Profits at the billionaire Issa brothers' EG Group fell during the first three months of the year, new figures have revealed.
The Blackburn-headquartered group has posted an EBITDA of $228m for the period to March 31, 2023, compared to the $270m it achieved during the same months in 2022.
EG Group, which includes Euro Garages, Cooplands and Leon, also posted a revenue of £7.2bn, up from $6.9bn.
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Its US EBITDA also decreased by £12m "reflecting competitive market pressures following oil price decreases in the quarter".
However, the group added that the impact was "short lived and we have seen margins recover in Q2 to date".
The figures come after a deal worth more than £2bn which will see Asda acquire the majority of EG Group's UK and Ireland operations was confirmed at the end of May.
Asda is to buy most of EG Group's fuel, foodservice, grocery and merchandise business for £2.27bn.
The group said the proceeds, together with the net proceeds of $1.4bn from the recent sale and lease back transaction in the US, will be used to repay debt. News of the deal was first reported in January.
EG Group will continue to operate in the USA, Australia, Germany, France, Italy, the Netherlands, Luxembourg and Belgium, while also retaining around 30 UK sites – including the first Euro Garages site in Bury – which are close to the group headquarters.
The Cooplands bakery business and certain other foodservice brands will also be retained.
After the deal is completed, the group said it will generate over $25bn of annual revenue and more than $1bn of EBITDA, across 5,500 locations.
The Waterside offices in Blackburn will remain as the global headquarters and shared service centre for the group. The transaction is expected to complete in the fourth quarter of 2023.
EG Group added that the deal will reduce its total net debt from $9,801m in March 2023 to $5,375m when it is completed.
Co-founder and co-CEO Zuber Issa said: "The sale of EG UK&I to Asda is an important step for the group and provides a platform to further invest across our diverse international portfolio, where we continue to see compelling opportunities to accelerate our proven and successful strategy to rollout foodservice, and grocery and merchandise to create multi-purpose convenience retail sites across our estate.
"We also have a significant near-term opportunity to deploy emerging fuels and EV chargers, across the existing site network and third-party locations.
"The group has now delivered a combination of strategic actions, including the US sale & leaseback transaction – which delivered net proceeds of $1.4bn – that will enable us to significantly reduce our overall leverage to below five times, in line with our financial policy and deleveraging strategy.
"We will now be addressing our upcoming maturities, including a three year amend and extend of our term loans, which will help us to put in place a sustainable long-term capital structure. We remain committed to achieving a net leverage multiple of mid four times in the near term.
"Over the last 22 years, we have built a hugely successful global multi-purpose convenience, fuel retail and foodservice business and this will continue from our global headquarters and shared service centre in Blackburn under the existing leadership team.
"In Q1 we delivered another robust set of results, with strong performances in most regions and significant growth in Foodservice gross profit, which was up 10% on the prior year.
"Our future ambitions are unchanged and, following the Asda transaction, we will continue to operate across three continents and nine countries, benefiting from a strengthened balance sheet, strong cash generation and $6bn of freehold property. This provides continued geographic diversification, scale and an unrivalled platform from which to grow.
"I would like to reiterate my thanks to all EG colleagues. Their tireless work has enabled our continued success, and we look forward to the future with confidence."
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