UK/INTERNATIONAL. Leading travel food & beverage group SSP today revealed its full-year results to 30 September, and said it is aiming for recovery from around (northern hemisphere) Spring next year as travel recovers and vaccine programmes are rolled out.
The company posted revenue of £1,433.1 million in the year, down -47.9% at constant currency and -48.7% at actual exchange rates. Like-for-like sales fell -50.8%, and were heavily affected by COVID-19 and the closure of most travel markets since March.
SSP posted a pre-tax loss of £425.8 million on a reported basis under IFRS 16. On a pro forma IAS 17 basis, the underlying loss before tax was £239.6 million compared to a £203.2 million profit in 2019.
At the end of the financial year, sales had recovered to 24% of pre-COVID-19 levels, and SSP had around 1,200 units open.
On recent trading, SSP said that Q3 sales were down by -93% year-on-year, but that passenger traffic had improved gradually in Q4.
It noted: “In response to the recovery of the travel sector over the Summer, we were able to open over one third of our units globally. Since the end of the year, the re-emergence of the virus and further lockdowns, notably in the UK and Continental Europe, have resulted in further volatility in passenger numbers. As a result we expect 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 of the new financial year.”
CEO Simon Smith said: “Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses in all geographies. We have taken rapid and decisive action to reduce costs, preserve cash and to substantially strengthen the group’s financial position.
“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 reopened 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.”
The company said that its strategy was to reopen as quickly as possible but only “where they will contribute to cash profitability. To do this we have focused on creating as much flexibility as possible in our key operating costs, such as labour and unit overheads, allowing us to open and operate units at break-even levels of profitability, even at very low levels of sales.”
It said it had agreed “progressive opening programmes with the vast majority of our clients, as well as negotiating the removal of MAGs and the introduction of more flexible rental structures”.
Other elements in the strategy include simplifying product ranges and menus, focusing on the most popular items, and reducing complexity throughout the production process and supply chain, along with accelerating the deployment of customer-facing technology and automation.
Over the year SSP secured contract extensions at Vienna Airport, Zürich Airport, Seattle Airport and at airports in Thailand.
In Australia, it secured a four-year contract to operate three new units at Hobart Airport, and recently won a full-service on- board catering contract for the Norwegian-Swedish train line. New openings included: in China, two multi-brand food courts in Shenzhen and Shanghai Hongqiao airports; in Australia, outlets at Perth and Melbourne airports, following the acquisition of the Red Rock business earlier in the year; and in the USA, at Seattle and Salt Lake City airports, following contracts wins last year.
