Lancashire-based EG Group make finance announcement after turbulent year

The company, founded by brothers Mohsin and Zuber Issa, has had an unsettled year, but said the last three months to September 30 “delivered a resilient performance”, with underlying earnings before deducting costs and taxes of $284m - broadly in line with the previous year.

It comes as the company continues executing its strategic transformation into a more focused, US-led operation, which will see the headquarters move to Charlotte, North Carolina.

There have also been other big changes for the Group this year, with several key appointments, including Russ Colaco becoming Group CEO following Mohsin Issa’s decision to step down from executive responsibilities, and the sale of its Italian and Australian businesses to repay debt.

On October 1, the Group also completed the sale of its Cooplands bakery business to a team of investors based in Yorkshire as part of the wider strategy to focus on its key operations.

What the CEO said

Russ Colaco, CEO of EG Group, said: "We are pleased to have delivered a consistent year-on-year performance in the quarter, despite highly competitive market conditions and a cautious consumer environment. We also maintained our focus on progressing our strategic priority of building a more focused business centred on our core US and European markets.

“Our non-fuel businesses performed well during the quarter, with foodservice gross profit up 7 per cent and grocery and merchandise revenues growing across Europe, offsetting competitive fuel market dynamics in the US.

"During the quarter we successfully repriced our Term Loans, generating significant additional free cash flow to fund disciplined growth investments. Additionally, the organic growth initiatives we've deployed are gaining momentum. Our SmartRewards loyalty programme now has over 3.6 million members and we're seeing encouraging early results from our Krispy Krunchy Chicken rollout. We’ve also made great progress with our strategy to roll out the Cumberland Farms brand across the US through a number of rebranding initiatives.

“While we remain mindful of macro-economic uncertainties, I'm confident that our strategic focus on core markets, disciplined capital allocation, and continued investment in our customer proposition position us well for growth sustained value creation."

Resilient trading performance

The Group said that competitive market dynamics impacted US fuel performance, “however we saw positive trends in shop sales and fuel volume increases, and effective cost management across the business.”

Foodservice gross profit rose seven per cent to $110m, supported by double-digit growth in Europe with grocery and merchandise gross profit broadly flat at $332m, with 6 per cent sales growth in Europe, where the business benefited from the continued rollout of REWE Express concessions in Germany, which continue to deliver strong returns on capital.

Fuel gross profit decreased five per cent to $440m as volumes remained broadly stable. The Group's competitive pricing strategy in the US supported volume recovery, with year-on-year growth returning in July and continuing through October, having exceeded the industry-standard OPIS benchmark since April.