Applegreen forecast to report strong growth in earnings

Irish hotel group Dalata and service station chain Applegreen are both due to report first-half results tomorrow.

Davy is forecasting 19 per cent growth in adjusted earnings before interest, taxes, depreciation, and amortisation (ebitda) to €12.8 million for Applegreen, driven by a combination of additional sites and the company’s growing food-to-go business.

“We forecast 48 new forecourts including group dealer sites year on year, representing 27 per cent growth in total estate,” Davy said.

Applegreen reported a 16 per cent rise in group revenue to €517 million from €445 million in the six months to the end of June 2015. Earnings before interest, tax, depreciation and amortisation increased 42 per cent to €10.7 million during the same period.

Davy is forecasting 28 per cent growth in revenue and 44 per cent growth in ebitda to €33.85 million for Dalata.

It noted Dalata had spent or committed to spend about €175 million in acquiring hotels and securing development assets during the first half.

Strong environment

“On outlook, we expect a positive update from management given the strong operating environment in Ireland, as witnessed by continuing strong RevPar (revenue per available room growth).”

Dalata, which currently has more than 7,700 rooms across 42 owned, leased and managed hotels, is continuing its rapid growth in Ireland, with plans to develop up to 1,000 rooms by 2018. Fewer than 1,800 of its rooms are in the UK.

It reported revenue of €225.7 million for 2015, and pretax profit of €28.5 million. For the first half of last year, Dalata reported profit before tax of €2.7 million and revenue of €97.7 million.