Applegreen plc, the roadside convenience retailer with 556 forecourt sites in UK and Ireland, today provides an update in light of the recent developments regarding COVID-19.
Current trading and COVID-19
Applegreen has traded strongly and in line with management expectations for the first 10 weeks of 2020. However, footfall and volumes have been impacted in the last two weeks as governments and customers take increasing measures to contain the spread of the virus.
The firm stated, 'Currently, all of our stores remain open and we are working hard to protect the health and safety of our people as well as provide an essential service in the communities in which we operate.
'We have implemented an extensive range of measures to safeguard our people and communities across our three regions. The Group’s supply chain has remained fully operational and its strong customer service levels have been maintained.
'Given the ongoing uncertainty, we are unable to quantify the impact of COVID-19 on our financial and trading performance at this stage, however we expect a material reduction to profitability for the current financial year.
'The scale is dependent on how the situation develops and over what timeframe, and the impact of further measures taken by the governments in the markets in which we operate.'
Short term actions to conserve cash
In response to this unprecedented and uncertain environment, the group is taking a number of actions to protect profitability and conserve cash:
Deferring development capital expenditure;
Reducing operating cost base;
Tight management of working capital, including stock levels;
Implementation of a recruitment freeze;
Deferring executive director bonuses;
Availing of newly introduced government relief measures; and
Opening negotiations with landlords on rental holidays.
Outlook
Applegreen is fundamentally a resilient business which operates in an industry which provides an essential service to the community. The group has a strong management team in place with an excellent track record of delivery and the capability to respond and adapt quickly to changing market conditions.
Whilst the current crisis presents multiple challenges, the Board remains confident in the strategy over the longer term and believes the group will be well positioned to benefit from the normalisation in trade across the three regions.