Final Results

Applegreen plc

Preliminary Statement of Results for the year ended 31 December 2015

Dublin, London, 14 March 2016: Applegreen plc ('Applegreen' or 'the Group'), a major petrol forecourt retailer in the Republic of Ireland with a growing presence in the United Kingdom announces preliminary results for the year ended 31 December 2015.

Financial highlights:

· Strong operating performance with adjusted EBITDA up 26% to €28.9m

· 30% increase in gross profit on FY 2014 to €125.9m (27% in constant currency)

· Like for like growth in store and food gross profit of 8.9% (6.8% in constant currency)

· Revenue up 15% to €1,081m

· Net debt position at 31 December 2015 of €4.7m

Operational highlights:

· Grew estate to 200 sites as at 31 December 2015 (2014: 152)

· Continued investment in the development of the network with net capex of €58.8m in 2015

· Positive impact from new store openings and rebrands in driving sales and profit growth in FY 2015

· Increased food outlets by 29 and launched two new food offers - Chopstix and Greggs

· Successful IPO in June raising €66.3m in primary capital (net of expenses)

Key figures:

Commenting on the results, Bob Etchingham, CEO of Applegreen said: "In reporting our first full year results as a public company we are very pleased to announce a strong performance in 2015 with growth in both profitability and turnover delivered across each of the Republic of Ireland and the UK. This performance was driven by new site openings in both the latter part of 2014 and early 2015 as well as the increased contribution from food driven by our upgrade and rebranding programme.

We continued to expand our business in the year adding five Service Area sites and seven petrol filling stations in the Republic of Ireland, as well as expanding our network of dealer sites by 25. In the UK our site numbers increased by eight including the first Motorway Service Area in Northern Ireland. We also launched two new food offers- Chopstix and Greggs - and increased the number of our food outlets by 29 across the estate.

We have had a positive start to 2016, adding four Service Area sites and seven petrol filling stations to the estate and we continue to see good opportunities for green field and bolt-on expansion. Consumer sentiment is strong in both our key markets, particularly the Republic of Ireland, and we are confident that our distinctive retail offering in the forecourt sector will continue to deliver growth through 2016."

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 small presence in the US. The business employs c. 2,900 people, and operates 200 forecourt sites across the UK, Ireland and the US.

Applegreen is the number one Motorway Service Area operator in the Republic of Ireland where it has a motor fuel market share of c.12%. The Group operates a distinctive retail led business model focused on offering "low fuel prices always" to drive footfall to its sites and aims to provide a premium food and hot beverage offering in all its sites.

Applegreen has a number of strategic partnerships with international brands including Burger King, Subway, Costa Coffee, Greggs, Lavazza and Chopstix. The business also has its own food offer through the aCafe 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 investors today, 14 March, 2016 at 09.00 GMT. Presentation will be available at www.applegreenstores.com. Participants should dial in five minutes prior to start time using confirmation code. Dial in details and confirmation code are:

Confirmation code: 7487645

Participants in Ireland: +353(0)12465602

Participants in United Kingdom: +44(0)2034271915

Applegreen FY 2015 Performance Overview and Outlook

We delivered strong growth in 2015 over 2014 driven by the contribution from new sites across the Group's portfolio and the continued development of our food offerings.

Our upgrade and rebranding activity, together with an improving economic backdrop, saw like for like2 shop and food sales grow by 6.9% (4.5% growth in constant currency3), with related like for like gross profit up by 8.9% (6.8% growth in constant currency).

There was considerable volatility in the oil price during the year with increases in H1 followed by decreases in H2 but, overall, the impact on the business was not significant.

During the period we expanded our portfolio with 48 new sites, including 37 in the ROI, eight in the UK and three in the US. 23 of these were company owned sites, including six Service Areas and 17 petrol filling stations and 25 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 also continued our rebranding and upgrade programme with 27 sites completed in 2015, with one or more new food outlets added at each site. We also expanded our range of food outlets by 29 including launching two new food offers - Chopstix and Greggs. This added to our existing portfolio of own brands and international brands including Subway, Costa Coffee, Burger King and Lavazza.

