EG Group has reported growth in Q3 across its foodservice business, boosted by increased sales activity and improved margins across the UK and Ireland.
In a trading update for the three months to September 30, 2023, the petrol forecourt business said the sale of its UK operations to Asda brought its total debt repayments in 2023 to $4bn (£3.15bn), “significantly reducing the group’s net leverage.”
The Group’s EBITDA declined by 18% to $345m (£271.8m) in Q3, primarily due to the impact of “lower fuel volumes” and a “competitive environment” in the quarter, as well as comparisons with the exceptional fuel market conditions in Q3 of 2022.
Group revenue was $7,608m (£5994.4) in Q3, compared with $8,060m (£6350.5m) in the same period in 2022.
The business said it continued to make “good strategic progress” in the quarter, delivering growth across Grocery & Merchandise and Foodservice.
Foodservice gross profit increased by 24% to $221m (£174.1m) for the quarter, boosted by increased sales activity and improved margins across UK&I and Continental Europe and driven by increased footfall, particularly across the Benelux region.
Zuber Issa and Mohsin Issa, CBE co-founders and co-CEOs of EG Group said that this category ”continues to represent a significant growth opportunity globally”, delivering a “standout performance” in Q3.
Grocery and Merchandise also saw gross profit increasing by 2.8% for the quarter to $376m (£296.2m)
In the UK&I and Continental Europe, Grocery and Merchandise gross profit for the quarter increased by 12.8% and 5% year, respectively, due to higher sales and a strong focus on product mix and investment in new sites.
“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 on October 31, 2023”, said the Issa brothers.
”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.”
“In the quarter, we also signed a ground-breaking deal with Tesla to purchase their latest ultra-fast charging units – demonstrating how we continue to progress our strategy on EVs and alternative fuels”, they added.
