8th Dec 2021 15:42
(Alliance News) - SSP Group PLC last month hired the chief executive of Greencore Group PLC to be its own new CEO, starting in March next year.
Patrick Coveney will be swapping a sandwich maker for a sandwich seller, joining the operator of Upper Crust and other travel food outlets from the convenience food producer.
He will be making the switch just as the recovery in travel, even more important to SSP than to Greencore, has suffered a setback from the Omicron variant of Covid-19.
"The news last month that Patrick Coveney would become group CEO of SSP Group could provide a much needed shake up for the business," said Russell Pointon, director of Consumer at research house Edison Group.
"As the firm operates out of branded catering and retail units at airports and railway stations, its success is clearly linked to the number of passengers willing to travel. With the Omicron variant threatening new lockdown measures and travel restrictions, the firm's future success is less than certain."
SSP on Wednesday said it reduced its annual loss, even as revenue continued to be hurt by the pandemic.
The London-based company reported a pretax loss of GBP411.2 million in the year that ended September 30, narrowed from GBP425.8 million the year prior.
Revenue dropped by 72% to GBP834.2 million from GBP1.43 billion, but operating costs were cut by 17% to GBP309.2 million from GBP363.9 million.
Free cash outflow was reduced to GBP58.1 million from GBP394.9 million, "reflecting the group's continued tight management" of operating costs and working capital over the year.
SSP blamed the revenue decline on the continued damage caused by the pandemic to trading. Five months of the prior financial year were pre-pandemic.
Nonetheless, SSP, which has concessions in 180 airports and 300 railway stations in 35 countries around the world, noted that revenue trends over the summer and autumn steadily improved.
Revenue had averaged 66% of pre-Covid 2019 levels in the first nine weeks of the new financial year, it said. Currently, around 72% of the units in the company's estate are open.
SSP said it plans to open 200 new outlets that have already been secured and is forecasting to add a further 15% to revenue by 2024.
Furthermore, the company expects like-for-like revenue and earnings before interest, tax, depreciation, and amortisation margins to return to pre-pandemic levels by 2024.
"Though still in the recovery phase, SSP has made strong progress, particularly during the second half of the year, when we delivered positive underlying earnings before interest, taxes, depreciation, and amortisation and strong free cash flow generation," Deputy Chief Executive & Chief Financial Officer Jonathan Davies said.
Davies will run day-to-day business for SSP once current CEO Simon Smith departs and before Coveney arrives.
SSP shares were up 3.0% at 240.20 pence each on Wednesday afternoon in London. The stock is down 13% so far in 2021.
By Abby Amoakuh; [email protected]; and Tom Waite; [email protected]
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