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Forecourt giant EG Group has announced “resilient” second quarter trading, with sales rebounding by 34%, though inflationary pressures reduced headline profits.

For the three months to the end of June, headline revenues were up 33.5% in constant currency year on year to just under US$9bn.

Group EBITDA for the second failed to grow with revenues, with the figure increasing by 0.2% on a constant currency basis.

On a reported basis, group EBITDA decreased by 6.5% to US$355m due in part to adverse currency movements, but also reflecting the impact of ongoing inflationary and cost-of-living pressures on customer behaviour.

Divisionally, foodservice operations saw gross profit increased by 11% to US$177m, driven by its acquisitions and openings across Continental Europe and the UK and Ireland. It opened 33 outlets in the quarter, bringing its total to 1,889.

Grocery and merchandise gross profits were flat at $346m, despite inflation impacting retail prices.

Fuel margins were flat, with EG Group warning of continued volatility around wholesale fuel costs due to the “going dislocation in energy markets from geopolitical events”.

Zuber Issa said: “Despite a backdrop of challenging market conditions, we continued to perform resiliently in the second quarter of the year, supported by our geographically diverse portfolio and complementary foodservice, grocery and merchandise, and fuel operations.

“The cost-of-living squeeze remains front of mind for all of us, and the group is laser-focused on supporting our employees and helping customers with value for money at this time. EG’s robust performance over the quarter has demonstrated our adaptability, and while the economic outlook remains uncertain, we look forward to the second half of the year confident in our ability to outperform the wider market.

“Alongside acting as a responsible global convenience retailer, we recognise our role in contributing to a more sustainable future. We are pleased to be trialling our own-branded ultra-fast electric vehicle chargers in the UK and plan to introduce them to additional locations by the end of this year.

“This investment further supplements our existing network of approximately 250 electric charging points across 98 sites in the UK and Ireland, Germany and France. We also continue to explore the delivery of other low carbon fuels alongside our planned EV roll-out.

Meanwhile, the group announced that Michael Bradley has been appointed as Group CFO, replacing Paul Altschwager who is stepping down to leave the group in July 2023.

Bradley joins from High Spped Two, where he has been CFO since 2018.

Morning update

Starbucks last night announced that Laxman Narasimhan will become the company’s next chief executive officer after his shock departure from Reckitt Benckiser was announced yesterday morning.

Narasimhan will join Starbucks as incoming CEO on 1 October 1 after relocating from London to the Seattle area and will work closely with Howard Schultz, interim CEO, before assuming the CEO role and joining the Board on 1 April 1 2023.

Starbucks said Narasimhan brings nearly 30 years of experience leading and advising global consumer-facing brands.

It stated: “Known for his considerable operational expertise, he has a proven track record in developing purpose-led brands. Building on companies’ histories, he has succeeded in rallying talent to deliver on future ambitions by driving consumer-centric and digital innovations.”

Most recently, he served as chief executive officer of Reckitt, a FTSE-12 listed multinational consumer health, hygiene and nutrition company, where he led the company through a major strategic transformation and a return to sustainable growth.

Mellody Hobson, Independent Starbucks Board of Directors chair, commented: “Laxman is an inspiring leader. His deep, hands-on experience driving strategic transformations at global consumer-facing businesses makes him the ideal choice to accelerate Starbucks growth and capture the opportunities ahead of us.

“His understanding of our culture and values, coupled with his expertise as a brand builder, innovation champion, and operational leader will be true differentiators as we position Starbucks for the next 50 years, generating value for all our stakeholders. On behalf of the entire Board, I am thrilled to welcome Laxman as Starbucks next CEO.”

During the transition period, Narasimhan will spend time with Schultz and the management team, partners and customers and gaining in-depth exposure to the brand, company culture, and Reinvention plan.

This will initially include Starbucks store immersions, visiting manufacturing plants and coffee farms, connecting with partners around the globe as well as Starbucks long term business partners.

