UK/INTERNATIONAL. Travel food services company SSP said today that revenues in the first four months of its financial year – to 30 January – reached 62% of 2019 levels.
In a trading update, SSP said that this represented “a good start to the new financial year, notwithstanding the impact of the Omicron variant of Covid-19 on the travel sector”.
As reported in its preliminary results in early December, sales ran at around 66% of 2019 levels in the first nine weeks of the new financial year (1 October to 5 December 2021). This was led by the rail sector, at about 71% of 2019 levels, with the air sector at 62%, boosted by an extended holiday season in the Autumn across the UK, Continental Europe and North America.
The spread of the Omicron variant and subsequent government restrictions hit passenger numbers in many markets, leaving overall group sales in the latest eight weeks (from 6 December to 30 January) at around 57% of 2019 levels.
SSP said in a statement: “Trading remained resilient during December and throughout the holiday period, before softening in early January. The recent weeks have been more encouraging, as government restrictions have been lifted in the UK and some Continental European markets, with sales now trending positively again, driven mainly by strengthening trading in the rail sector as commuter travel returns.”
SSP said it continues to “actively manage unit openings and closures in response to the fluctuating demand” and currently has around. 1,950 units open, or 72% of the estate.
In line with the fourth quarter of 2021, underlying EBITDA (on a pre-IFRS 16 basis) was positive during the first quarter of the financial year. Net cash flow during the first quarter was broadly neutral as working capital continued to benefit from payment deferrals.
In early February, SSP repaid the £300 million drawn from the Bank of England under the Covid Corporate Financing Facility (CCFF), leaving pro-forma available liquidity at £630 million at the end of the first quarter (31 December 2021), compared with £635 million at the end of September (on a similar proforma basis, excluding the CCFF).
Looking ahead, SSP said that despite the impact of Omicron, it could manage any short-term volatility.
“Subject to no further government restrictions being introduced, we are well positioned for the important Summer trading period. Our medium-term expectations, which are for a return to like-for-like revenues and EBITDA margins at broadly similar levels to 2019 by 2024, remain unchanged,” it added.
*In 2021 SSP Group marked 60 years since it began offering food services to travellers. Click here for our story tracking its progress and evolution over the years.
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