Applegreen plc Preliminary Statement of Results for the year ended 31 December 2017

Transcription

1 Preliminary Statement of Results for the year ended 31 December 2017 Dublin, London, 13 March 2018: ( 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 preliminary results for the year ended 31 December Financial highlights: Adjusted EBITDA increased by 24% to 39.8m in FY 2017 from 32.0m in FY 2016 (26% on a constant currency basis) 25% increase in gross profit on FY 2016 (27% at constant currency) Like for like growth of 7.4% in non-fuel gross profit (food and store) at constant currency Revenue up 21% to 1,428.1m. Continued investment in the development of the network with capex for the year of 113.0m Net debt position at 31 December 2017 of 10.2m (31 December 2016: 19.4m) Final dividend of 0.80 cent per share ( 0.7m) giving a total dividend for the year of 1.40c ( 1.2m) Operational highlights: Grew estate by 99 sites to 342 sites as at 31 December 2017 (31 December 2016: 243) Opened 77 new food outlets in the year Brandi and Carsley site acquisitions contributing significantly to estate growth with 42 sites and 7 sites added, respectively. Both acquisitions completed in October 2017 In July 2017, we completed the acquisition of 50% of the Joint Fuels Terminal ( JFT ) in Dublin port Key figures: 31-Dec Dec-16 Change Gross Profit ( m) % Adjusted EBITDA* ( m) % Adjusted Profit before Tax* ( m) % Adjusted EPS % *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 business as we continue to deliver on our growth strategy. This performance was underpinned by positive like for like growth, particularly in the Republic of Ireland, ongoing expansion of our estate and an enhanced fuel margin resulting from our acquisition of a 50% stake in the Joint Fuels Terminal in Dublin Port. The business saw significant expansion during the year as we increased our estate by 99 sites to a total of 342 locations. We opened 22 new sites in the Republic of Ireland, 20 in the UK and 57 in the US in We are confident in the prospects for the company in 2018 as our underlying business continues to perform well and we further evolve our growth strategy. The significant acquisitions completed in 2017 are performing as expected and we are well placed to progress both our organic and acquisition led development plans in the coming year. 1

2 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 31 December 2017, the business operated 342 forecourt sites and employed c 4,900 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. 2

3 Conference call details analysts and institutional investors will host a conference call for analysts and institutional investors today, 13 March, 2018 at BST. Presentation will be available on Dial in details are as follows: Ireland Telephone Number: +353 (0) UK Telephone Number: +44 (0) Passcode: For further enquiries, please contact: Applegreen Bob Etchingham (CEO) +353 (0) Niall Dolan (CFO) Drury Porter Novelli: Paddy Hughes +353 (0) Shore Capital Stephane Auton +44 (0) Patrick Castle Goodbody Joe Gill +353 (0) Siobhan Wall 3

