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MS International PLC hails “positive changes” in petrol station market amid interest in supermarket forecourts

“The long-established ownership of stations by the large international oil companies is diminishing and passing to that of that a small number of privately owned, well-funded, entrepreneurial groups”

MS International PLC (LON:MSI) has noted the “notable and very positive” changes in the structure of petrol station ownership in the UK.

The engineering company, whose diverse activities range from building petrol stations to providing services to the defence sector, reported a return to profit in the past year, sending its shares gushing 22.15% to 198.5p this morning.

The company said: “There continues to be a notable, and very positive change, in the structure of petrol station ownership in the UK. The long-established ownership of stations by the large international oil companies is diminishing and passing to that of that a small number of privately owned, well-funded, entrepreneurial groups.

“Consequently, there is considerable investment taking place to enhance their station operations, creating what is being termed ‘mobility hubs,’ that will offer, not only a wide variety of fuel options, but also high quality and spacious convenience stores; fast-food outlets; rest areas and internet amenities plus superior car valeting facilities.”

Petrol stations are said to be behind the recent takeover of Asda where the Issa brothers have since spun off the petrol stations estate (to themselves), as well as this week’s bid for Morrisons by private equity group CD&R, the takeover of petrol stations group Applegreen by a consortium led by Blackstone, and investment in their own estates by oil giant Shell and BP as we shift towards electric charging, where drivers will have time to shop while they wait for their car batteries to be topped up.

MS International was helped in the past year by its petrol station business benefiting from sites being designated essential businesses during the pandemic, allowing them to remain open.

It said: “As travel restrictions were eased, so the need for structural maintenance and new builds gained momentum and there was a pleasing marked restoration in our UK activities.

“Unfortunately, there was not a similar freedom of movement across mainland Europe and consequently our operation in Poland – which traditionally services customers from Scandinavia and across Eastern Europe – had a much reduced, activity level throughout the period.”

It said it expects to do well from movement in the overall UK petrol station market, while its forgings business, which was hit by both Brexit and COVID-19, has seen market conditions start to improve since early 2021.

The turning point for the past year was the defence sector, where international marketing was restrained due to the pandemic and the UK Ministry of Defence market was subdued, but evaluation trials for MSI’s naval weapon system by the US navy went well and it has been awarded a contract to supply seven systems

It was hopeful of further production orders, and meanwhile it has received an order from a US shipbuilder to supply eight similar weapon systems for a US government Foreign Military Sales Programme.

It said: “This important break-through in the United States defence market, is a direct result of our persistent and purposeful marketing effort within the US over many years and our relentless, and crucially important, investment in product development programmes for the world markets.”

The company moved from a full year loss of £3.25mln to a profit of £1.59mln and lifted its final dividend from 1.75p to 6.5p.

The outlook was said to be “much brighter than we could have imagined twelve months ago.”

Read More: MS International PLC hails “positive changes” in petrol station market amid interest in supermarket forecourts

2021-06-22 04:26:00

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