Asda’s billionaire owners the Issa brothers have seen EG Group’s Q2 profits slump, as the petrol station forecourt and convenience retail business said “the cost-of-living squeeze remains front of mind for all of us”.
The group’s Q2 trading update – which covers both the three months and half-year results to 30 June 2022 – shows that total reported revenue increased by 24.4% to £132bn ($15.2bn) during the first half of the year.
However, the impact of “ongoing inflationary and cost-of-living pressures on customer behaviour” saw profits drop, with group EBITDA falling by 3.1%, from £559m ($645m) to £542m ($625m) over the full six-month period.
Group EBITDA for Q2 also fell by 6.5% to £307m ($355m) year-on-year, despite total revenue for the three-month period increasing by 23.7% to £7.2bn ($8.3bn).
Gross profits in the grocery and merchandise division were $346m over the three months to June, up 0.4% from $345m the previous year, offering consistency despite “inflation impacting retail prices”. Foodservice gross profits were $177m, up from $160m a year ago, largely driven by store acquisitions across Europe and the UK, which took the total number of outlets to 1,889.
Gross fuel profits across the global forecourts business also increased over the quarter, reaching $511m, up 7% from $478m in 2021. Fuel profits for the half-year jumped by 11.1%, reaching $993m, up from $893.
Noting this jump, EG Group highlighted the continued volatility around wholesale fuel costs due to the “ongoing dislocation in energy markets from geopolitical events”, adding that fuel margins were flat on a quarter-on-quarter basis,
“The cost-of-living squeeze remains front of mind for all of us, and the group is laser-focused on supporting our employees and helping customers with value for money at this time” said EG Group’s co-founder and ceo Zuber Issa CBE.
“EG’s robust performance over the quarter has demonstrated our adaptability, and while the economic outlook remains uncertain, we look forward to the second half of the year confident in our ability to outperform the wider market.”
The group also announced that HS2’s Michael Bradley has been appointed group chief financial officer, replacing current cfo Paul Altschwager, who will be leaving the group in July 2023.
