UK staycation boom boosts Welcome Break

Welcome Break motorway service stations have seen a sharp recovery thanks to the UK staycation boom and increased traffic volumes.
Welcome Break's service stations remained open throughout the crisisWelcome Break's service stations remained open throughout the crisis
Welcome Break's service stations remained open throughout the crisis

The firm’s parent company, Applegreen, said food volumes increased to 91 per cent of the previous year by the end of August.

Motorway services have benefitted from holidaymakers choosing to stay in the UK rather than risk having to go into coronavirus quarantine for two weeks if they go abroad.

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Applegreen said its trading was resilient in the first half of 2020 in an unprecedented environment where Covid-19 hit all of its markets.

It reported a strong recovery in volumes after the initial lockdown in April and this positive momentum has carried on into the third quarter covering July, August and September. The firm said trading is ahead of management’s expectations in the third quarter.

The group said its balance sheet has recovered strongly from the initial impact of Covid-19, giving it ample liquidity and asset strength. It reported group revenue of £1bn in the six months to June 30, a fall of 27 per cent due to the impact of Covid-19 lockdown restrictions.

In order to preserve liquidity in the current environment, the board is not recommending the payment of an interim dividend.

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The firm has expanded its estate and now has 559 sites. Its service stations remained open throughout the crisis, albeit some with significantly reduced food franchise operations.

Sales volumes fell to 57 per cent of the prior year period in April during the peak of the lockdown, improving significantly to 29 per cent of the prior year in June. This recovery continued as remaining food operations were reopened.

Whilst management remains cautious around the on-going uncertainty caused by the Covid-19 pandemic, the board said it is confident that Applegreen is well positioned to benefit from future opportunities.

Applegreen’s chief executive, Bob Etchingham, said: “The first half of 2020 has been an unprecedented period due to the Covid-19 pandemic and I am immensely proud of the tremendous efforts of our people in supporting our customers and local communities throughout this challenging period.

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“Applegreen carried good momentum from last year and traded strongly for the first ten weeks of the year. However, we saw a sudden and significant impact on the business from mid-March, particularly in our motorway service areas.”

He said this was most pronounced in April and May, but volumes had recovered well by the end of the second quarter.

“To help mitigate some of this impact, the group took swift and decisive action in managing our cost base and tailoring our retail offer for changing consumer needs,” he added.

“Encouragingly, this recovery has continued over the summer months with the further lifting of restrictions, Government stimulus packages and the staycation trend, all of which has improved traffic volumes.

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“This performance further demonstrates the resilience of our business model and of our sector. We have learnt a lot during this crisis and are confident that we will emerge as a stronger organisation that is well positioned to benefit from future opportunities across all of our markets.”

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