Foodservice division helps drive growth at EG Group as lockdown measures ease
Blackburn-based EG Group, the international operator of garage forecourts and owner of supermarket giant Asda, has seen sharp increases in revenues and earnings.
In the three months to June 30, 2021, turnover jumped by 57.7% from $4.130bn to $6.511bn, while second quarter EBITDA rose 23.7% from $307m to $380m.
Figures for the six month period to June 30, show that revenues were $11.839bn, a 20% increase from $9.852bn at the same point a year ago. Interim EBITDA improved by 15.7%, from $557m to $645m.
The group, founded by the Issa brothers, is backed by TDR Capital, which was involved in the £6.8bn takeover of Leeds-based Asda.
In April this year EG Group acquired LEON Restaurants Limited, a prominent British fresh fast food restaurant chain, in a deal said to be worth £100m.
The acquisition, and the easing of pandemic restrictions on the retail industry, has helped to boost the second quarter performance.
The group said Leon’s performance was “pleasing” and that it intends to open around 10 new locations by the end of this year, including its first drive-thru site.
In a joint statement, brothers and co-founders and CEOs of EG Group, Zuber Issa and Mohsin Issa, said: “We continued to make good progress in the second quarter, with a particularly strong performance from our foodservice business, driven by growth in customer demand for take away and delivery services and the easing of COVID restrictions across many of our countries.
“The group’s latest performance is further validation of our successful global strategy.”
They added: “We are also pleased to have completed the acquisition of Leon Restaurants and look forward to expanding its offering with c.10 new restaurant openings planned this year, including the brand’s first ever drive-thru.
“The resilience of our business model has been demonstrated during the pandemic, and we have emerged as an even stronger business as we enter the second half of the year with confidence.”
The group revealed that its gross profits from groceries and merchandise increased from $283m to $351m in the second quarter and from $588m to $645m in the first six months of the year. Its foodservice gross profits rose from $46m to $153m in the second quarter and from $91m to $263m in the first half.
Fuel gross profits improved, from $438m to $478m in the first quarter and from $876m to $893m over the six month period.
Net debt increased from $8.928bn in March 2021 to $9.105bn by the end of June.
Meanwhile, the group hopes to complete the acquisition of 286 filling stations from OMV Group in the second half of this year, following a review by German anti-trust authorities.
