EG Group said the sale of its UK operations to Asda brought its total debt repayments in 2023 to $4bn, “significantly reducing the group’s net leverage.”
The petrol forecourt business, founded and owned by brothers Zuber and Mohsin Issa, who also own Asda, completed the $2.5bn sale of the majority of its UK and Republic of Ireland business to the supermarket chain in October 2023.
EG Group said the proceeds of the sale have been used to pay down debt, reduce the group’s leverage and have “strength[ened] its platform for international growth and the energy transition.”
The announcement came as part of a trading update for the three months to September 30, 2023. For the period, EG Group’s EBITDA declined by 18% to $345m, which the business said was due to the “impact of lower fuel volumes and a competitive environment.”
Group revenue for the period was £7.6bn, compared with just over £8bn for the same period in 2022.
EG Group delivered gross profit across grocery and merchandise, up 2.8% to $376m. Its food service gross profit jumped 24% to $221m, boosted by increased sales activity and improved margins across the UK and Ireland and Europe.
Food service delivers
Zuber and Mohsin Issa, co-CEOs of EG Group, said: “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.
“On November 27, 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 their statetment, the co-CEOs added: “We continued to deliver upon our key strategic priorities in Q3, including growing gross profit in our food service, and grocery and merchandise businesses. In particular, food service – which continues to represent a significant growth opportunity globally – delivered a standout performance with gross profit up 24% in Q3, driven by increased revenues, as customers responded positively to our evolving and compelling proposition.
Tesla EV link-up
“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.
“The agreement will support the delivery of crucial EV infrastructure for drivers, building on the momentum of our rapidly-growing evpoint business – EG’s proprietary-branded ultra-fast vehicle charging proposition. We see a significant opportunity to deploy EV charging points across our diverse site network.”
The retailers concluded: “As we enter the final weeks of the year, we would like to thank our colleagues for their continued commitment and dedication to EG. We remain focused on executing our proven and successful strategy to create multi-purpose convenience retail sites across our international estate.”