Still on Top – Gerard Boylan speaks to IF&CR
While the brand is one of the most recognisable in Ireland, Top Oil seems to have a strategically considered approach to market growth.
Not only did Top Oil purchase Ashbourne Oil in the North East in August last year, but this January they announced significant plans to buy the retail trading business of service station company Sirio Retail Operations in a deal worth in excess of €10 million.
Sirio currently employs 110 people and with stores in Kildare, Wicklow, Laois, Westmeath, Longford, Dublin and Cork, it’s an ambitious purchase. The transaction also includes the acquisition of the Sirio Retail Operations head office.
With 180 Top Oil Service Stations across Ireland, 21 home heating oil depots and its large import terminal in Dublin selling over 1.3 billion litres of oil per year – Top Oil are in it to win it.
Speaking about the Ashbourne deal, Top Oil CEO Gerard Boylan told IF&CR: “It is another positive acquisition for us, as it bridges the gap between Dundalk and Drogheda in our national home heating oil Depot Network.”
Ashbourne Oil’s former owner, entrepreneur Ray Coyle, is said to have parted with the business to concentrate on his Tayto Park venture.
“It was an amicable deal, Ray Coyle has been a valuable, long term customer of Top Oil and everyone in Top Oil is delighted at the success Ray is having with Tayto Park.” Gerard said.
But it’s not just through acquisitions that Top Oil has found growth, as it enjoyed an increase in its retailer network last year by adding at least 15 new Top Oil Service Stations to its portfolio.
However adding new retail sites was not the full extent of its ambitions for last year.
“Along with securing new retail sites, we completed a significant amount of work reviewing and enhancing our current network, service and offerings,” Gerard said. “There has been a substantial amount of time and effort invested in developing Top Oil’s online presence and in our customer contact centres. So in terms of growth and improving the business, 2015 was a successful and extremely rewarding year for Top Oil.”
“Our retailer network is the largest component in our transport fuel business. Although the market is very competitive, we have an innovative brand and offering that really appeals to retailers, and that’s a vital part of being able to grow our Top Oil retail business each year.”
The competitiveness in the market is also driving a significant push for investment. While there is still caution due to recent stock market volatility, confidence is returning.
With Irish growth in the realms of five per cent, 2016 is expected to see forecourt owners take the opportunity to improve their facilities and get ready for a competitive period ahead.
“Are we in an investment phase? Yes,” Gerard said. “We are planning and working to get the Sirio acquisition completed by March 31 whilst at the same time continuing to seek out new business opportunities across Ireland and Northern Ireland that will add considerable value to our ambitious plans for Top Oil.”
Gerard added that the newly acquired Sirio Retail Operations represented Top Oil positioning to a more retail-centred approach in the transport fuel business.
“It will involve managing the shops and this purchase will put us in a favourable position to add on additional locations,” he said. “The Sirio retail sites will all be branded as Top Oil and this acquisition will give us a foothold in convenience shopping.”
“It’s an area where there is plenty of interest, especially as the economy is returning to growth so quickly.”
“The plan is to complete the acquisition and integrate this new business into our existing business,” Gerard said. “We then want to bring additional strategic locations into our national retail network and deliver new offerings. It’s just one of a number of important priorities we have set for our Top Oil business for 2016.”
While the company is moving into the convenience sector, it remains one of Ireland’s leading oil importers of Quality Assured fuel products. Convenience may be on the rise, but with oil prices falling to shock lows (€38 a barrel at time of writing), how is Top Oil coping?
“For consumers, it is very good news,” Gerard said. “If you look at fuel prices compared to two years ago they are very low, especially for home heating oil, the cost has halved over the last two years – consumers are saving up to €1,000 on their annual home heating oil costs.
“When you add that saving to the lower cost of petrol and diesel, it’s a lot of money going into consumer pockets and we are getting this feedback first hand from our customers.
“We carry significant stocks of oil, especially in our 55,000 tonne import terminal, and we have to work hard to manage price exposure in a declining market, but we are used to working with these fluctuations – we’ve been at it for an extremely long time.”
However, Gerard pointed out that while consumers were benefiting from low prices, there were a number of drawbacks to prices lowering to the levels they have recently got to.
“On a macro-basis, low prices are great for consumers, but it does lead to divestment in oil production capacity which is not good for consumers in the long-term.
Demand will continue to increase and the reduction in production facilities that comes with divestment will lead to a shortfall which will flow through to price levels. We don’t know for sure what will happen to the price of oil, but it definitely will rise at some stage – the question is when.”
It’s their expertise in all things fuel that Gerard believes is at the heart of Top Oil’s brand and continues to attract the ever increasing numbers of retailers into the Top Oil family year-on-year.
“Our customers know that we only deliver Quality Assured fuel products from the refinery all the way through to the pump – they know exactly the journey of their oil, from ‘Port to Pump’,” Gerard said.
“We have a large national network of Top Oil Service Stations, fuel card locations, motorway service areas and home heating oil depots, and this enables us to be extremely flexible and responsive to our retailers’ needs.
“We’ve been in business a long time, over two hundred years and we build genuine relationships with our retailers’ right across the country for the long-term. We believe long-term growth is the only way forward and the recent steps we have taken strongly reflect this belief and build mutual trust.
“We have an excellent reputation and we are acknowledged for being fair and sincere to our retailers, and that’s something we take great pride in and that will always be important for our company.”
While business growth is looking strong at Top Oil, Gerard does see a number of challenges both in the short-term and long-term, including the increased use of biofuel blends.
“Ireland is moving ahead of other neighbouring countries in the biofuel blends percentages. We need to be careful with regard to the path forward on this, the stability, reliability and sustainability of the bio supply lines needs to be considered carefully,” Gerard said.
With Top Oil regularly proving their expertise in this area, it’s a warning worth heeding.