4 Applegreen FY 2017 Performance Overview and Outlook The performance for 2017 was driven by strong fuel margin in both the Republic of Ireland and the UK in the early part of the year, positive performance of recent acquisitions and good like for like growth in food and store. A strong economic backdrop, together with our upgrade and rebranding activity, saw like for like food and store sales grow by 3.9% on a constant currency basis, with related gross profit up by 7.4% (constant currency). During the period, we expanded our portfolio with 99 new sites, including 22 in the ROI, 20 in the UK and 57 in the USA. Of the total, 12 of these were dealer sites and 87 were company owned sites. There were two significant group acquisitions in 2017, Brandi and Carsley, both of which completed in October The Brandi acquisition involved the takeover of a forecourt retail operation based in Columbia, South Carolina with 34 Petrol Filling Station sites and eight standalone Burger King restaurants. The Carsley acquisition involved the takeover of seven Petrol Filling Station sites in the UK, a number of which offer potential to develop into larger Service Area facilities. In addition, 18 sites were rebranded or upgraded in 2017, which involved adding one or more new food outlets at each site. This included four sites which were upgraded from Petrol Filling Stations to Service Areas. This development activity has resulted in 77 additional branded food offers being added to our estate in the period, 35 of which were added as part of the Brandi acquisition. Republic of Ireland In the year ended 31 December 2017, revenue in the Republic of Ireland increased by 12.3% and gross profit increased by 16.5%. Total fuel gross profit increased by 21.1% compared to 2016 and increased by 13.5% on a like for like basis. This reflected the impact of a strong fuel margin environment in the first part of the year as well as the impact of the JFT acquisition in the latter part of the year. We completed the acquisition of 50% interest in the JFT in July 2017 for a purchase price of 15.7m. The terminal comprises a 20 acre site with storage capacity of 60,000 tonnes and is operated under a joint agreement with Valero. Like for like food and store sales increased year on year by 4.6% and related gross profit grew by 7.8%. During the period, we expanded our Republic of Ireland estate by 22 sites which included three Service Area sites, seven Petrol Filling Station sites and 12 dealer sites. During the period, eight sites were rebranded or upgraded incorporating at least one new food offer in all cases. 88% of the ROI estate is now branded Applegreen (2016: 85%). Our dealer and fuel card volumes have shown significant growth and now account for 28% of ROI fuel volumes on a combined basis. 4

5 United Kingdom In the year ended 31 December 2017, revenue in the UK increased by 22.4% and gross profit by 19.7% largely due to the continued expansion of the estate (30.9% and 28.0%, respectively, on a constant currency basis). Combined food and store sales and gross profit rose year on year by 15.2% and 20.6% respectively. On a like for like constant currency basis, these sales were 0.3% ahead of the same period last year while related gross profit grew by 4.2% reflecting good growth in food. Total fuel gross profit in the UK increased by 18.6% compared to 2016 and increased by 4.1% on a like for like constant currency basis driven, primarily, by a stronger fuel margin environment in the early part of the year. The Group opened five new Service Areas in the UK including one new Motorway Service Area in Lisburn, Northern Ireland, one new build Trunk Road Service Area in Spalding (A14) and also converted three Petrol Filling Stations sites to Trunk Road Service Areas during the year. 15 new Petrol Filling Stations were added in the UK in the period and seven existing stations were rebranded and expanded through the addition of new food offers. 51% of our UK 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 six additional Costa Coffee cafés during 2017, one in our new site in Spalding and five as part of existing site upgrade and rebranding activities. In October 2017, we completed the acquisition of a network of seven Petrol Filling Station sites from the Carsley Group for a consideration of 23.5m. The sites are well located on very busy roads with a number situated on the A1 which is a major arterial route. The transaction further expands our service area potential in the UK. USA During the period, the Group added 57 new sites in the USA, 42 in South Carolina and 15 in the North East. In October 2017, we completed the acquisition of the Brandi Group sites which involved a leasehold arrangement with Getty Realty. The consideration paid by Applegreen was US$5.7m (excluding inventory acquired) ( 5.0m) with Getty Realty acquiring certain property assets for US$68.3m. As part of the transaction, we acquired 42 sites located in Columbia, South Carolina, comprising 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. In the North East, 12 of the sites were added under our master agreements with CrossAmerica Partners. This now brings the total number of trading forecourts in the North East USA to 26 at 31 December

6 Costs Selling and distribution expenses, excluding rent and depreciation rose by 24.5% year on year which is broadly in line with the increase in gross profit. Rent costs now incorporate lease rental for the South Carolina sites. Administrative expenses, excluding share based payment expense, non-recurring costs and depreciation grew by 24.0% driven by business growth and further investment in management capacity. Dividend The Board has proposed a final dividend of 0.80 cent per share ( 0.7m) which will be paid on 5 July 2018 to shareholders on the register as at 15 June Outlook We continue to develop our network in 2018 adding 11 sites in the year to date. In the Republic of Ireland, we have opened a new Service Area in Meath. We also opened seven Petrol Filling Stations in the UK and three in the US. We have a strong pipeline of further developments of both Service Area sites and Petrol Filling Stations across our markets. 6

