Half Yearly Report

Applegreen plc

Financial results for the six months ended 30 June, 2015

Dublin, London, 14 September 2015: Applegreen plc ('Applegreen' or 'the Group'), a major petrol forecourt retailer in the Republic of Ireland with a significant and growing presence in the United Kingdom announces its half year results for the six months ended 30 June 2015.

Financial highlights:

· Strong operating performance with adjusted EBITDA up 42% to €10.7m

· 35% increase in gross profit on H1 2014 (30% in constant currency)

· Group revenue up 16% to €517m

· Net cash position at 30 June 2015 of €11.6m

Operational highlights:

· Successful IPO in June raising (€65.2m) net of expenses in primary capital

· Positive impact from new store openings in 2014, driving sales and profit growth in H1 2015

· Grew estate from 152 sites as at 31 December 2014 to 175 as at 30 June 2015

· Increased food outlets by 18 and launched two new food offers - Chopstix and Greggs

Key figures:

Commenting on the results, Bob Etchingham, CEO said: "We are very pleased to announce our first interim results as a public company. The Group has delivered a strong performance in the first half of 2015 reflecting the positive contribution from site openings in the latter part of 2014 and the increased contribution from food driven by our upgrade programme. Growth was evenly spread across both the Republic of Ireland and the UK, with the latter's contribution also benefitting from the strength of sterling against the euro during this period.

"We continued to expand our business in the six months adding two service area sites and three petrol filling stations in the Republic of Ireland, as well as expanding our network of dealer sites by 11. In the UK our site numbers increased by five 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 18 across the estate.

"Trading since the end of June has been positive and while we expect the rate of growth in H2 to be lower than H1, we are on track to deliver results in line with market expectations."

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. 2,600 people, and operates 175 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.

In the year to 31 December 2014, the Group had revenue of €937.3 million and Adjusted EBITDA of €22.8 million.

Conference call details - analysts and institutional investors

Applegreen Plc will host a conference call for analysts and institutional investors today, 14 September, 2015 at 09.00 GMT. Presentation will be available on www.applegreenstores.com. Dial in details are as follows:

Ireland Telephone Number: +353(0)1 2476528

UK Telephone Number: +44(0)20 3427 1906

Passcode: 9340399

For further enquiries, please contact:

Applegreen H1 2015 Performance Overview

The first half of 2015 saw strong growth over 2014 driven by the strong contribution from new sites across the Group's portfolio and the continued development of our food offerings. The Group also benefited from the positive currency impact of a stronger Sterling:Euro exchange rate.

Our upgrade and rebranding activity, together with an improving economic backdrop, saw like for like shop and food sales grow by 9%, with like for like gross profit up by 13%.

There was considerable volatility in oil price during the period but overall the impact on the business was not significant.

Republic of Ireland

In the six months to 30 June 2015, revenue in the Republic of Ireland increased by 12% and gross profit increased by 25%. Like for like store and food sales increased by 5% and like for like gross profit increased by 7%. Fuel gross profit increased by 15% with a like for like margin decrease of 3% due to euro fuel price volatility.

During the period, we expanded our estate with 16 new outlets.

Five new company owned sites were added during the period, two service areas and three petrol filling stations. The new service areas, which are the Group's larger sites, included the Group's first site in Galway and a new site in Mayo. The three new petrol filling stations opened during the period are located in the east of the country and further strengthen our network in the region.

The Group also added 11 dealer sites during the period bringing our total portfolio of dealers to 19 by the end of June. The dealer business is focused on providing fuel to independent operators. In these sites the canopy and pumps on the forecourt are branded Applegreen while the non-fuel revenue remains under the control of the operator of the site.

During the period five sites were re-branded and upgraded incorporating a new food offer.

United Kingdom

Revenue increased by 21% during H1 2015 while gross profit increased from €9.6m in H1 2014 to €15.6m in H1 2015. Like for like stores and food sales increased by 5% (constant currency) while like for like store and food margin increased by 16% (constant currency). Fuel gross margin increased by 37% (constant currency) and like for like figures recorded growth of 14% (constant currency) reflecting an improved 2015 compared to the same period last year.

The key development for this region during the period 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. Four other petrol filling station sites were added in the UK of which two were in the London area.

Five sites were rebranded in the UK during the period with the upgrade incorporating one or more branded food offers.

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 €5.3m on the same period in 2014, however this includes the share based payment charge of €2.2m. It also reflects a significant increase in site development costs as we continue to progress future opportunities for the business.

