Half-year Report (Replacement)

The following amendment has been made to the 'Half-year Report' announcement released on 21 September 2018 at 07:00 under RNS No 4780B:

The paragraph headed 'Dividend' should have referenced an interim dividend and not final dividend.

All other details remain unchanged. The full amended text is shown below.

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:

*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 an interim 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

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 2018

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

UNAUDITED Consolidated statement of changes in equity

AS AT 30 JUNE 2018

UNAUDITED Consolidated statement of cash flows

PERIOD ENDED 30 JUNE 2018

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:

(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.

Notes to the unaudited consolidated financial information

3. Segmental analysis (continued)

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 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.

5. Expenses

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

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

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

7. Taxation

Notes to the unaudited consolidated financial information

8. Intangible assets

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

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

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

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:

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

13. Borrowings

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

15. Share capital

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: