Applegreen to invest €1bn in major expansion programme
Print26 November 2024
Applegreen has recently announced that it plans to invest €1 billion over the next five years to expand its business.
According to the roadside retailer, the capital expenditure programme will include a major expansion in Ireland and the United States, as well as investments in its Welcome Break business in Britain, and its growing EV charging network.
In a statement, Joe Barrett, Applegreen co-founder and group chief executive, 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.”
“Applegreen plans to invest €1 billion in the business over the next five years as we redevelop our sites and grow our operations, both organically and through acquisitions.
“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 business
In the United States, Applegreen currently operates more than 100 motorway service areas, and it believes there is significant scope to expand this part of its overall business.
“Our focus is on growing our travel plaza business in the US, particularly on the East Coast,” Barrett added. “We currently have 106 travel plazas in States such as New York, New Jersey, Connecticut, Maine, Pennsylvania, Delaware, Ohio, and Indiana, and we are very keen to expand our presence there building upon our established and trusted relationships with the roads authorities.”
Food focus
Applegreen noted that Food is now the main element of business in the US, where it operates restaurant and café brands such as Burger King, Shake Shack, Chick-fil-A, Popeyes, Starbucks, Dunkin, Panera Bread and Panda Express.
“Applegreen is a hospitality business, as we have over 700 food outlets across our estate, including 300 in the United States, and traditional fuel now accounts for less than 20% of our gross profit,” Barrett stated.
“In the US, we are focussing on larger sites, where food is at the heart of the offer.
“We are fortunate in that we have a unique position in the US market, as we are a highly experienced operator of food businesses, convenience stores, EV charging infrastructure, and traditional gas filing stations. Most other operators in the States cannot offer that ‘one-stop shop’ for road authorities.”
Significant investment
Applegreen also intends to continue to invest significantly in both the Irish and UK markets.
Barrett highlighted: “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.”
Recent expansions
Earlier this year, the Irish forecourt operator opened a new €10 million service area at Clondrinagh in Limerick and upgraded its Midway Service Area in Portlaoise with a €3 million investment.
It is also due to open a new motorway services area off the M3 in Dunshaughlin, Co Meath next year with an EV charging hub, a fuel forecourt, and four separate food options.
Applegreen is also investing heavily in its growing EV charging network, which has more than 1,200 fast chargers – both company-owned and third party owned – at more than 130 of its locations on many of the busiest motorways and roads in Ireland, the UK, and the US. Applegreen intends to invest more than €85 million over the next five years to expand its EV network.
The company’s gross profit increased by 9% to €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 last year.
“Applegreen had a very positive performance in 2023 across all three of its markets,” Mr Barrett said. “As we continue to bring new sites on board, upgrade some of our existing locations, and expand our EV charging network we expect significant growth in the business in Ireland, the UK and the United States.”
Revenue from it’s food operations and convenience store business increased by 11% during the year.
The company noted that turnover at Applegreen, which employs 17,000 people at its 592 sites in Ireland, the UK and the United States, declined by almost 6% to €3.9 billion due to a fall in fuel prices.
Irish business
It’s Irish business generated sales of almost €1.1 billion last year, while Applegreen’s UK turnover was just over €2 billion, and US sales were worth €0.8 billion.
Applegreen recorded a loss before tax of just under €83 million last year, which was marginally lower than 2022, ‘due to the impact of depreciation and amortisation, financing costs, and €12 million in non-recurring charges related to the opening of newly refurbished sites and the expansion of the Group’s EV business’.
“We are currently in growth mode and are investing for the long-term strategic success of the business,” Barrett said.
During 2023, the Irish business benefitted from its recent investment in the Braeburn Coffee brand, a strong performance from its branded food offering, and the expansion of its partnership with M&S.
Read more: Applegreen transforms its Midway service area with €3m upgrade
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