DAVY VIEW

We think Applegreen’s share price has been held back by residual liquidity/capital concerns and low visibility on the earnings power of the business through H1 20 and into 2021. We think today’s results should prove a major catalyst for the re-rating of the share. We now expect Applegreen to exit FY20 with a balance sheet in a better position than FY19, which is a remarkable achievement. We also now think there is potential for FY19 earnings to be achieved in FY21 absent further material and prolonged lockdowns. This would put Applegreen on c.10x 2021 P/E. We could easily see the stock re-rate >50% from these levels.