26th Feb 2020 08:45
(Alliance News) - SSP Group PLC on Wednesday said February sales in the Asia Pacific region will be knocked by half due to the spread of the coronavirus, which has forced the company into cost-cutting measures.
SSP operates a number of food and drink brands at travel destinations such as train stations and airports, such as Upper Crust and Cafe Ritazza.
Ahead of its annual general meeting on Wednesday, SSP said it has seen a 90% year-on-year slump in air passenger numbers in China, with Hong Kong roughly 70% lower.
"Across a number of our other Asia Pacific countries, including Singapore, Thailand, Taiwan and the Philippines, passenger numbers are between 25% and 30% lower year-on-year. Elsewhere, we have also seen some impact at our airports in Australia, as well as at major travel hubs in the Middle East and India, although to date this has been less severe," SSP added.
SSP's Asia Pacific region is part of its Rest of the World operating segment, which it says accounts for 14% of group revenue.
In response, SSP said it has "taking all the necessary action we can to reduce costs", this includes temporarily closing units and also trimming operating hours.
SSP warned: "In terms of the financial impact of COVID-19, our expectation is that for the month February, sales across the Asia Pacific region (which accounts for approximately 8% of SSP revenues), will be approximately 50% lower year-on-year.
"Together with the impact in the Middle East and India, this is expected to reduce overall group revenue in February by approximately GGBP10 million to GBP12 million, with a corresponding reduction in operating profit of approximately GBP4 million to GBP5 million."
The full-year impact, SSP said, it "uncertain at this stage".
Elsewhere, SSP said trading in the UK, continental Europe, and North America has been in line with expectations.
Shares in the company were 3.9% lower at 574.00 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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