Euro Garages shrugs off slow economy with record sales1 August 2011
Fast growing forecourt group to step up acquisitions following new £110m funding agreement.
Euro Garages, one of the UK’s largest independent forecourt retailers, has defied the economic gloom by posting strong growth in sales and profits in its latest annual trading update.
The Blackburn-based group said retail turnover – which includes sales from its network of SPAR convenience stores as well as its Starbucks, Subway and Burger King franchises – had risen 28 per cent in the 12 months to 31 July*, and now accounted for more than £50m of annual revenues.
Total sales at the group, BP’s largest independent fuel distributor with a portfolio of 70 freehold-owned sites, were up 5 per cent to £300m (2010: £285m).
The business, which is chaired by former ASDA Chief Executive Andy Bond, said profits (ebitda) were on track to reach £12m for the year, up 26 per cent from £9.5m last time, thanks to the enhanced contribution of its retail brands.
The group also announced it had secured a new £110m funding agreement to support its acquisition strategy. It said the new debt facilities, which replace the group’s previous arrangements, would provide substantial additional funding as it steps up its consolidation strategy within the forecourt retailing sector.
The facilities were led and arranged by Euro Garages’ existing banking partner, Lloyds Bank Corporate Markets, and supported by Handelsbanken.
Andy Bond, Chairman of Euro Garages, said: “Our continued investment in the estate, innovative model and commitment to service is helping us secure the loyalty of new and existing customers, who buy-into the value and quality of our offering. This is translating directly into strong sales growth across fuel and retail despite a challenging landscape.
“As well as targeting larger acquisitions to expand our estate, this focus remains a key pillar of our growth strategy as we seek to become the UK’s leading forecourt retailer.”
Mohsin Issa, Managing Director of Euro Garages, said: “The new funding agreement provides significantly increased financial muscle at a time of unprecedented opportunity in the market, with several oil majors divesting their forecourt estates and convenience retailing experiencing strong growth. This places the group in a prime position to capitalise on opportunities to further build our size and scale and take the business to the next stage of its development.”
He added: “The support we’ve received from Lloyds Bank Corporate Markets and Handelsbanken demonstrates their commitment to our quality-led model and their confidence in our management team.”
Paul Foster, Director and Deputy Head of Large Corporate at Lloyds Bank Corporate Markets, said: “The Euro Garages team have an outstanding track record of delivering growth in the forecourt market through a commitment to innovation and operational strength.We’re committed to supporting the business as it continues to deliver its consolidation strategy.”
Euro Garages was advised by Mark Taylor of Ernst & Young’s capital and debt advisory team and Eversheds.
Euro Garages was founded in 2001 by the Issa family with a single petrol filling station in Bury, Greater Manchester.
*Unaudited figures for the year ending 31 July 2011.