Republic of Ireland

In the twelve months to 31 December 2015, revenue in the Republic of Ireland increased by 12.6% and gross profit increased by 23.0%. Like for like store and food sales increased by 4.9% and like for like gross profit increased by 6.5%. Fuel gross profit increased by 19.3% with a like for like margin decrease of 0.6% due to fuel price volatility and a strong comparable performance in the prior year.

During the year, we expanded our estate with 37 new sites.

Twelve new company owned units were added during the year, five Service Areas and seven petrol filling stations. The new Service Areas, which are the Group's larger sites, included two sites in the west of Ireland, one in Dublin, one in Kerry as well as a newly built Motorway Service Area in Kilkenny on the M9. The seven new petrol filling stations that opened during the year comprise three located in the east of the country and four in the west of Ireland, further strengthening our network coverage.

The Group also added 25 dealer sites during the year bringing our total portfolio of dealers to 33 by the end of December.

Ten sites were re-branded / upgraded incorporating a new food offer in 2015.

United Kingdom

Revenue increased by 18.1% during 2015 while gross profit increased to €34.7m in 2015 from €23.0m in 2014. Like for like stores and food sales increased by 3.1% (constant currency) while like for like store and food gross profit increased by 8.5% (constant currency). Fuel gross margin increased by 23.7% (constant currency) and like for like figures recorded growth of 4.9% (constant currency) reflecting an improved 2015 compared to the same period last year.

The key development for this region during the year was the opening of the first Motorway Service Area (MSA) in Northern Ireland just north of Belfast. The reaction from customers has been very positive and it has enjoyed strong sales volumes since the launch. Seven other petrol filling station sites were added in the UK of which two were in the London area.

Eight sites were rebranded / upgraded in the UK during the year with the upgrade incorporating one or more branded food offers.

U.S., Dealer and Fuel Card

By the end of 2015 we were trading from five sites in Long Island having added three during the year. A further site was acquired in January 2016 and three of the forecourts were rebranded as Applegreen in 2015. Trading has been satisfactory and we continue to evaluate growth opportunities in that region.

As referenced earlier our Dealer network grew considerably to 33 sites by 31 December 2015 and now accounts for 9% of our ROI fuel volume making a positive contribution to earnings.

Our fuel card business also grew strongly during the period and with 4% of our Irish fuel volume has a modest but growing earnings profile.

Costs

The rate of increase in selling and distribution costs was slightly ahead of the growth in number of sites, reflecting the increase in number of larger scale sites added. Administrative expenses show an increase of €8.1m on 2014, however this includes an increase in the share based payment charge of €2.4m. The year on year growth was mainly in the first half of the year reflecting the impact of the investment in our support functions in the second half of 2014.

Outlook

We continue to develop our estate in 2016. In the Republic of Ireland four new sites have been added year to date, including a new Service Area in Meath. We have also upgraded one of our existing sites to a Service Area. In the UK a further five sites have been added. In Northern Ireland we have opened the second Motorway Service Area as well as a smaller Service Area in Ballymena while we have added three new petrol filling stations in England. We have expanded our UK development team and have a number of UK Service Areas in the pipeline. Our programme of upgrades and rebranding is ongoing.

We continue to see good opportunities for expansion in our two main markets, both greenfield and bolt-on. Consumer sentiment is strong, particularly in Ireland, and we have had a positive and encouraging start to 2016.  

CONSOLIDATED INCOME STATEMENT

YEAR ENDED 31 DECEMBER 2015

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

STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

Consolidated statement of changes in equity

AS AT 31 DECEMBER 2015

Consolidated statement of cash flows

YEAR ENDED 31 DECEMBER 2015

1. General information and basis of preparation

Applegreen PLC ('the Company') is a company incorporated in the Republic of Ireland. On 27 May 2015 Petrogas Global Limited converted to a public limited company and changed its name to Applegreen PLC. On 19 June 2015, Applegreen PLC successfully completed an initial public offering on the Alternative Investment Market (AIM) of the London Stock Exchange and the Enterprise Securities Market (ESM) of the Irish Stock Exchange. The company is incorporated and tax resident in Ireland. The address of its registered office is Unit 17, Joyce Way, Parkwest Business Park, Dublin 24, Ireland.

