Upper Crust SSP Group owner posts second year of losses exceeding £ 400million as travel and work-from-home restrictions continue to weigh on
- SSP Group’s short-term outlook remains uncertain due to Omicron variant
- The owner of Upper Crust revealed that his annual revenue fell by more than 40% to £ 834.2million
- Sales in all regions have fallen significantly, including £ 220million in the British Isles
Take-out food company SSP Group posted another year of disastrous results, although it noted that sales recovered significantly as Covid-related restrictions eased.
The owner of Upper Crust revealed that his income as of September 30 had fallen by more than 40% to £ 834.2million, while pre-tax losses remained above £ 400million for the second year in a row.
Government restrictions that have forced more people to work from home and prevented vacations abroad have severely affected the number of customers as outlets, who are mainly based in travel centers such as airports and stations.
Trade calm: Upper Crust owner SSP has revealed that its revenue in the year through September has fallen by more than 40% to £ 834.2million, while pre-tax profits are remained over £ 400million
Trade in all markets has seen a significant drop, with sales in the British Isles falling to around 12% of their pre-pandemic levels in the first half of the period, and £ 220million in total .
Continental Europe saw a smaller decline in activity, which FTSE 250 attributed in part to more robust retail outlets on German and French highways, and relatively strong demand for train travel. .
However, the reintroduction of restrictions from early January in response to rising rates of Covid-19 infection caused sales to plummet again and helped push the region’s total revenue down by nearly $ 200 million. of pounds sterling.
The SSP warned that the near-term outlook remains uncertain due to the spread of the Omicron variant, but said revenues had returned to about two-thirds of their pre-pandemic levels since the end of September.
After reopening around 800 sites since June, more than 70% of the group’s outlets now trade with customers, and it hopes to increase its turnover by 15% by 2024 by opening 200 additional units.
It recently signed a joint venture agreement with airport operator ADP to develop more than 100 catering sites at Charles de Gaulle and Orly airports outside Paris, and won a £ 200million contract to open many outlets at Bangkok airport in Thailand.
Bounce back: Cafe Ritazza owner SSP warned the short-term outlook remains uncertain, but said revenues were back to about two-thirds of pre-pandemic levels
The company, which also owns Cafe Ritazza and Camden Food Co, said it enjoyed many structural benefits before the pandemic and expects these factors to allow it to profit from the resurgence of the travel industry.
These include a growing trend to eat out, increasing levels of economic growth and disposable income, and significant spending on travel infrastructure and expanding capacity.
“We continue to believe that the markets in which we operate are fundamentally attractive,” the group noted. “The air and rail transport markets are expected to generate long-term growth, albeit from a weaker base, as global GDP recovers and a growing proportion of the world’s population is willing and able. to travel again. ”
He added: “Although Covid-19 has had an impact on these trends in the short term, we believe these growth drivers will return in the medium term once the effects of the pandemic diminish.
“While some uncertainty remains about the longer-term impact of working from home on commuting and virtual technology on business travel, we expect a full recovery in leisure travel, which drive much of our business. ”
The company update comes a week after revealing the planned appointment of current Greencore boss Patrick Coveney as new chief executive next year, replacing outgoing chief executive Simon Smith.
Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown, said: “While still firmly in the recovery phase, investors appear to be encouraged by the return of trade as the number of units has reopened until ‘at nearly three-quarters of pre-pandemic levels.
“Progress is slow, however, and there is still a long way to go to regain full health, especially if commuters are advised not to travel to the office.”
SSP Group shares closed 2.7% higher at 239.6p on Wednesday.