Half-year Report

Applegreen plc

Results for the six months ended 30 June 2017

Dublin, London, 12 September 2017: Applegreen plc ('Applegreen' or 'the Group'), a major petrol forecourt retailer with operations in the Republic of Ireland, the United Kingdom and the United States announces its interim results for the six months ended 30 June 2017.

Financial highlights:

· Adjusted EBITDA increased by 28% to €16.6m in H1 2017 from €13.0m in H1 2016 (31% on a constant currency basis)

· 20% increase in gross profit on H1 2016 (24% at constant currency)

· Like for like growth of 10% in non-fuel gross profit (food and store) at constant currency

· Revenue up 21% to €672.5m

· Continued investment in the development of the network with capex for the period of €29.8m

· Net debt position at 30 June 2017 of €33.2m (31 December 2016: €19.4m)

· Maiden interim dividend of 0.60 cent per share (€0.5m)

Operational highlights:

· Grew estate by 32 sites to 275 sites as at 30 June 2017 (31 December 2016: 243)

· Opened 17 new food outlets in the period

· Site expansion with Cross America underpinning USA development

· In July 2017 we completed the acquisition of 50% of the Joint Fuels Terminal in Dublin port

· Subsequent to the period end, we announced the proposed acquisition of the Brandi Group, a 42 site retail operation based in Columbia, South Carolina and the Carsley Group, a seven site forecourt retail operation based in the UK, both of which are expected to complete in Q4 2017

Key figures:

*Adjusted for share based payments and non-recurring charges

Commenting on the results, Bob Etchingham, CEO said: "We are very pleased to report another strong set of results for the first half of the financial year. This performance was underpinned by favourable fuel margins, very strong like for like growth in non-fuel revenues and margins together with continued investment in the expansion of the estate."

"A further 32 sites were added to the estate in H1 2017 and this investment activity has continued since the period end as we identify opportunities for growth across our three markets. We recently acquired a 50% interest in the Joint Fuel Terminal in Dublin Port and announced the acquisitions of the Brandi Group in the US and the Carsley Group in the UK."

"We now have a good platform for growth in each of our three markets and are well positioned for the seasonally important second half of the year. Overall, we remain confident in the prospects for the business in 2017."

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 sites in each of the three markets in which it operates. As at 30 June 2017, the business operated 275 forecourt sites and employed c 4,000 people.

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 Bakewell café brand.

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

Conference call details - analysts and institutional investors

Applegreen plc will host a conference call for analysts and institutional investors today, 12 September, 2017 at 08.30 BST. 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: 5775572

For further enquiries, please contact:

Applegreen

Bob Etchingham, CEO / Niall Dolan 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 H1 2017 Performance Overview and Outlook

The performance for the first half of 2017 was driven by strong fuel margin in both the Republic of Ireland and the UK, positive like for like growth in food and store and additional contribution from new sites across the Group's portfolio.

A strong economic backdrop, together with our upgrade and rebranding activity, saw like for like food and store sales grow by 5.4% on a constant currency basis, with related gross profit up by 9.5% (constant currency).

During the period we expanded our portfolio with 32 new sites, including 11 in the ROI, eight in the UK and 13 in the USA. Five of these were dealer sites and 27 were company owned sites, which comprised of four Service Areas and 23 Petrol Filling Stations.

In addition, nine sites were rebranded or upgraded in H1 2017, which involved adding one or more new food outlets at each site. This included two sites in the UK, which were upgraded from Petrol Filling Stations to Service Areas.

This development activity has resulted in 17 additional branded food offers being added to our estate in the period.

The UK's decision to exit the EU has resulted in a weaker sterling, which has impacted on the consolidated euro results for the Group when compared to the same period last year.

