About Applegreen

Established in 1992, Applegreen is a major petrol forecourt retailer in the Republic of Ireland with a significant and growing presence in the United Kingdom, and an evolving presence in the USA. As at 31 December 2016, the business employed c. 3,400 people, and operated 243 forecourt sites across the UK, Ireland and the USA. 

Applegreen is the number one Motorway Service Area operator in the Republic of Ireland while occupying a leading position in the Irish petrol forecourt sector. The Group offers a distinctive convenience retail offering in the forecourt space 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 aCafé and Bakewell café brands. 

Applegreen's growth strategy is focused on acquiring and developing new sites in the markets in which it operates and on upgrading and rebranding existing sites.

Conference call details - analysts and institutional investors

Applegreen plc will host a conference call for analysts and institutional investors today, 14 March, 2017 at 08.30 GMT.  Presentation will be available on www.applegreenstores.com.  Dial in details are as follows:

Ireland Telephone Number:                       +353 (0)1 2465621

UK Telephone Number:                               + 44 (0)330 336 9411

Passcode:                                                         9487979

For further enquiries, please contact:

Applegreen

Bob Etchingham, CEO / Paul Lynch CFO                                                 +353 (0) 1 512 4800

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

Applegreen FY 2016 Performance Overview and Outlook

2016 was another successful year of growth for the Group driven by strong like for like growth in food and store and additional contribution from new sites across the Group's portfolio.

Our upgrade and rebranding activity, together with an improving economic backdrop, saw like for like food and store sales grow by 7.1% on a constant currency basis, with related gross profit up by 8.9%.

The increasing proportion of fuel cards of total fuel volume together with increasing oil prices throughout the period had a negative impact on fuel margin in Ireland although the fuel card volume would have been positive for the strong non-fuel sales.

During the period we expanded our portfolio with 43 new sites, including 22 in the ROI, 15 in the UK and six in the USA. 28 of these were company owned sites, including five Service Areas and 23 petrol filling stations and 15 were dealer sites. The dealer business provides fuel to independent operators.  The canopy and pumps on these dealer locations are branded Applegreen while the non-fuel revenue remains under the control of the operator of the site.

We continued our rebranding and upgrade programme with 19 sites completed in 2016, adding one or more new food outlets at each site. We also expanded our range of food outlets by 32 introducing a new food offer - Freshii as well as launching the 7-Eleven franchise in the USA. This added to our existing portfolio of own brands and international brands including Subway, Costa Coffee, Burger King, Lavazza, Chopstix and Greggs.

Republic of Ireland

In the twelve months to 31 December 2016, revenue in the Republic of Ireland increased by 11.4% and gross profit increased by 15.0%. Like for like food and store sales increased year on year by 9.3% and related gross profit grew by 10.2%. Total fuel gross profit increased by 8.0% compared to 2015 but on a like for like basis declined by 4.8%. This reflected the impact of the rising oil price throughout the year as well as the growth of fuel card volume, which has a lower margin than retail fuel. The rise in fuel card volume did help drive the strong non-fuel performance.

During the year, we expanded our Republic of Ireland estate by 22 including 15 dealer sites.

We opened four new TRSAs including the upgrade of an existing PFS in Birr, Co. Offaly. The other TRSAs were in Meath, Louth and Tullamore, Co. Offaly. We added 5 petrol filling stations, two in Dublin with the remainder in the southern half of the country.

The addition of 15 new dealer sites during the period brings our total dealer portfolio to 48 by the end of the year.  The dealer business now accounts for 16% of the total ROI fuel volumes.

During the year, 11 sites were rebranded and upgraded incorporating at least one new food offer in all cases. 70% of the ROI Company owned estate is now branded Applegreen.

Our fuel card volumes more than doubled and now account for 7% of ROI fuel volumes.

At the beginning of 2017, we entered into a conditional agreement to acquire a 50% share in the Joint Fuels Terminal in Dublin port from the Topaz Energy Group for a consideration of €15.7m. The acquisition is subject to the satisfaction of a number of conditions including the approval of the Competition and Consumer Protection Commission and is expected to complete in Q2 2017. This transaction should enhance the competitiveness of our supply and provide further scope for the development of our Irish fuel business.

United Kingdom

Revenue increased by 17.1% and gross profit by 28.8% on a constant currency basis largely due to the continued expansion of the UK estate. Combined food and store sales and gross profit rose year on year on a constant currency basis by 32.9% and 42.1% respectively. On a like for like constant currency basis non-fuel sales were flat while related gross profit grew by 3.9% reflecting strong growth in food and better margins in store.

Like for like (constant currency) fuel gross profit for the year was down 0.6% (-1.1% in H1) reflecting an improving competitive environment in the second half of the year.

There was a strong focus by the Group on expansion within the United Kingdom in 2016 with a total capex spend of €26.0m.

Four new Service Area sites were opened in the UK including a new MSA heading south of Belfast, a new TRSA in Ballymena Northern Ireland and the conversion of two of our existing PFSs to TRSAs. We were very pleased that our Lisburn forecourt, on the M1 South of Belfast, was awarded the prestigious NACS Insight 2016 International Convenience Retailer of the Year Award.

We are building a good pipeline of TRSAs and MSAs in the UK, which are at various stages of planning.  

We have also developed our relationship with Costa Coffee in the UK and opened our first Costa Coffee café as part of a site upgrade to TRSA in December 2016. The second such café opened in February 2017.

13 new PFSs were opened in the UK with a further seven existing stations being rebranded and expanded through the addition of new food offerings. 35% of our UK estate is now branded Applegreen.

USA

During the year the Group added 1 new forecourt in Long Island. We also signed an agreement with CrossAmerica Partners to lease nine sites in the New England area.  Five of these sites were taken over in 2016. This now brings the total number of trading forecourts in the USA to 11. In addition, we signed a franchise agreement with 7-Eleven. Our store in Hempstead, Long Island has been redeveloped in 2016 and is now trading as 7-Eleven.

We have confidence that the USA market represents a viable region for further development noting an ample supply of expansion opportunities and an under developed retail model in some regions.

We are continuing to invest in the USA with a capex spend of €1.0m in 2016 and are strengthening the organisational structure in the USA to ensure ongoing support for further growth and expansion.

Costs

Selling and distribution expenses rose by 20.8% year on year. This is broadly in line with the 43 site additions in the year which resulted in a 21.5% increase in total site numbers.  Administrative expenses, excluding share based payment expense, non-recurring costs and depreciation, grew by 8.7% reflecting an increase in development spend and increased resource in the UK market in particular.

Dividend

The Board has proposed a maiden final dividend, subject to approval at the Company's AGM, of 1.25 cent per share (€1.0m) which will be paid on 29 June 2017 to shareholders on the register on 9 June 2017.

Outlook

We continue to develop our network in 2017 adding 12 sites in the year to date.  In the Republic of Ireland we have opened a new service area in Waterford and added a petrol filling station in Dublin. In the UK we have opened a new MSA in Lisburn heading north to Belfast and have also added three petrol filling stations as well as converting another of our petrol filling stations to a TRSA.  In the US we acquired two further sites as well as adding four new dealer sites.

We have a strong pipeline of further developments of both Service Area sites and petrol filling stations across our markets.

We are confident of making further progress during 2017. Our core Irish market is delivering good growth in non-fuel sales in particular while fuel margin experience has been in line with 2016.  The UK has also begun the year positively and while aware of the uncertainties created by the Brexit process we expect to continue to experience growth across our operations during the year.

UNAUDITED CONSOLIDATED INCOME STATEMENT

YEAR ENDED 31 DECEMBER 2016

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