7 UNAUDITED CONSOLIDATED INCOME STATEMENT YEAR ENDED 31 DECEMBER 2017 Notes Revenue 1,428,116 1,177,642 Cost of sales 5 (1,246,395) (1,031,865) Gross Profit 181, ,777 Selling and distribution costs 5 (130,301) (103,947) Administrative expenses 5 (30,543) (24,004) Other income 2,164 1,166 Finance costs 6 (1,494) 197 Finance income Profit before income tax 21,967 19,514 Income tax expense 7 (3,311) (2,280) Profit for the financial year 18,656 17,234 Earnings per share from continuing operations attributable to the owners of the parent company during the year Earnings per share Basic c 21.52c Earnings per share Diluted c 20.63c 7

8 UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER Profit for the financial year 18,656 17,234 Other comprehensive expense Items that may be reclassified to profit or loss Currency translation differences on foreign operations (2,769) (3,720) Other comprehensive expense for the year, net of tax (2,769) (3,720) Total comprehensive income for the year 15,887 13,514 8

9 UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 Assets Notes Non-current assets Intangible assets 8 16,150 2,757 Property, plant and equipment 9 299, ,226 Investment in joint venture 1,000 - Trade and other receivables Deferred income tax asset 5,718 4, , ,459 Current assets Inventories 10 35,228 30,273 Trade and other receivables 11 21,798 19,726 Assets classified as held for sale Current income tax receivables Cash and cash equivalents 12 57,482 29, ,596 79,618 Total assets 437, ,077 Equity and Liabilities Equity attributable to owners of the parent Issued share capital Share premium 190, ,268 Capital contribution Merger reserve (65,537) (65,537) Currency translation reserve (6,818) (4,049) Share based payment reserve 8,181 5,349 Retained earnings 53,591 37,663 Total equity 181, ,011 Non-current liabilities Trade and other payables 14 5,534 5,704 Borrowings 13 63,132 42,950 Deferred income tax liabilities 7,854 5,123 76,520 53,777 Current liabilities Trade and other payables , ,948 Borrowings 13 4,545 5,849 Current income tax liabilities 1, , ,289 Total liabilities 256, ,066 Total equity and liabilities 437, ,077 9

10 UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2017 Issued share capital Foreign currency translation reserve Share based payment reserve Share premium Capital contribution Merger reserve Retained earnings Total At 01 January , (65,537) (329) 2,991 20,429 98,289 Profit for the year ,234 17,234 Other comprehensive income (3,720) - - (3,720) Total comprehensive income (3,720) - 17,234 13,514 Share based payments ,441-1,441 Deferred tax on share based payments Issue of ordinary share capital At 31 December , (65,537) (4,049) 5,349 37, ,011 At 01 January , (65,537) (4,049) 5,349 37, ,011 Profit for the year ,656 18,656 Other comprehensive income (2,769) - - (2,769) Total comprehensive income (2,769) - 18,656 15,887 Share based payments ,630-1,630 Deferred tax on share based payments ,202-1,202 Issue of ordinary share capital (note 15) , (1,234) 49,073 Dividends (1,494) (1,494) At 31 December , (65,537) (6,818) 8,181 53, ,309 10

11 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2017 Notes Cash flows from operating activities Profit before income tax 21,967 19,514 Adjustments for: Depreciation and amortisation 5 14,103 11,162 Finance income 6 (420) (325) Finance costs 6 1,494 (197) Net impairment of non current assets Share based payment expense 5 1,630 1,441 Gain on bargain purchase (928) - Loss on the sale of property, plant and equipment ,658 32,290 Increase in trade and other receivables (561) (4,734) Increase in inventories (1,692) (7,386) Increase in trade payables 42,666 28,923 Cash generated from operations 79,071 49,093 Income taxes paid (1,608) (1,404) Net cash from operating activities 77,463 47,689 Cash flows from investing activities Purchase of property, plant and equipment (76,115) (60,763) Purchase of intangibles (5,210) (1,371) Proceeds from sale of property, plant and equipment Purchase of subsidiary undertakings (31,233) - Investment in joint venture (1,000) - Interest received Net cash used in investing activities (112,991) (61,521) Cash flows from financing activities Proceeds from long-term borrowings 45,000 - Proceeds from issue of ordinary share capital 49, Repayment of borrowings (23,666) (3,305) Payment of finance lease liabilities (787) (1,028) Interest paid (1,768) (1,907) Dividends paid (1,494) - Net cash used in financing activities 66,356 (5,390) Net increase/(decrease) in cash and cash equivalents 30,828 (19,222) Cash and cash equivalents at beginning of year 27,739 47,245 Foreign exchange losses (1,085) (284) Cash and cash equivalents at end of year 12 57,482 27,739 11

12 1. General information and basis of preparation ( the Company ) is a company incorporated in the Republic of Ireland. The Unaudited Consolidated Financial Information of the Company for the year ended 31 December 2017 (the Financial Information ) include 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; 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 except as explained in Note 2 below. 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 financial information presented in this report does not represent full statutory accounts. The preliminary release was approved by the Board of Directors. The annual report and accounts will be approved by the Board of Directors and reported on by the auditors in due course. Accordingly, the financial information is unaudited. Full statutory accounts for the year ended 31 December 2016 have been filed with the Irish Registrar of Companies. The audit report on those statutory accounts was unqualified. 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 65 to 74 in those financial statements. 12

13 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, except for the addition of the standards described below: Business Combinations Business combinations are accounted for using the acquisition method as at the date of acquisition. In accordance with IFRS 3 Business Combinations, the fair value of consideration paid for a business combination is measured as the aggregate of the fair values at the date of exchange of assets given and liabilities incurred or assumed in exchange for control. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration will be recognised in accordance with IAS 39 Financial Instruments: Recognition and Measurement in the income statement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date except for deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements which are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively. The fair value of the assets and liabilities are based on valuations using assumptions deemed by management to be appropriate. Professional valuers are engaged when it is deemed appropriate to do so. If the business combination is achieved in stages, the acquisition date fair value of the Group s previously held investment in the acquiree is remeasured to fair value at the acquisition date through profit or loss. For each business combination, the Group elects whether to measure the noncontrolling interests in the acquiree at fair value or at the proportionate share of the acquiree s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. Goodwill Goodwill arises on business combinations and represents the difference between the fair value of the consideration and the fair value of the Group s share of the identifiable net assets of a subsidiary at the date of acquisition. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. 13

14 2. Significant accounting policies (continued) Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. On acquisition, goodwill is allocated to cash-generating units expected to benefit from the combination s synergies. Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Any impairment is recognised immediately in profit or loss. Goodwill arising on investments in joint ventures is included in the carrying amount of the investment and any impairment of the goodwill is included in income from joint ventures. On disposal of a subsidiary, the attributable amount of goodwill, not previously written off to reserves, is included in the calculation of the profit or loss on disposal. Investment in joint operations Joint operations are arrangements where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement. The activities are undertaken by the Group in conjunction with other joint operators that involve the use of the assets and resources of those joint operators. 3. Segmental analysis 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. 14

15 3. Segmental analysis (continued) Analysis of Revenue and Gross Profit 2017 IRL UK USA Total Revenue Fuel 581, ,578 62,973 1,145,168 Food 76,590 21,305 5, ,677 Store 120,515 47,288 11, , , ,171 80,223 1,428,116 Gross Profit Fuel 39,227 22,183 6,674 68,084 Food 44,893 10,828 3,467 59,188 Store 36,306 14,310 3,833 54, ,426 47,321 13, ,721 Analysis of Revenue and Gross Profit 2016 IRL UK USA Total Revenue Fuel 515, ,517 16, ,519 Food 68,019 17, ,246 Store 109,652 42,332 2, , , ,072 19,137 1,177,642 Gross Profit Fuel 32,405 18,699 1,892 52,996 Food 39,444 8,640-48,084 Store 31,525 12, , ,374 39,547 2, ,777 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 Profit before income tax 21,967 19,514 Depreciation 5 13,661 10,890 Amortisation Net impairment charge Net finance cost 6 1,074 (522) EBITDA 37,144 30,522 Share based payments 5 1,630 1,441 Non-recurring charges 5 1,005 - Adjusted EBITDA 39,779 31,963 15