Republic of Ireland

In the six months to 30 June 2017, revenue in the Republic of Ireland increased by 15.4% and gross profit increased by 16.4%. Like for like food and store sales increased year on year by 6.4% and related gross profit grew by 10.6%. Total fuel gross profit increased by 19.0% compared to H1 2016 and increased by 9.6% on a like for like basis. This reflected the impact of a strong fuel margin environment.

During the period, we expanded our Republic of Ireland estate by 11 sites including five dealer sites.

We opened one new Service Area in Tramore, Co. Waterford and added five new Petrol Filling Station sites.

During the period, six sites were rebranded or upgraded incorporating at least one new food offer in all cases. 74% of the ROI Company owned Petrol Filling Station estate is now branded Applegreen.

Our dealer and fuel card volumes have shown significant growth and now account for 28% 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 was completed in July 2017. This transaction will provide both security and enhanced competitiveness of supply while providing further scope for the development of our Irish fuel business.

United Kingdom

In the six months to 30 June 2017, revenue in the UK increased by 23.6% and gross profit by 22.7% largely due to the continued expansion of the estate (35.6% and 36.6%, respectively, on a constant currency basis).

Combined food and store sales and gross profit rose year on year by 11.8% and 16.5% respectively. On a like for like constant currency basis, non-fuel sales were 0.8% ahead of the same period last year while related gross profit grew by 4.0% reflecting good growth in food.

Total fuel gross profit in the UK increased by 29.8% compared to 2016 and increased by 18.6% on a like for like constant currency basis driven, primarily, by a stronger fuel margin environment.

Three new Service Areas were opened in the UK including one new Motorway Service Area in Lisburn, Northern Ireland.

Five new Petrol Filling Stations were added in the UK in the period and two existing stations were rebranded and expanded through the addition of new food offerings. 32% of our UK Petrol Filling Station estate is now branded Applegreen.

We are building a good pipeline of Service Area opportunities in the UK, which are at various stages of the planning process.

We have continued to develop our relationship with Costa Coffee in the UK and opened three additional Costa Coffee cafés as part of site upgrade and rebranding activities during H1 2017.

In August 2017, we announced the planned acquisition of a network of seven sites from the Carsley Group, consisting of six Service Areas and one Petrol Filling Station. The Service Area sites are predominantly located on the major arterial route of the A1. The transaction significantly increases our presence in the UK Service Area market and is expected to close in Q4 2017.

USA

During the period, the Group added 13 new forecourts in New England. 12 of these sites were acquired under our master agreements with CrossAmerica Partners. This now brings the total number of trading forecourts in the USA to 24 at 30 June 2017.

In July 2017, we announced the planned acquisition of the Brandi Group sites which is being completed alongside a leasehold arrangement with Getty Realty. The Group has 42 sites located in Columbia, South Carolina, comprised of 34 Petrol Filling Station sites and eight stand-alone Burger King restaurants. There are a further 11 Burger King restaurants in the Petrol Filling Station estate, which also incorporates other food-to-go offers such as Subway and Blimpie. The transaction is expected to close in Q4 2017.

Existing management resources will remain in place and additional resources have been identified to ensure a successful integration into the Applegreen network.

Costs

Selling and distribution expenses rose by 19.0% year on year. This is relatively consistent with estate expansion which resulted in a 25.0% increase in total site numbers at June 2017 compared to June 2016. Administrative expenses, excluding share based payment expense, non-recurring costs and depreciation grew by 10.5% reflecting an increase in personnel and development costs to support the expansion of the Group.

Dividend

The Board has proposed an interim dividend of 0.60 cent per share (€0.5m) which will be paid on 20 October 2017 to shareholders on the register on 22 September 2017.

Outlook

We continue to develop our network in H2 2017 adding eight sites in the period to date. In the Republic of Ireland, we have opened a new Service Area in Wexford and added one Petrol Filling Station and one dealer site to our network. We opened our first new greenfield Service Area in Great Britain and have also added two Petrol Filling Stations as well as converting another Petrol Filling Station to a Service Area. In the US we acquired two Petrol Filling Station sites.

