The EG Group, owned by Blackburn's billionaire Issa brothers, saw a surge in profits in the latest fiscal quarter of the year, according to a new report.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose by 12 per cent to £215 million in the second fiscal quarter (Q2), driven by strong performances in the USA and Europe.

Grocery and merchandise gross margin grew by 2.4 per cent and gross profit increased by six per cent to £256 million, driven by coffee and dispensed beverage initiatives in the USA.

Foodservice saw continued growth as gross profit increased by one per cent to £97m for the quarter. Despite underlying cost increases, the group focused on customer offers and product pricing.

Mohsin Issa, co-founder and chief executive of EG Group, praised a “strong fuel performance” in Germany.

He said: “EG Group delivered a strong performance in Q2 – with underlying EBITDA increasing by 12 per cent, powered by a stand-out performance in the USA and earnings growth in Europe.

“In the USA, we continued to deliver on our strategic growth initiatives, designed to drive an improved organic performance.

"These include expanded dispensed beverage initiatives which – alongside improved margins in the grocery and merchandise segment – helped to grow EBITDA in the region by more than 25 per cent.

“Meanwhile, strong fuel performance in Germany led to a 10 per cent increase in underlying Europe EBITDA.”

At the end of last year, the EG Group announced plans to sell KFC branches to Yum! Brands’ KFC Division, in order to repay debts.

In the quarter, the Group completed the sale of its 216 KFC franchise restaurants in the UK and Ireland to Yum! Brands’ KFC Division, with the proceeds being used to repay debt.

Mr Issa added: “The group also made good strategic progress across the quarter by continuing to strengthen its balance sheet.

“The sale of the Group's 216 KFC franchise restaurants in the UK and Ireland was completed on April 29, and the group remains on track to complete the sale of the remaining UK forecourt business by Q4 2024. Proceeds from these transactions will be used to repay debt.

“This excellent quarterly performance is in no small part due to the hard work of EG colleagues globally – and I would like to thank them sincerely for all their hard work and efforts, as we continue to deliver against our strategy.”

Under the leadership of EG America chief executive and president John Carey, the USA continued to drive its plan to expand through offers, fuel, customer engagement and business efficiency.

In April, the group agreed to sell 19 of its convenience stores located in Kansas and Missouri, which operate under the Minit Mart banner, for £16m. The sale is expected to be completed in September.

In June, the Group agreed to sell 39 of its stores located in Illinois, which also operate under the Minit Mart banner, for £31m, with the transaction expected to be completed in November.

In June it was announced the group’s remaining UK forecourt business and certain standalone food service locations would be sold to to co-founder Zuber Issa.

This is expected to be completed by the fourth quarter. Proceeds from these transactions will be used to repay debt and to “further strengthen [the group’s balance sheet]".

Growth capital expenditure (Capex), a type of capital expenditure a company uses to expand its operations or growth prospects, continued in this fiscal quarter with £30m of investment, a decrease of 39 per cent on Q2 in 2023 as the Group remains focussed on liquidity.