16 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 year. Basic earnings per share Profit from continuing operations attributable to the owners of the Company ( 000) 18,656 17,234 Weighted average number of ordinary shares in issue for basic earnings per share ( 000) 83,000 80,077 Earnings per share Basic (cent) Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares which comprise share options issued under the share incentive plan. Diluted earnings per share Profit from continuing operations attributable to the owners of the Company ( 000) 18,656 17,234 Weighted average number of ordinary shares in issue for basic earnings per share ( 000) 83,000 80,077 Adjusted for: Share options ( 000) 3,060 3,471 Weighted average number of ordinary shares for diluted earnings per share ( 000) 86,060 83,548 Earnings per share Diluted (cent)

17 5. Expenses Profit before tax is stated after charging/(crediting): Cost of inventory recognised as expense 1,220,265 1,011,203 Other external charges 26,130 20,662 Employee benefits 77,990 63,994 Share based payment charge (1) 1,630 1,441 Operating leases 18,309 13,912 Amortisation of intangible assets Depreciation of property, plant and equipment 13,661 10,890 Net foreign exchange (gain)/loss (268) 381 Net impairment charge Loss on disposal of assets Utilities 6,794 5,560 Rates 5,617 4,818 Non recurring charges (2) 1,005 - Other operating charges 34,852 25,988 1,407,239 1,159,816 (1) Included in the charge of 1.6m (2016: 1.4m) for share based payments is a charge of 0.3m (2016: 0.5m) in respect of share options granted during the year under a new share option scheme. (2) Non recurring charges relates to acquisition costs of 1.9m incurred during 2017 offset by a gain of 0.9m in respect of the fair value of net assets acquired over the aggregate consideration transferred arising from the Brandi Group acquisition. 6. Finance costs and income Finance costs Bank loans and overdrafts 1,718 1,485 Variance on translation of foreign borrowings * (345) (1,724) Lease finance charges and hire purchase interest Borrowing costs capitalised (198) (266) 1,494 (197) Finance income Interest income on loans to joint ventures (416) (321) Interest income on loans to staff (4) (4) (420) (325) Net finance cost/(income) 1,074 (522) * The foreign exchange gains arises primarily in respect of non-euro denominated debt. 17

18 7. Taxation Current tax Current tax expense - Ireland 1, Current tax expense - overseas 1, Adjustments in respect of previous periods (220) 216 Total current tax 2,246 1,910 Deferred tax Origination and reversal of temporary differences 1, Total deferred tax 1, Total tax 3,311 2,280 The total tax expense can be reconciled to accounting profit as follows: Profit before tax from continuing operations 21,967 19,514 Income tax at 12.5% 2,746 2,439 Non tax deductible expenses 1, Non-taxable income (1,461) (1,039) Income taxable at higher rates Adjustments in respect of previous periods (220) 216 Total tax expense 3,311 2,280 18

19 8. Intangible assets Goodwill Branding Operating agreements Franchises Licences Assets under construction Total Cost At 01 January ,157 1, ,700 Additions ,902 5,769 Acquisitions 3, , ,393 Disposals (94) (173) - (267) Translation adjustment (45) (26) - (260) (5) - (336) At 31 December , ,521 1,607 5,414 17,259 Amortisation At 01 January Disposals (94) (173) - (267) Amortisation charge Translation adjustment - (2) - (6) (1) - (9) At 31 December ,109 Net Book Value 31 December , ,235 1,009 5,414 16, January ,757 19

