MILAN (Reuters) - Italian travel caterer Autogrill (AGL.MI) said it was sticking with a full-year target of doubling last year’s free cash flow after extraordinary expenses in the first half dragged it down.
The group, which operates restaurants and coffee shops along motorways and in airports, reported a negative free cash flow of 104 million euros ($115 million) in the first half of the year, hit by payments for early retirements in Italy and a high level of investments.
“We confirm we will double last year’s free cash flow in the whole of 2019 as cash absorption seen in the first half will be recovered,” Autogrill CFO Camillo Rossotto told analysts at a conference call after results.
In 2018 the Benetton-controlled group had a positive free cash flow of 33 million euros.
The company also reported 3% growth in like-for-like sales between January and June and improved its forecast for earnings per share this year.
Shares in the group reversed gains and lost as much as 3% after results before closing down 0.9% at 9.45 euros, with the cash flow issue a feature of the earnings call.
The company lifted its estimates for earnings per share to between 0.90 euros and 0.95 euros for 2019 as a whole, from a previous estimate of 0.88-0.93 euros.
Net profit in the first half was boosted by the sale of Autogrill’s Canadian motorway business and its operations in the Czech Republic, which together generated capital gains of more than 100 million euros.
The group posted a net profit of 115 million euros between January and June, or 130 million euros excluding the impact of the IFRS16 accounting standard.
In the same period last year Autogrill booked a loss of 3.4 million euros.
The group continues to look for bolt-on acquisitions, Autogrill CEO Gianmario Tondato Da Ruos said in a video posted on the group’s website after results.
In a recent Capital Market Day, the travel caterer said it was looking at opportunities to expand its business in the convenience retail business.