

June 2017

IRL

UK

USA

Total

Revenue

€000

€000

€000

€000

Fuel

290,332

236,694

17,481

544,507

Food

35,951

9,658

39

45,648

Store

57,758

22,048

2,550

82,356

 

384,041

268,400

20,070

672,511

Gross Profit

 

 

 

 

Fuel

18,041

11,208

1,666

30,915

Food

22,325

4,830

18

27,173

Store

16,744

6,576

817

24,137

 

57,110

22,614

2,501

82,225

 

 

 

 

 

At 01 January 2018, the Group updated its cost allocation model in relation to its distribution centre. Therefore, in order to show a true comparison, the 2017 figures have been reclassified in line with the updated methodology.

 

Reconciliation of profit before income tax to earnings before interest, tax, depreciation and amortisation (EBITDA), share based payments and other non-recurring charges (Adjusted EBITDA)

 

 

 

Notes

6 months to 30 June 2018

 

6 months to 30 June 2017

 

 

€000

 

€000

Profit before income tax

 

9,130

 

8,913

Depreciation

5

8,287

 

6,096

Amortisation

5

429

 

160

Net finance cost

6

587

 

323

EBITDA

 

18,433

 

15,492

Share based payments

5

349

 

757

Non-recurring charges

5

571

 

398

Adjusted EBITDA

 

19,353

 

16,647

 

 

 

Notes to the unaudited consolidated financial information

 

4. Earnings per share

 

Basic earnings per share

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

 

€000

 

€000

Profit from continuing operations attributable to the owners of the Company

 

7,745

 

7,569

Weighted average number of ordinary shares in issue for basic earnings per share

 

91,607

 

80,647

Earnings per share - Basic

 

8.45c

 

9.39c

 

 

 

 

 

 

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

Diluted earnings per share

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

 

€000

 

€000

Profit from continuing operations attributable to the owners of the Company

 

7,745

 

7,569

Weighted average number of ordinary shares in issue

 

91,607

 

80,647

Adjusted for:

 

 

 

 

Share options

 

1,273

 

3,328

Weighted average number of ordinary shares for diluted earnings per share

 

92,880

 

83,975

Earnings per share - Diluted

 

8.34c

 

9.01c

 

5. Expenses

Profit before tax is stated after charging/(crediting):

 

 

6 months to 30 June 2018

 

6 months to 30 June 2017

 

€000

 

€000

Cost of inventory recognised as expense

731,053

 

577,907

Other external charges

14,696

 

12,379

Employee benefits

47,807

 

35,555

Operating lease payments

11,785

 

8,006

Amortisation of intangible assets

429

 

160

Depreciation of property, plant and equipment

8,287

 

6,096

Share based payment charge

349

 

757

Net foreign exchange loss/(gain)

8

 

(14)

Loss on disposal of assets

8

 

255

Utilities

4,543

 

3,103

Rates

3,352

 

2,756

Non recurring charges (1)

571

 

398

Other operating charges

23,721

 

16,732

 

846,609

 

664,090

 

 

Notes to the unaudited consolidated financial information

 

5. Expenses (continued)

 

Comparative figures for employee benefits have been reclassified to be consistent with the current period presentation.

 

(1) Non recurring charges relate to business combination acquisition costs on deals announced in 6 months to June 2018 and expected to close in the second half of the year and costs incurred in relation to the upgrade of our financial ERP system.

 

6. Finance costs and income

 

6 months to 30 June 2018

 

6 months to 30 June 2017

Finance costs

€000

 

€000

Interest payable on amounts owed to credit institutions

881

 

762

Variance on translation of foreign borrowings *

12

 

(260)

Lease finance charges and hire purchase interest

59

 

126

Borrowing costs capitalised

(133)

 

(121)

 

819

 

507

 

Finance income

 

 

 

Interest income on loans to joint venture

(232)

 

(184)

 

(232)

 

(184)

Net finance cost

587

 

323

 

* The variance on translation of foreign borrowings arises in respect of non-Euro denominated debt.

