Growing food sales have fuelled a boost in profitability at petrol forecourt retailer Applegreen (APGN) as the group builds on ambitions to expand in the UK convenience and food-to-go market.

Total revenues in the six months to 30 June rose 7.4% to €556m (£465.2m) thanks to “robust” growth in Republic of Ireland where the majority of the business’ 200-plus sites are based.

Applegreen said 5.5% growth in like-for-like gross profit to €68.5m (£57.3m) was mainly driven by a 13.4% increase in like-for-like food sales. Adjusted EBITDA also increased 15% to €13m (£10.8m) and pre-tax profits jumped from €3m (£2.5m) in the same period last year to €7.5m (£6.3m).

The group, which has partnerships with brands such as Burger King, Subway, Costa and Greggs, opened 17 new food outlets in the half, including the launch of new food offering Freshii.

Applegreen said at the time of its stock market flotation in June 2015 that it would use part of the €70m raised to expand its presence in the UK convenience and food-to-go market and accelerate its new site opening programme.

Its estate grew from 200 sites at the start of 2016 to 220 at the end of the first half, with a strong pipeline of new sites, particularly in UK.

CEO Bob Etchingham said trading in the Republic of Ireland was strong but a more competitive environment in the UK hurt growth in the early part of the year. Revenue remained flat during the half in the UK as a result of lower fuel prices and weaker sterling.

“The decision by the UK public to exit the EU took place in late June so had no significant impact on the figures for the six months,” Etchingham added. “Looking to the future, the lower sterling/euro exchange rate will obviously impact on our consolidated figures but otherwise it is too early to assess what impact the decision will have on our business.”

Trading since the end of June had been positive with improvement in the UK.

Applegreen shares are trading down 0.7% to 385p this afternoon despite jumping 1.4% first thing this morning. The stock is, however, almost 30% higher since the group June 2015 flotation which valued it at about €300m.

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