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Last year there were a lot fewer cars on the road in Britain — we collectively drove 21% fewer miles than in 2019, according to government stats. That might not be surprising — but what is surprising is that in spite of this, one of property’s highest-profile investors still managed to increase profits from his huge petrol station property business.
Gerald Ronson’s GMR Capital saw operating profit rise 13% to £41.5M in the 12 months to September, new accounts filed at Companies House show.
That only takes in half of the period of the coronavirus pandemic, but the company said that its sites had remained open because they are essential retail and had continued to perform well. It said competition from petrol stations at supermarkets and other big rivals was a more substantial threat to it than the impact of the pandemic.
The company owns the freeholds and leaseholds on 260 petrol stations across the UK.
Revenue for the company fell by 13% to £1.13B. But costs fell by more — 15% — allowing it to increase profits. The accounts did not delve into how the company drove down costs.
The value of the company’s portfolio also increased, with a revaluation adding £37M and taking the total portfolio value to £712M. The accounts caveat this rise by explaining that only 21 of the properties were revalued by an external valuer, CBRE, with the remaining 239 being revalued by the directors.
Ronson combined his Rontec petrol stations business with his Snax 24 forecourts business in 2015 to create the enlarged Rontec group, for which GMR is the holding company. It is one of the 10 largest owners of petrol stations in the UK.
Ronson has been in the petrol business for more than 50 years; he opened his first forecourt in St Albans in 1966. He was an innovator in the sector, having been the first owner to introduce retail stores into petrol stations in the UK.
More recently he has tied up with brands like Subway, Greggs and Costa to drive retail revenue on top of the sale of fuel.
He calls it his Saturday job because he still drives around the country on a Saturday, checking on individual stations to ensure they are up to scratch.
He has also called petrol stations his “f*** you” business because while property may be cyclical, petrol stations produce steady income.
When Ronson started out, there were more than 38,000 petrol stations in the UK, while today there are fewer than 9,000, which he has said makes the sector resilient. The much-heralded death of the privately owned car, potentially hastened by the onset of autonomous vehicles, still seems a very long way off — the number of UK car journeys was still rising by about 1% a year on average before the coronavirus hit, government data showed.
The number of car journeys fell by 25% last year, the same data showed, but the number of van journeys only fell 9% and the number of lorry journeys only fell 6%, with the numbers perhaps kept resilient by the need for everything to be delivered during the pandemic.
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