 

7. Taxation

 

6 months to 30 June 2018

 

6 months to 30 June 2017

Current tax

€000

 

€000

Current tax expense

1,388

 

894

Total current tax

1,388

 

894

Deferred tax

 

 

 

Origination and reversal of temporary differences

(3)

 

450

Total deferred tax

(3)

 

450

Total tax

1,385

 

1,344

 

 

 

 

 

Notes to the unaudited consolidated financial information

 

8. Intangible assets

 

Goodwill

Branding

Operating agreements

Franchises

Licences

Assets under construction

Total

Cost

€000

€000

€000

€000

€000

€000

€000

At 01 January 2018

3,691

429

597

5,521

1,607

5,414

17,259

Additions

-

-

142

115

257

3,930

4,444

Disposals

-

-

-

(5)

-

-

(5)

Translation adjustment

5

12

-

117

-

-

134

At 30 June 2018

3,696

441

739

5,748

1,864

9,344

21,832

 

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

 

At 01 January 2018

-

21

204

286

598

-

1,109

Disposals

-

-

-

(1)

-

-

(1)

Amortisation charge

-

43

64

236

86

-

429

Translation adjustment

-

2

-

10

-

-

12

At 30 June 2018

-

66

268

531

684

-

1,549

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

30 June 2018

3,696

375

471

5,217

1,180

9,344

20,283

01 January 2018

3,691

408

393

5,235

1,009

5,414

16,150

 

Assets under construction as at 30 June 2018 relate to development costs incurred in the upgrade of the Group's financial ERP system.
 

Notes to the unaudited consolidated financial information

 

9. Property, plant and equipment

 

 

Land and Buildings

Plant and equipment

Fixtures, fittings and motor vehicles

Computer hardware and software

Assets under construction

Total

Cost

€000

€000

€000

€000

€000

€000

At 01 January 2018

220,113

32,889

80,915

11,153

17,101

362,171

Additions

7,439

2,900

6,459

984

8,069

25,851

Disposals

(119)

(103)

(402)

(17)

(4)

(645)

Reclassifications

1,413

88

99

26

(1,626)

-

Translation adjustment

204

100

61

6

260

631

At 30 June 2018

229,050

35,874

87,132

12,152

23,800

388,008

 

 

 

 

 

 

 

Depreciation/impairment

 

 

 

 

 

 

At 01 January 2018

34,319

3,585

20,142

4,551

-

62,597

Charge for the period

1,886

1,008

4,229

1,164

-

8,287

Disposals

(2)

(25)

(27)

(4)

-

(58)

Translation adjustment

8

9

4

1

-

22

At 30 June 2018

36,211

4,577

24,348

5,712

-

70,848

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

30 June 2018

192,839

31,297

62,784

6,440

23,800

317,160

01 January 2018

185,794

29,304

60,773

6,602

17,101

299,574

 

Assets under construction as at 30 June 2018 includes the following significant projects; eight service stations in the Republic of Ireland (€13.3m), six service stations in the US (€6.2m), one motorway service area in Northern Ireland (€0.7m) and three service stations in the UK (€0.2m). The remaining amounts relate to several other developments across all regions.

 

Notes to the unaudited consolidated financial information

 

10. Inventories

 

 30 June 2018

 

31 Dec 2017

 

€000

 

€000

Raw materials and consumables

1,743

 

1,203

Finished goods

38,223

 

34,025

 

39,966

 

35,228

 

The cost of inventories recognised as an expense and included in 'cost of sales' amounted to €731m (June 2017: €578m).

 

11. Trade and other receivables

 

 30 June 2018

 

31 Dec 2017

Current

€000

 

€000

Trade receivables

16,255

 

9,485

Provision for impairment

(899)

 

(242)

Deposits received from customers

(50)

 

(83)

Net trade receivables

15,306

 

9,160

Accrued income

3,766

 

3,740

Prepayments

8,915

 

4,846

Other debtors

4,025

 

2,980

Withholding tax receivable

24

 

24

VAT receivable

-

 

11

Amounts due from related companies

83

 

2,410

 

32,119

 

23,171

Non-current

 

 

 

Other debtors

407

 

422

 

407

 

422

 

Current trade and other receivables are non-interest bearing and are generally less than 30 day credit terms. Non-current debtors relate to loans advanced to our dealer network. The fair value of non-current trade and other receivables is equivalent to their carrying value. The fair value has been determined on the basis of discounted cash flows.

 

Following the adoption of IFRS 9 as of 01 January 2018, the Group recognised an additional expected credit loss of €2.8m. See note 2 for details.

