Maxol announces €100M investment programme as part of new growth strategy

404
  • Staycations and working from home contributed to strong 2021 performance 
  • Cautious outlook for 2023 as Maxol CEO calls for extension of Temporary Business Energy Support Scheme  

The Maxol Group has announced a €100M investment programme as part of the company’s new 2023-2027 strategic plan.

Today’s announcement was made by Maxol Group CEO, Brian Donaldson who confirmed a strong company performance for 2021, underpinned by unusual contributory factors including the proliferation of staycations and people working from home.

Maxol is a leading Irish, family-owned forecourt and convenience retailer and newly released figures for the company for 2021 show a profit before exceptional items of €26.9M, an increase of 57% on 2020 (€17.1M).

“The trends that emerged during the pandemic certainly provided a ‘Covid bounce,’” said Brian Donaldson.

“But it is Maxol’s long-term investment strategy that has been instrumental in driving the company’s performance in 2021 and indeed, the 2022 period to date.”

Investment

Since 2018, Maxol has invested c €87M on the redevelopment of existing sites, the acquisition of new sites, the introduction of sustainability measures across the business and the development of its fresh and chilled food offering.

Redevelopments generally result in larger retail and forecourt space, new or additional indoor and outdoor seating areas, more parking spaces, additional staff and proprietary offers such as ROSA coffee, the Maxol Deli and Premium fuels. Despite Covid-19 putting the company’s capital investment programme on hold for much of 2021, the business still succeeded in investing €7M across seven sites.

2022 will account for €12.5M worth of capital expenditure with Maxol sites in Kilkenny and Mitchelstown, Cork being the most recent beneficiaries, where a spend of €2.8M has resulted in bigger, brighter, lower carbon footprint stores, more parking and more food-to-go and eat-in options for customers.

Five-year strategic plan 2023-2027

Maxol is entering a new strategic era, as the business continues to prepare for the transition to lower emission vehicles.

“We are building on the good work and consistent investment of the past five years and have created a blueprint for how we will continue to transition the business in line with the reduction in fossil fuel sales and the rise in low and zero emission vehicles,” said Brian Donaldson.  “To achieve this, we have ringfenced €100M, which is a significant commitment for a family-owned Irish business that demonstrates the scale of our ambition.”

Brian Donaldson confirmed that under the new strategic plan, Maxol hopes to acquire a number of new sites in 2023, which could result in the business growing to 250 service stations across Ireland.

In addition to site acquisition and streamlining operational efficiencies through technology, the planned €100M investment plan will also be geared towards growing Maxol’s non-fuel incomes, with a focus on food and convenience retail. In light of this, Maxol is calling for retail planning guidelines (introduced in 2012) and outline caps on retail space to be changed, as they are no longer relevant. Brian Donaldson says the cap on retail space in the forecourt and convenience sector needs to be removed.

“At the moment our sector has a cap on retail floorspace of 100m² irrespective of location. These retail planning guidelines not been reviewed since 2012 so they’re very much out of date and our sector has changed considerably as we make the move from fuel to food. Retail stores in other sectors have much higher caps: in Dublin the cap is at 4,000m² and it’s 3,500m² in the cities of Cork, Galway, Limerick and Waterford. Today we’re calling for the cap on retail space in our sector to be removed.”

Maxol aims to extend the number of Burger King drive-thru’s in its network from three to nine and will continue to develop its food credentials with more fresh food to go and take-home meal solutions, while offering more high quality, locally sourced and produced goods.

“Supporting local has always been a priority for Maxol and I strongly believe we have a responsibility to spotlight indigenous producers wherever possible,” said Brian Donaldson.  “Maxol has joined the Champion Green movement that backs local businesses, and we are finalising plans for a new initiative that will give even more local businesses an opportunity to have their products on sale at Maxol sites around the country.

“Our food and convenience retail offerings are becoming more important to the business as we see more people shopping local more often, due in part to the emergence of the hybrid working model,” said Brian Donaldson.“

This shift in consumer behaviour began during Covid-19 but has endured as people continue to support local. We have laid the foundations for future growth by the way in which we have planned our stores, which are conveniently located in towns and villages and run by local people for local people.”

Challenging outlook

According to Brian Donaldson, 2023 will present a more challenging business environment with the big issue of energy costs remaining a priority for households and businesses alike.

“Like every other business, we are operating in a highly volatile and unpredictable market and the cost of doing business is rising exponentially.  Consumer prices are also rising but interestingly, in our sector we have not yet seen any significant contraction in customer spend, which is at odds with current economic indicators.

“However, I believe that the real impact will be felt after Christmas. People will be more cautious as household budgets become squeezed, which will result in reduced consumer spend at the tills. This is where technology can play a role and we are likely to see an uptake in Maxol Loyalty App members seeking out special offers and rewards, such as a free ROSA coffee or car wash.

“So we are heading into 2023 with a resilient business model backed by a major investment plan, but with a strong degree of caution knowing that next year is unlikely to mirror the performance seen in 2021/2022.”

Call to extend TBESS scheme

With energy costs spiraling and many smaller businesses already starting to struggle, Maxol is of the view that the government needs to do more to support indigenous SMEs in the face of rising energy costs.

“While we welcome the fact that there has been an intervention in the energy crisis with targeted supports through the Temporary Business Energy Support Scheme, we’re calling on government to extend the scheme to at least summer 2023 and to remove the cap of €30,000 per month per business. This cap prevents businesses with multiple retail outlets of availing of the scheme.  So many SMEs are struggling, and they need more Government support and certainty on energy costs,” said Brian Donaldson.

Maxol’s environmental journey

Maxol’s environmental journey continues to evolve and sustainability remains a priority for the business under the company’s new five-year strategic plan. “Clearly ours is a company that sells fossil fuels, but that does not preclude Maxol from joining the fight against climate change and reducing our own carbon footprint across multiple areas of the business,” said Brian Donaldson.

Maxol has invested in a wide range of initiatives that deliver energy efficiencies such as energy-saving heating, lighting and water systems: incorporating heat recovery, solar energy, and grey water harvesting for a lower carbon footprint and reducing waste through the use of compostable and environmentally-friendly packaging.

Maxol’s Premium fuel range, available at 45 sites, helps reduce vehicle CO2 emissions, leading to cleaner running vehicles on the road.  Launched in conjunction with international sustainability company GreenPrint, the programme also invests in carbon off-setting projects, resulting in 35,143 tonnes of carbon being offset since 2020.

EV Hub – a first for NI

“Maxol is committed to supporting the move to EV with destination service stations that fulfil all customer fuel needs,” said Brian Donaldson.

“However, our EV strategy is to roll out EV services gradually and to be site specific to meet demand where it is most needed. Over the summer we began trialling cutting-edge technology at Townparks in Antrim, which will create the blueprint for forecourt developments across our network. We are using technology to create a measurably different service station, reducing the site’s existing carbon footprint by up to 40%. This includes the introduction of photovoltaic (solar) panels, low energy CO2 refrigeration systems; exhaust air-heat pump technology to reduce heating loads and an energy management system to monitor and control the overall energy usage on the site.”

In a first for Northern Ireland and a significant step for the business, Maxol Kinnegar in Co. Down will deliver the first dedicated Electric Vehicle (EV) hub complete with five high-speed chargers servicing up to six vehicles at any one time. It opens on December 5 and planning applications for similar EV Hubs have been lodged for Maxol Newbridge and Maxol Ballycoolin, which the company hopes to develop in 2023.

The journey for Maxol continues with the total number of Maxol service stations around Ireland at 242.  More than 80 people are employed directly and more than 1,000 indirectly by The Maxol Group across the island of Ireland.