Sales at SSP have recently recovered to two thirds of pre-pandemic levels but the Omicron variant has added uncertainty to the catering company’s outlook as it reported another heavy annual loss.
SSP said that in the first nine weeks of its new financial year it had 72 per cent of its units open worldwide, delivering 66 per cent of 2019 revenues.
The company recorded a 41.8 per cent slide in annual sales to £834.2 million in the year to end of September compared with the previous year, a 70.1 per cent slump from the sales generated before the Covid-19 outbreak.
As a result of depressed revenues SSP delivered a £411.2 million annual pre-tax loss, slightly above the £425.8 million posted in 2020 but a long way from the £197.2 million profit in 2019.
Shares in the company rose by 6.5p, or 2.8 per cent, to 239¾p in early trading.
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SSP, once part of Compass Group, has 2,700 railway, airport and motorway sites in 35 countries and operates more than 550 brands including Upper Crust and Caffè Ritazza. Prior to the pandemic it served one and a half million customers every day. The £1.85 billion company lost more than half its value when the coronavirus outbreak started and has tapped shareholders for £700 million so far to weather the heavy fall in revenue from travel disruptions.
The company has told the markets it expects it to take until 2024 for like-for-like sales to recover to 2019 levels and said this was unchanged.
SSP said that “whilst there remains some uncertainty in the immediate outlook over the winter months, particularly over the potential impact of the Omicron variant on travel restrictions, we are confident in our ability to manage any near term volatility”.
The company has £635 million of available liquidity, excluding a £300 million Covid Bank of England loan, and said that it was “in a very strong position to trade through even our most pessimistic scenario”.
Last month the company announced it had poached the food veteran Patrick Coveney, 51, from Greencore, the sandwich maker, as its new chief executive after Simon Smith quit after two years to pursue a private equity career.
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SSP said that it had secured 200 new units, which had not been built yet, which should add around £275 million of additional sales by 2024 while new units that had opened just before the pandemic, but had been hit by restrictions, would add another £150 million within three years.
The company said that as the travel sector recovered it saw more opportunities to add space and win sites in tenders as competitors retreated from the sector.
Analysts at Shore Capital said that while the risk to travel restrictions from the Omicron variant weighed on near-term recovery chances they saw the “opportunity to outperform on both new business growth and margins. We believe that a lot of uncertainty is already factored into the current valuation.”
