Applegreen reviewing UK hotels stake and US plans
Forecourt retailer Applegreen, which has six sites in Northern Ireland, is reviewing its newly-acquired hotel operation in the UK with all options on the table for the business.
It's also involved in initial discussions in the United States that could see it further expand its footprint there.
Applegreen has three motorway service stations in Northern Ireland, along with three smaller petrol stations.
Applegreen acquired 29 hotel premises in Great Britain when it bought just over a 55% stake in UK motorway service operator Welcome Break last year in a €440m (£377m) deal.
Applegreen has an option to lift its stake to 70% within six years. But the hotels, operated under the Ramada and Days Inn brands, are outside Applegreen's core competencies. "It's not a sector we know a whole lot about," said chief executive Bob Etchingham. "We are learning, and we do anticipate coming to some conclusions on that before the year is out."
Mr Etchingham said that it's "a little bit early" to speculate on the likely outcome of the review.
"The first phase of this work is for the management team to get to know the sector and it isn't a business that we've been involved in at all," he said.
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"The second stage will be starting to look at the options. We're at the very beginning of the process. I don't want to pre-judge anything. You can imagine the full range of potential outcomes here, and I genuinely don't know where it's going to end up."
Applegreen chief operating officer Joe Barrett also confirmed that the group is in initial talks with US-based CrossAmerica following a deal the American firm did late last year to acquire 192 forecourts from Circle-K owner Alimentation Couche-Tard in an asset swap.
Applegreen has done previous deals in the US with CrossAmerica. Most recently, it signed a deal with CrossAmerica to lease 43 filling stations in Florida, expanding the Irish group's US presence. Applegreen currently has 121 outlets along the eastern seaboard in the United States, in South Carolina, Massachusetts and New York's Long Island.
CrossAmerica indicated last year that it was already in talks with unnamed operators in relation to the 192 forecourts it will acquire over the next two years from Couche-Tard.
"We're in discussions, but these things, they take time," Mr Barrett said.
Mr Etchingham added: "It could happen, but then again it may not happen."