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Oct 9 2020, 06:45 IST/BST
2020 has provided clear evidence of Applegreen’s cash generative business model, exiting August with a better balance sheet than at December 2019 despite severe lockdown disruptions. Notwithstanding the resilience of the balance sheet and earnings, the share remains down 41% year-to-date. Comparable US convenience retailing peers are up on average 12%. We believe this huge performance disparity now leaves the equity potentially mispriced by c.100%. Yes, liquidity is low. Yes, headline leverage looks high (although not as high as you likely think). We encourage investors to ‘do the work’. We think the upside is worth it.