 

 

 

Notes to the unaudited consolidated financial information

12. Cash and cash equivalents

Cash and cash equivalents included in the Unaudited Consolidated Statement of Financial Position and Unaudited Consolidated Statement of Cash Flows are analysed as follows:

 

 

 30 June 2018

 

31 Dec 2017

 

€000

 

€000

Cash at bank

35,543

 

40,815

Cash in transit

19,069

 

16,667

Cash and cash equivalents (excluding bank overdrafts)

54,612

 

57,482

 

Cash and cash equivalents include the following for the purposes of the statement of cash flows:

 

 

30 June 2018

 

 31 Dec 2017

 

30 June 2017

 

€000

 

€000

 

€000

Cash and cash equivalents

54,612

 

57,482

 

36,640

Bank overdrafts (note 13)

(3,599)

 

-

 

-

 

51,013

 

57,482

 

36,640

 

13. Borrowings

 

 30 June 2018

 

31 Dec 2017

Current

€000

 

€000

Bank overdrafts

3,599

 

-

Amounts owed to credit institutions

4,414

 

3,820

Finance leases

505

 

725

 

8,518

 

4,545

Non-current

 

 

 

Amounts owed to credit institutions

52,743

 

60,615

Finance leases

2,428

 

2,517

 

55,171

 

63,132

Total borrowings

63,689

 

67,677

 

Following the adoption of IFRS 9 as of 01 January 2018, the Group recognised a gain of €0.9m in opening reserves at that date arising from the refinancing of a borrowing performed during 2015. See note 2 for details.

 

 

Notes to the unaudited consolidated financial information

 

14. Trade and other payables

 

 30 June 2018

 

31 Dec 2017

Current

€000

 

€000

Trade payables and accruals

194,819

 

164,820

Other creditors

2,989

 

3,121

Deferred income

631

 

824

Value added tax payable

3,667

 

2,637

Other taxation and social security

2,537

 

3,140

Amounts due to related parties

512

 

359

 

205,155

 

174,901

 

 

 

 

Non-current

 

 

 

Deferred income

5,347

 

5,534

 

5,347

 

5,534

 

15. Share capital

 

Ordinary

 

No.

 

Authorised Shares of €0.01 each

 

 

 

At 31 December 2017 and 30 June 2018

1,000,000,000

 

10,000,000

 

 

 

 

Issued Shares of €0.01 each

 

 

 

At 01 January 2018

91,558,158

 

915,581

Allotted

100,000

 

1,000

At 30 June 2018

91,658,158

 

916,581

 

100,000 share options with an exercise price of €1.67 were exercised during the period. Share premium of €166,000 was recorded on the issue of these shares.

 

 

 

Notes to the unaudited consolidated financial information

 

16. Post period end events

 

The Group announced on 02 August 2018, that it had entered into contracts which, upon completion, would result in it holding a 50.01% stake in Welcome Break.   Welcome Break is a leading UK Motorway Service Area operator with a portfolio of 24 MSAs, two TRSAs and 29 hotels across 35 locations in the United Kingdom. This transaction is expected to complete in early Q4 2018.

 

In August 2018, the acquisition of seven sites in Columbia, South Carolina was completed which involved a leasehold arrangement with Getty Realty.

 

The Group has also agreed to lease a network of 43 petrol filling station sites located in Florida from Cross America Partners LP ("CAP"). These sites began trading in September 2018.

 

The Directors have proposed an interim dividend of 0.63 cent per ordinary share, €0.6m in total. This will be paid on 19 October 2018 to shareholders on the register on 28 September 2018.
 

Glossary of financial terms

The key non-IFRS financial terms used by the Group in this interim report are as follows:

 

Measure

 

Description

Constant currency

 

Constant currency measures eliminate the effects of exchange rate fluctuations that occur when calculating financial performance numbers. 

 

EBITDA and adjusted EBITDA

 

EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment charges. Adjusted EBITDA refers to EBITDA adjusted for share based payments and non-recurring items.

 

The adjusted EBITDA calculation can be found on page 15.

 

Adjusted PBT

Adjusted PBT is defined as profit before tax adjusted for share based payments and non-recurring items.

 

Adjusted PBT is calculated as follows:

 

6 months to June 2018

 

6 months to June 2017

 

€000

 

€000

Profit before tax

9,130

 

8,913

Share based payments

349

 

757

Non-recurring charges

571

 

398

Adjusted PBT

10,050

 

10,068

 

Adjusted EPS

 

Adjusted EPS is defined as profit after tax adjusted for share based payments and non-recurring items divided by the weighted average number of ordinary shares in issues.

 

Adjusted EPS is calculated as follows:

 

6 months to June 2018

 

6 months to June 2017

 

€000

 

€000

Profit after tax

7,745

 

7,569

Share based payments

349

 

757

Non-recurring charges

571

 

398

Adjusted PBT

8,665

 

8,724

 

 

 

 

Number of shares (note 4)

91,607

 

80,647

Adjusted EPS

9.46c

 

10.82c

 

Like for like

 

Like for like statistics measure the performance of stores that were open at 01 January 2017 and excluding any stores that were closed or divested since that date.

 

Net debt position

 

Net debt position comprises current and non-current borrowings and cash and cash equivalents.

 

 


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