20 9. Property, plant and equipment Fixtures, fittings and motor vehicles Computer hardware and software Land and Buildings Plant and equipment Assets under construction Total Cost At 01 January ,416 16,299 69,316 10,723 17, ,398 Additions 30,090 14,864 19,319 2,153 9,594 76,020 Acquisitions 19,568 2, ,860 Disposals (919) (448) (8,804) (1,913) (733) (12,817) Reclassifications 7, , (9,102) - Translation adjustment (2,574) (381) (943) (90) (302) (4,290) At 31 December ,113 32,889 80,915 11,153 17, ,171 Depreciation/impairment At 01 January ,490 2,743 21,510 4,429-61,172 Charge for the year 2,913 1,272 7,428 2,048-13,661 Disposals (866) (404) (8,610) (1,890) - (11,770) Translation adjustment (218) (26) (186) (36) - (466) At 31 December ,319 3,585 20,142 4,551-62,597 Net Book Value 31 December ,794 29,304 60,773 6,602 17, , January ,926 13,556 47,806 6,294 17, ,226 Assets under construction as at 31 December 2017 includes the following significant projects; eight service stations in the Republic of Ireland ( 13.5m), one motorway services area in Northern Ireland ( 0.7m) and one service station in the US ( 1.1m). The remaining amounts relate to several other developments across all regions. 20

21 10. Inventories Raw materials and consumables 1, Finished goods 34,025 29,292 35,228 30,273 The cost of inventories recognised as an expense and included in cost of sales amounted to 1,220m (2016: 1,011m). 11. Trade and other receivables Current Trade receivables 8,112 4,834 Provision for impairment (242) (265) Deposits received from customers (83) (45) Net trade receivables 7,787 4,524 Accrued income 2,822 2,561 Prepayments 5,764 3,455 Other debtors 2,980 5,161 Withholding tax receivable VAT receivable 11 1,355 Amounts due from related companies 2,410 2,646 21,798 19,726 Non-current Other debtors 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 noncurrent trade and other receivables is equivalent to their carrying value. The fair value has been determined on the basis of discounted cash flows. 21

22 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 at bank 40,815 21,002 Cash in transit 16,667 8,372 Cash and cash equivalents (excluding bank overdrafts) 57,482 29,374 Cash and cash equivalents include the following for the purposes of the statement of cash flows: Cash and cash equivalents 57,482 29,374 Bank overdrafts (note 13) - (1,635) 57,482 27, Borrowings Current Bank overdrafts - 1,635 Bank loans 3,820 3,465 Finance leases ,545 5,849 Non-current Bank loans 60,615 39,723 Finance leases 2,517 3,227 63,132 42,950 Total borrowings 67,677 48,799 During the year, the Group drew down loans of 45m and repaid 24m. The funds received were used to further expand the operations of the Group. The Group also extended its banking arrangements with its senior lenders, Ulster Bank Ireland and Allied Irish Bank plc. These new arrangements increased the facilities available to the Company by 20m. 22

23 14. Trade and other payables Current Trade payables and accruals 163, ,105 Other creditors 3,121 1,073 Deferred income 824 1,045 Value added tax payable 2, Other taxation and social security 3,140 1,910 Amounts due to related parties , ,948 Deferred income 5,534 5,704 5,534 5, Share capital Ordinary No. Authorised Shares of 0.01 each At 31 December ,000,000,000 10,000,000 At 31 December ,000,000,000 10,000,000 Issued Shares of 0.01 each At 01 January ,471, ,710 Allotted 11,087, ,871 At 31 December ,558, ,581 During 2017, the Company issued 8,082,105 ordinary shares of 0.01 at an issue price of 5.80/ 5.09 per share, resulting in gross proceeds of 46.3 million. Share premium of 46.2m was recorded on these shares. Directly attributable issue costs of 1.2m have been deducted from retained earnings. 3,005,000 share options were exercised during Share premium of 4m was recorded on these shares. These funds have been used and will be used to further expand the Group. 23