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 2014 which is available on the Group's website, applegreenstores.com. The accounting policies and methods of computation and presentation adopted in the preparation of the Group financial information are consistent with those described and applied in the annual report for the year ended 31 December 2014. The Group's accounting policy in respect of its initial public offering in June 2015 is set out in note 15. There are no new IFRSs or interpretations effective from 1 January 2015 which have had a material effect on the financial information included in this report.

The financial information presented in this report does not represent full statutory accounts. The preliminary release was approved by the Board of Directors. The annual report and accounts will be approved by the Board of Directors and reported on by the auditors in due course. Accordingly, the financial information is unaudited. Full statutory accounts for the year ended 31 December 2014 have been filed with the Irish Registrar of Companies. The audit report on those statutory accounts was unqualified.

These Financial Statements are 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 Financial Statements.

The preparation of these Financial Statements 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 these Financial Statements, the critical judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the Consolidated Financial Statements as at and for the year ended 31 December 2014 as set out on pages 17 to 28 in those Financial Statements.

2. 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 and the UK and fuel and other grocery 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 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.

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)

3. Earnings per share

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 year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares which comprise share options issued under the share incentive plan.

4. Expenses

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

* 2015: Non-recurring charges comprise provision in respect of uncertain payroll tax positions with Revenue authorities and a one off payment made by the Group's principal shareholders to employees subsequent to the Group's IPO.

2014: Non-recurring charges comprise provision in respect of uncertain tax positions with Revenue authorities and one off payment made to directors of the company for past service.

5. Finance costs and income

6. Taxation

The total tax expense can be reconciled to accounting profit as follows:

7. Intangible Assets

8. Property, plant and equipment

Assets under construction as at 31 December 2015 includes the following significant projects; three motorway services area in Northern Ireland (€9.2m), three service stations in the Republic of Ireland (€7.3m) and one service station in the Northern Ireland (€0.7m). The remaining amounts relate to several other developments across all three regions.

9. Inventories

The cost of inventories recognised as an expense and included in 'cost of sales' amounted to €941m (31 December 2014: €831m).

10. Trade and other receivables

Trade and other receivables are non interest bearing and are generally on 30 day credit terms. 

11. Cash and cash equivalents

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

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

12. Borrowings

In March 2015, the group refinanced its banking arrangements with its senior lenders, Allied Irish Bank PLC and Ulster Bank Ireland. These new arrangements extend the maturity of the group's debt and make additional facilities available to the group. 

13. Trade and other payables

14. Provisions

At 31 December 2014 provisions comprised the group's best estimate to i) settle the obligation relating to ongoing tax matters with the Revenue authorities and ii) employee and management bonuses. 

Obligations relating to ongoing tax matters with the Revenue authorities were settled in full during 2015. At 31 December 2015 provisions related solely to the groups best estimate of employee and management bonuses for service provided during the preceding year.

15. Share capital

Proceeds from the issue of ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are recorded in retained earnings within equity.

On 8 May 2015 500 redeemable ordinary shares with a nominal value of €0.01 were redeemed by the company from Mountpark Developments Limited, a company related by virtue of common directors, for a cost of €1.874m. The remaining 348 redeemable ordinary shares were converted to ordinary shares.

On 19 June 2015, Applegreen PLC successfully completed an initial public offering on the Alternative Investment Market (AIM) of the London Stock Exchange and the Enterprise Securities Market (ESM) of the Irish Stock Exchange. On that date the company issued 18,421,053 ordinary shares of €0.01 at an issue price of €3.80/£2.77 per share, resulting in gross proceeds of €70.85 million. Share premium of €70.67m was recorded on these shares. Directly attributable issue costs of €4.6m have been deducted from Retained earnings.

Throughout the year a total of 1,200,000 share options were exercised at a price of €1.00 per share. Share premium of €1.2m was recorded on these shares.