Schultz will remain in the role of interim CEO during this transition period, following which he will continue as a member of the Starbucks Board of Directors. He will remain closely involved with the company’s Reinvention and act as an ongoing advisor to Narasimhan.

Schultz added: ““When I learned about Laxman’s desire to relocate, it became apparent that he is the right leader to take Starbucks into its next chapter. He is uniquely positioned to shape this work and lead the company forward with his partner-centered approach and demonstrated track record of building capabilities and driving growth in both mature and emerging markets.

“As I have had the opportunity to get to know him, it has become clear that he shares our passion of investing in humanity and in our commitment to our partners, customers, and communities. The perspectives he brings will be a strong asset as we build on our heritage in this new era of greater well-being. I greatly look forward to our partnership over the coming months and years.”

Narasimhan commented: “Starbucks commitment to uplift humanity through connection and compassion has long distinguished the company, building an unrivaled, globally admired brand that has transformed the way we connect over coffee. I am humbled to be joining this iconic company at such a pivotal time, as the Reinvention and investments in the partner and customer experiences position us to meet the changing demands we face today and set us up for an even stronger future.”

“I look forward to working closely with Howard, the Board, and the entire leadership team – and to listening and learning from Starbucks partners – as we collectively build on this work to lead the company into its next chapter of growth and impact.”

Elsewhere, AIM-listed Love Hemp Group, the CBD consumer products group, has announced Tesco is now stocking Love Hemp CBD products.

Tesco will initially stock a range of six Love Hemp products across more than 200 Tesco stores including “Tesco Extra” in the UK. Tesco Extra stores are larger, mainly out-of-town hypermarkets that stock nearly all of Tesco’s product ranges, although some are in the heart of town centres and inner-city locations.

The Love Hemp products available include CBD oil drops, sprays, chocolate balls and a new sugar free, gluten free plant-based CBD gummy product.

The company expects to launch its latest range of products in the fourth quarter, available in various delivery forms such as capsules and edibles via direct-to-consumer sales, marketplaces, and other major retailers.

Tony Calamita, CEO at Love Hemp says: “I’m delighted that Tesco have chosen to stock Love Hemp products. Tesco is a major British household name and we are very proud to work with them. It has always been our mission to make CBD accessible and available to as many consumers as possible, and having our products stocked in the vitamin aisles of Tesco brings great visibility to our products and brand.

“We anticipate that Tesco is the first of several new launches in major UK retailers since the publication of the Novel Foods register on March 31st.”

On the markets this morning, the FTSE 100 has rebounded 0.5% from this week’s losses to 7,185.4pts.

Risers include Devro, up 5.5% to 194.8p, McBride, up 4.8% to 23.9p and Nichols, up 2.8% to 1,084.2p.

Fallers include Kerry Group, down 2.2% to €99.08, Naked Wines, down 1.4% to 118.4p and British American Tobacco, down 1.1% to 3,408p. 

Yesterday in the City

The FTSE 100 sank another 1.9% yesterday to 7,148.5 to take its run of material drops to four days.

Consumer goods giant Reckitt Benckiser lost 5.2% of its share price back to 6,304p on the departure of its CEO Laxman Narasimhan, with it subsequently confirmed he was joining Starbucks.

Other fallers included digital names, such as Naked Wines. Down 10.2% to 120.1p, Ocado, down 5.8% to 684.2p, Deliveroo, down 5.6$ to 76.4p, Just Eat, down 5.5% to 1,363.8p and THG, down 4.7% to 52.4p.

Other fallers included Nichols, down 5% to 1,055p, Parsley Box, down 4.9% to 9.75p, SSP Group, down 4.7% to 201.8p, C&C Group, down 4.7% to 164p, Domino’s Pizza Group, down 4% to 226.6p and FeverTree, down 3.8% to 880p.

The day’s few risers included Bakkavor, up 3.1% to 82.4p, Virgin Wines, up 1.8% to 57p, Kerry Group, up 1.6% to €101.29 and McBride, up 1.3% to 22.8p.