24 16. Business combinations In October 2017, the Group acquired both the Brandi Group, a 42-site retail operation based in South Carolina, USA and the Carsley Group, a seven-site forecourt retail operation based in the UK. The Group acquired the trade and assets of the Brandi Group for a consideration of 8.2m. In accordance with IFRS 3 Business Combinations, this transaction constituted an acquisition of a business and therefore, was accounted for under this standard. The Group also acquired the Carsley Group for a consideration of 23.5m. The Group purchased 100% of the share capital of the following entities: BMC Petroleum Limited MCM Forecourts Limited Wyboston Service Station Limited Cromwell Service Station Limited Muskham Services Limited Casterton Hill Service Station Limited MCM Sandwiches Limited The provisional fair values of the acquired assets and liabilities at acquisition are set out below: Brandi Group Carsley Group Total Non-current assets Intangible assets 4, ,657 Property, plant and equipment 1,334 21,526 22,860 Current assets Inventories 3, ,900 Trade and other receivables - 1,580 1,580 Current liabilities Trade and other payables - (2,424) (2,424) Current income tax liabilities - (443) (443) Non-current liabilities Deferred income tax liabilities - (1,308) (1,308) Total identifiable assets 9,094 19,728 28,822 Goodwill - 3,736 3,736 Fair value gain (928) - (928) Total consideration 8,166 23,464 31,630 Satisfied by: Cash (net of cash acquired) 8,166 23,067 31,233 Deferred consideration ,166 23,464 31,630 24

25 16. Business combinations (continued) The fair value gain of 0.9m is shown within non recurring charges offset against acquisition-related costs of 1.9m. These are included within administrative expenses in the Consolidated Income Statement. The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in respect of a number of the business combinations above given their proximity to year-end. Any amendments to these fair values within the twelve month timeframe from the date of acquisition will be disclosable in the 2018 Annual Report, as stipulated by IFRS 3. The deferred consideration reflects the final consideration made in respect of preacquisition working capital which was outstanding at the year end. This has now been agreed with the sellers and was paid in Q No contingent liabilities were recognised on the acquisitions completed during the year. 17. Post period end events Since the year end, the Group has added one new service area in the Republic of Ireland, seven petrol filling stations in the UK and three petrol filling stations 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 Directors have proposed a final dividend in respect of the 2017 financial year of 0.80 cent per ordinary share, 0.7m in total. This dividend has not been provided for in the Group balance sheet as there was no present obligation to pay the dividend at the year end. The final dividend is subject to approval by the Company s shareholders at the Annual General Meeting. 25

26 Glossary of financial terms The key financial terms used by the Group in this report are as follows: Measure Description Constant currency EBITDA and adjusted EBITDA Constant currency measure eliminates the effects of exchange rate fluctuations that occur when calculating financial performance numbers. They are calculated by taking the current year figures and applying the prior year exchange rates. EBITDA is defined as earnings before interest, tax, depreciation, amortisation and impairment charges. Adjusted EBITDA refers to EBITDA adjusted for share based payments and non-recurring items. The adjusted EBITDA calculation can be found on page 15. Adjusted PBT Adjusted PBT is defined as profit before tax adjusted for share based payments and non-recurring items. Adjusted PBT is calculated as follows: Profit before tax 21,967 19,514 Share based payments 1,630 1,441 Non-recurring charges 1,005 - Adjusted PBT 24,602 20,955 Adjusted EPS Adjusted EPS is calculated using the profit for the financial year adjusted for share based payments and non-recurring items divided by the weighted average number of ordinary shares in issue for basic earnings per share. Adjusted EPS is calculated as follows: Profit for the financial year 18,656 17,234 Share based payments 1,630 1,441 Non-recurring charges 1,005 - Adjusted PBT 21,291 18,675 Weighted average number of ordinary shares ( 000) 83,000 80,077 Adjusted EPS Like for like Net debt position Like for like statistics measure the performance of stores that were open at 01 January 2016 and excluding any stores that were closed or divested since that date. Net debt position comprises current and non-current borrowings and cash and cash equivalents. 26