SSP confident in travel recovery and ‘in a strong position’ for future opportunities

Travel caterer SSP Group has expressed confidence in the recovery of the travel market and its own position to capitalise on future market opportunities.

In its financial results for the year ended 30 September, the group reported revenue of £1.43b, down 47.9%, and like-for-like sales down 50.8%, heavily impacted by Covid-19 and the closure of most of the global travel markets since March. It also reported a pre-tax loss of £425.8m against a £197.2m profit last year.

From very low sales in the third quarter of the year (93% lower year-on-year), passenger numbers increased gradually over the final quarter of the year. By the end of September numbers were 76% lower year-on-year and the group has been able to open more than a third of its units.

Across its UK business, although in the summer there was a slight recovery in the air sector, the UK government’s quarantine restrictions limited passenger numbers. A slow recovery in the rail sector was observed during the fourth quarter, driven by people returning to the office, however this was curtailed by further government restrictions announced towards the end of September. SSP’s UK business reported revenue of £410.1m.

Simon Smith, chief executive of SSP Group, said: “Our priority continues to be the health, safety and welfare of our people and our customers, and this has been front of mind as we’ve re-opened our units. By renegotiating rents, rationalising our menus and reducing our unit overheads, we’ve created a new, more flexible operating model. This has allowed us to respond rapidly to passenger demand, successfully re-opening more than a third of our units by the end of September and delivering an important service to the travelling public.

“While we expect passenger numbers to remain subdued over the winter, we are optimistic that, alongside good progress with the vaccination programme, we will see a significant upturn in both domestic and international travel from the spring. We are ready to respond quickly. The actions we are taking to rebuild the business will put us in a strong position to capitalise on the recovery as well as future new business opportunities, enabling us to deliver long term sustainable growth for the benefit of all our stakeholders.”

Further lockdowns, notably in the UK and Continental Europe, have resulted in further volatility in passenger numbers, and as a result SSP said it expects sales during the first quarter of the 2021 financial year to remain broadly in line with the final quarter of the year, approximately 80% lower year-on-year. This volatility is expected to continue through the second quarter.

SSP operates food and beverage concessions in airports, train stations and motorway service stations. Prior to the onset of Covid-19, the group served around one and a half million customers every day at approximately 180 airports and 300 rail stations in 35 countries and operated more than 550 international, national and local brands across around 2,700 units.