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

We have a strong platform for growth in each of our markets and are well positioned for the seasonally important second half of the year. Overall, we remain confident in the prospects for the business in 2017.

UNAUDITED CONSOLIDATED INCOME STATEMENT

PERIOD ENDED 30 JUNE 2017

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

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD ENDED 30 JUNE 2017

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2017

UNAUDITED Consolidated statement of changes in equity

AS AT 30 JUNE 2017

UNAUDITED Consolidated statement of cash flows

PERIOD ENDED 30 JUNE 2017

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 2017 (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 2016 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 year ended 31 December 2016. There are no new IFRSs or interpretations effective from 01 January 2017 which have had a material effect on the 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 2016, 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 2016 as set out on pages 73 to 74 in those financial statements.

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 2016, and are described in those financial statements on pages 65 to 73. 

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.

Notes to the unaudited consolidated financial information

3. Segmental analysis (continued)

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 to the unaudited consolidated financial information

4. 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 period.

Notes to the unaudited consolidated financial information

5. Expenses

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

(1) Non recurring charges relates to acquisition costs incurred in the first six months of the year.

6. Finance costs and income

* The foreign exchange gains of €0.3m (2016: €1.4m) arises in respect of non-Euro denominated debt.

Notes to the unaudited consolidated financial information

7. Taxation

8. Intangible assets

Notes to the unaudited consolidated financial information

9. Property, plant and equipment

Assets under construction as at 30 June 2017 includes the following significant projects; six service stations in the Republic of Ireland (€12.5m), one motorway services area in Northern Ireland (€0.7m) and two service stations in the UK (€0.8m). The remaining amounts relate to several other developments across all regions.

Notes to the unaudited consolidated financial information

10. Inventories

The cost of inventories recognised as an expense and included in 'cost of sales' amounted to €578m (June 2016: €478m).

11. Trade and other receivables

Current trade and other receivables are non-interest bearing and are generally less than 30 day credit terms. Non-current debtors relates to loans advanced to our dealer network. The fair values 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.

Notes to the unaudited consolidated financial information

12. 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:

13. Borrowings

Notes to the unaudited consolidated financial information

14. Trade and other payables

Non-current

15. Share capital

350,000 share options with an exercise price of €1.00 were exercised during the period. Share premium of €346,500 was recorded on the issue of these shares.

Notes to the unaudited consolidated financial information

16. Post period end events

Since the period end, the Group has added one new service area, one petrol filling station and one new dealer sites in the Republic of Ireland, one service area and two petrol filling stations in the UK and two in the USA. The Group will continue to pursue new developments to enhance shareholder value, through a combination of organic growth, acquisitions and development opportunities.

The Group also completed the acquisition of a 50% share in the Joint Fuels Terminal in Dublin port from the Topaz Energy Group for a consideration of approximately €15.7m. The transaction was completed in July 2017.

The Group also announced the proposed acquisition of two retail operations; one in the US and one in the UK.

In the US, the Group will take over 42 sites located in or close to the city of Columbia, the state capital of South Carolina. 34 of these sites are petrol filling stations which incorporate 11 Burger King restaurants and a number of other food offers including Subway and Blimpie. In addition, the Business operates eight stand-alone Burger King sites. Under the terms of the transaction, the Group will acquire the trade and certain assets of the Brandi Group for a consideration of US$5.4m.

In the UK, Applegreen has reached an agreement to acquire a network of seven sites from the Carsley Group, consisting of six service areas and one petrol filling station. The service area sites are predominantly located on the major arterial route of the A1 motorway. Under the terms of the acquisition, Applegreen will acquire the Business for a consideration of £21m.

Both transactions are expected to complete in early Q4 2017.

The Directors have proposed an interim dividend of 0.60 cent per ordinary share, €0.5m in total. This will be paid on 20 October 2017 to shareholders on the register on 22 September 2017.

Glossary of financial terms

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