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Profits have fallen at forecourt operator EG Group on the back of lower third quarter volumes.
The group, owned by the Issa brothers, reported an 18% decline in EBITDA to $345m in the three months to the end of September, blaming lower fuel volumes and “a competitive environment”.
Revenues also declined almost 6% to $7.6bn, down from $8.1bn in the same quarter in 2022.
EG said it continued to make “good strategic progress” in the period, with gross profits growing in the grocery & merchandise and foodservice divisions, up by 2.8% to $376m and 24% to $221m respectively.
Co-founders and co-CEOs Zuber and Mohsin Issa said: “We continued to deliver upon our key strategic priorities in Q3, including growing gross profit in our foodservice, and grocery and merchandise businesses. In particular, foodservice – which continues to represent a significant growth opportunity globally – delivered a standout performance with gross profit up 24% in Q3, driven by increased revenues, as customers responded positively to our evolving and compelling proposition.”
EG completed the sale of its UK operations to Asda, which the brothers also own, generating $2.5bn of cash.
It used the proceeds - together with cash from a sale & lease back transaction in the US and another non-core US asset disposal - to pay down almost $4bn of debt in 2023, reducing the group’s net leverage.
“We made significant progress in the quarter with our deleveraging strategy and putting in place a sustainable capital structure for the medium to long-term, following completing the sale of the majority of EG Group’s UK business to Asda,” the Issas added.
“On 27 November, we achieved an important milestone by addressing all our remaining 2025 maturities through successfully completing our refinancing activities. These included the amend & extend of term loans from 2025 to 2028 – and issuing new senior secured notes. We remain focused on deleveraging the business and driving earnings growth in the near term.”
Morning update
Revenues at Rémy Cointreau fell 22% to €636.7m as the French spirits group as conditions in the US market deteriorated.
The business said the first-half results reflected “strong destocking” in the US.
Operating profits plunged 43% year on year to €169.1m as a result.
CEO Eric Vallat said: “Our half-year results were heavily impacted by developments in the US market, which has faced cyclical headwinds including high inventories linked to a sharp normalisation of consumption, an unprecedented promotional environment, and rising interest rates.
“Against this backdrop, we are staying the course, convinced that our value-driven strategy remains underpinned by favorable medium- and long-term trends.”
The FTSE 100 opened down 0.4% to 7,394.03pts.
Early risers included McBride, up 4% to 67.8p, Naked Wines, up 3% to 34.8p, and PZ Cussons, up 1.8% to 148p.
Cranswick, Science in Sport, Greencore and THG are down 3.2% to 3,828p, 2.1% to 11.5p, 2.1% to 97.1p and 2% to 78.2p respectively.
Yesterday in the City
The FTSE 100 continued its run of poor form, falling 0.4% to 7,426.96pts.
Deliveroo shares climbed 1.8% to 147.9p as the group hosted a capital markets event and revealed a big push into wider non-food delivery.
Climbers included McBride, up 12.5% to 66.1p, Naked Wines, up 6.2% to 33.9p, Pets at Home, up 5.2% to 309p, Ocado, up 4.8% to 594.2p, and THG, up 1.4% to 79.4p.
Science in Sport, Compass Group and Kerry Group were down 4.2% to 11.5p, 2.4% to 2,022p and 2% to €73.94.
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