1st Jul 2020 10:48
(Alliance News) - SSP Group PLC on Wednesday warned thousands roles could be slashed as the food kiosk operator deals with the fallout of Covid-19, which has battered the travel sector.
The Upper Crust brand owner said 5,000 roles from its 40,000 strong workforce will be made redundant as it embarks on a plan to "simplify and reshape" its UK operations. The slashed jobs will be from its UK operations and head office.
"Our expectation is that by the autumn only around 20% of units in the UK will have opened. We have therefore come to the very difficult conclusion that we will need to simplify and reshape our UK business, and we are now starting a collective consultation on a proposed reorganisation," SSP warned.
"If the pace of the recovery continues at the current level, this could lead to up to 5,000 roles becoming redundant from within the head office and UK operations. Clearly, these decisions are very difficult, and our priority is to conduct this process fairly and to support those affected."
SSP forecasts these measures to cost between GBP8 million and GBP10 million.
"At this stage, we have not commenced restructuring of a material scale in any other geographies due to our expectations of a more rapid recovery, the longer durations of furlough support or our contractual lay-off arrangements," it added.
More promisingly, it has noticed a recovery in recent trading. June sales were down 90% annually, faring better than April and May sales which had fallen 95%.
The June showing was down to "stronger performances in Continental Europe and North America reflecting the gradual easing of lockdowns in these regions offset by the UK and Rest of World, where sales remain below this level".
The company said it still expects an operating loss between GBP180 million and GBP250 million for the second half of the year ending September.
"Approximately GBP750 million liquidity is in place leaving us well positioned to operate throughout even our most pessimistic trading scenario," SSP added.
SSP shares were 2.6% lower at 250.57 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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