Finance

Revenue driven up 20% at EG Group as profits slip from record levels

Revenue jumped by more than 20% at the billionaire Issa brothers’ EG Group during its latest financial period, according to newly-released figures.

The Lancashire-headquartered group, which is backed by TDR Capital, has reported a total revenue of $7.1bn for the three months to September 30, 2021, up from the $5.9bn it posted for the same period in 2020.

The third-quarter results also show its group EBITDA fell from $476m to $428m.

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The results come after reports suggested the Issa brothers are considering a merger between Asda, which they bought in a £6.8bn deal last year, and EG Group.

During the period, EG Group completed the acquisition of 52 KFC restaurants.

Its deal for bakery chain Cooplands was announced following the end of the financial period.

Zuber and Mohsin Issa

In a joint statement, co-founders and co-CEOs Zuber and Mohsin Issa said: “We are pleased with the progress of the business over the past quarter.

“While all parts of EG Group made a good contribution, foodservice was the stand-out performer during the quarter, driven by strong customer demand for delivery, click and collect and the overall quality, range and locations of our foodservice outlets.

Revenue driven up 20% at EG Group as profits slip from record levels

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“Against a record-breaking comparative period last year, this quarter’s results are in-line with expectations and further validate EG group’s vision of delivering a modern and compelling retail experience, to support our global growth strategy.

“During the quarter and after the period ended, we completed a number of strategically important M&A transactions, including the acquisition of Cooplands, the UK’s second biggest bakery chain.

“This represents the second foodservice business we have acquired outright, following on from the acquisition of Leon.

“We are excited by the quality of the business and the potential growth opportunities to expand our foodservice network across the UK.

EG Group's headquarters in Blackburn, Lancashire
EG Group’s headquarters in Blackburn, Lancashire

“We also succeeded in further strengthening our business in the US, with the acquisition of 34 new fuel and convenience store locations, which expands our presence to 33 states across America.

“Together these deals significantly enhance the quality and scale of our foodservice portfolio, complementing our wider fuel business.

“The start of the Q4 period has been characterised by ongoing macro-uncertainty, with some of our international markets facing renewed lockdown restrictions.

“Nevertheless, our business has demonstrated its resilience during the pandemic period, with customers continuing to make essential journeys, holidaying at home more often and showing increasing demand for food delivery, convenient local shops, click and collect, delivery and food-to-go services.

“With the combination of our proprietary brands, Leon and Cooplands, and our strategic partnerships with some of the world’s most popular brands, we are well-placed to make further progress in the final quarter of the year.”

The group added that chief strategy officer Michael Hughes is leaving to become chief executive of a private company outside of the sector.

He will stay on with the group until the end of the year.

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