Irish company Applegreen has indicated its plants to invest €1 billion over the next five years to expand its business, which currently serves 180 million customers per year.
The €1 billion capital expenditure programme will include a major expansion in Ireland and the US, as well as investments in its Welcome Break business in the UK.
It will also invest in its growing electric vehicle (EV) charging network.
Speaking about the planned expansion, Applegreen co-founder and group chief executive Joe Barrett said, “This is a very significant expansion programme for Applegreen, as we continue to invest to expand our business in Ireland, the United States and the UK.
“Our current operations provide a very strong foundation on which to build the next phase of growth for Applegreen in each of its three markets.”
United States
In the US, Applegreen currently operates more than 100 motorway service areas, and it believes that there is significant scope to expand this part of its overall business, particularly on the East Coast.
Food makes up a significant part of Applegreen’s American business, where it operates restaurant and cafe brands such as Burger King, Shake Shack, Chick-fil-A, Popeyes, Starbucks, Dunkin’, Panera Bread and Panda Express.
Due to this large hospitality reach in the US, as well as its offerings in Ireland and the UK, fuel now accounts for less than 20% of the group’s gross profit.
Barret said that, moving forward in the US, food will be at the heart of Applegreen’s offering, as it aims to provide a ‘one-stop shop’ for road users.
Ireland And UK
Applegreen continues to invest significantly in Irish and UK markets.
As Barrett noted, “In Ireland, we will be continuing the roll-out of our very successful Braeburn coffee offer and our partnership with M&S Food.
“We currently operate M&S at 19 of our locations in Ireland, and we intend to grow that number to over 60 sites.
“We also plan to expand our network of motorway and roadside service areas in Ireland and the UK, and to grow our EV-charging networks in both countries.”
Earlier this year, Applegreen opened a new €10 million service area at Clondrinagh, in Limerick, and upgraded its Midway Service Area in Portlaoise, in a €3 million investment.
Applegreen is also due to open a new motorway service area off the M3 in Dunshaughlin, Co. Meath, next year, as well as growing its Welcome Break business in the UK, which currently operates 58 sites.
The group is currently investing £55 million (€66 million) in a new Welcome Break service station in Rotherham, which will include six food outlets, a WH Smith, and a Waitrose convenience store, as well as fuel, EV charging, and a dedicated HGV driver facility.
Profit
Applegreen’s gross profit increased by €972 million last year, according to newly filed accounts for its parent company, Causeway Consortium Holdings.
Earnings before interest, tax, depreciation and amortisation (EBITDA) – which is a key performance measure for the company – increased by almost 7%, to just under €271 million.
Revenue from Applegreen’s food operations and convenience store business increased by 11% during the year, as total turnover for the group declined by almost 6%, to €3.9 billion, due to a fall in fuel prices.
The Irish business generated sales of almost €1.1 billion last year, while turnover in the UK was just over €2 billion and sales in the US reached €0.8 billion.
Applegreen recorded a loss before tax of just under €83 million last year, which was marginally lower than that of 2022, due to the impact of depreciation and amortisation, financing costs, and €12 million on non-recurring charges related to the opening of new sites and the expansion of the group’s EV business.
Barrett said, “We are currently in growth mode and are investing for the long-term strategic success of the business.
“We have delivered 40 brand-new or refurbished travel plazas over the past two years that represent a step change in the services that we are offering for consumers.
“In every location, after we reopen, we are seeing a significant uplift in trading, compared to the performance prior to investment.”
Read More: Applegreen Ireland Transforms Its Midway Service Area With €3m Upgrade
