Applegreen PLC (LON:APGN) said it is trading ahead of expectations thanks to positive momentum seen during the summer, though it swung to an interim loss as the coronavirus pandemic impacted business in the first half.
The Dublin-based petrol station retailer said it saw a “sharp” recovery supported by government stimulus, increased traffic volumes and people vacationing near their homes.
The convenience store chain had EUR480mln of net debt as of August 31, 2020, with cash balances of EUR216mln and gross external debt of EUR697mln.
In the six months to June 30, 2020, Applegreen’s revenue slid by 26% to EUR1.1bn while last year’s GBP10mln profit before tax slumped to a GBP29mln loss. The board did not recommend a dividend.
“With net debt and leverage set to fall significantly over the medium term, post a lockdown hiatus, we view Applegreen as a materially undervalued stock that offers both growth and considerable potential for ratings expansion,” said analysts at house broker Shore Capital in a note to clients.
Applegreeen shares shed 5% to 310p on Friday at the opening bell.
— Adds analyst comment, share price —