Outlook

Since 30 June we have continued to develop our estate. In Ireland seven new sites were added including two new service areas in North Dublin and Kerry. In the UK a further two sites have been added. Overall trading has been in line with expectations.

Applegreen PLC Unaudited Condensed

Consolidated Interim Financial Statements

For the six months ended 30 June 2015

UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT

PERIOD ENDED 30 JUNE 2015

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

Non-GAAP measure: Reconciliation of profit before income tax to earnings before interest, tax, depreciation and amortisation (EBITDA), net foreign exchange gains, share based payments and other non-recurring charges (Adjusted EBITDA)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PERIOD ENDED 30 JUNE 2015

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2015

UNAUDITED CONDENSED Consolidated statement of changes in equity

AS AT 30 JUNE 2015

UNAUDITED CONDENSED Consolidated statement of cash flows

PERIOD ENDED 30 JUNE 2015

Notes to the unaudited condensed consolidated interim financial statements

1. General information and basis of preparation

Applegreen PLC ('the Company') is a company incorporated in the Republic of Ireland. The unaudited condensed consolidated interim financial statements of the Company for the 6 months ended 30 June 2015 (the 'Interim Financial Statements') include the Company and its subsidiaries (together referred to as the 'Group'). The Interim Financial Statements were authorised for issue by the directors on 14 September 2015.

The Interim Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2014.

These Interim 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 Interim Financial Statements.

The preparation of the Interim 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 Interim 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 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.

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 Interim Financial Statements do not constitute statutory financial statements. The statutory financial statements (of Petrogas Global Limited) for the year ended 31 December 2014, 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 income tax expense comprises both current and deferred tax. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the Statement of Financial Position date in the countries where the company and its subsidiaries operate and generate income. The calculation of the group's total tax charge necessarily involves a degree of estimation and judgement in respect of certain items, where the tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority. The final resolution of some of these items may give rise to material Income Statement and/or cash flow variances.

2. Significant accounting policies

The accounting policies applied in these financial statements are consistent with those applied in the consolidated financial statements as at and for the year ended 31 December 2014, and are described in those financial statements on pages 17 to 28, except for the impact of the standards described below.

The following new and amended standards and interpretations are effective for the Group for the first time for the financial year beginning 1 January 2015. None of these had a material impact on the Group:

· Annual Improvements to IFRSs 2011-2013 Cycle

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 US. 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 US.

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 US - Involves the sale of fuel and store within the United States of America

Food revenues are generally higher in the second half of the year due to the increased volumes on the motorways during the summer months. Generally this means that operating profits are higher in the second half of the year.

The CODM monitors the operating results 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. 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.

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):

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

6. Finance costs/(income)

7. Intangible Assets

8. Property, plant and equipment

Assets under construction as at 30 June 2015 includes the following significant projects; three motorway services area in Northern Ireland (€6.6m), two service stations in the Republic of Ireland (€6.8m) and one service station in the UK (€1.3m). The remaining amounts relate to several other developments in all three regions.

9. Inventories

The cost of inventories recognised as an expense and included in 'cost of sales' amounted to €454m (June 2014: €398m).

10. Trade and other receivables

Trade and other receivables are non interest bearing and are generally on 30 day credit terms. The fair values of current trade and other receivables is equivalent to their carrying value.

11. Cash and cash equivalents

Cash and cash equivalents are included in the Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows at fair value and, 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 entered into new banking arrangements with its senior lenders, Allied Irish Bank Plc and Ulster Bank Ireland. These new agreements extend the maturity of the group's debt and make additional facilities available to the group. 

13. Trade and other payables

13. Trade and other payables (continued)

14. Provisions

Provisions comprise 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.

15. Share capital

6 months to June 15

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.

· 348 redeemable 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: 

15. Share capital (continued)

· 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 €65.9m was recorded on these shares after deduction of directly attributable issue costs of €4.8m.

· 450,000 share options with an exercise price of €1.00 were exercised. Share premium of €0.4m was recorded on these shares.

 16. Related Party Transactions

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation.

Other than the transactions with Mountpark Developments Limited, included in Note 15, there have been no related party transactions in the half year ended 30 June 2015 that materially affected the financial position or the performance of the Company during that period. There were no material changes in the nature of related party transactions described in the 31 December 2014 audited Financial Statements.

17. Post period end events

Since the period end, the group has opened 6 new sites in Ireland.