3rd Jun 2020 08:50
(Alliance News) - SSP Group PLC, which operates catering and retail units at airports, on Wednesday said that it swung to a pretax loss for the first half of financial 2020 due to a "material impact" from the Covid-19 pandemic.
The FTSE 250-listed company also said that it will launch a dividend reinvestment equity offering of up to GBP26.8 million to save cash and give shareholders the opportunity to reinvest their 2019 final dividend into new SSP shares.
Shares in SSP were down 3.2% at 295.60 pence each in London on Wednesday morning.
Chief Executive Officer Simon Smith said: "Covid-19 has had an unprecedented impact on the travel sector.
"Looking forward, and with sufficient liquidity to manage a pessimistic trading scenario, I believe the actions we have been taking during this crisis will make us a fitter and stronger business, well placed to deliver for all our stakeholders as the travel market recovers."
For the six months to March 31, the company recorded a pretax loss of GBP32.7 million compared with pretax profit of GBP39.3 million a year ago.
First half revenue fell 1.6% to GBP1.21 billion from GBP1.26 billion. Like-for-like sales were down 8.4%, heavily hurt by Covid-19 and the closure of most of the global travel markets during March.
SSP estimates that Covid-19 reduced its first half sales by between GBP145 million and GBP150 million.
"As indicated in our February trading update, we began to see a material impact on trading in our Asia Pacific region from the escalation of the virus during late January and throughout February. Trading then deteriorated rapidly across the entire group during March as the impact of the pandemic spread across the world," the company explained.
SSP decided against declaring an interim payout and has suspended its share buyback programme.
Separately, the company said said it intends to conduct a placing of new shares to allow shareholders re-invest their 2019 final dividend.
SSP's final dividend of 6.0 pence per share - which was approved by SSP's shareholders at the company's AGM on February 26 - with a record date of March 6, will be paid on Thursday.
The London-based company has launched an accelerated bookbuilding process to allow shareholders and investors to re-invest the 2019 final payout. In addition, certain directors and managers intend to re-invest all or part of their dividend entitlement through subscription for new shares.
SSP additionally has launched a retail share offer for re-investment of 2019 final dividend.
Together, the total proceeds from the fundraising will not exceed GBP26.8 million, SSP said, being the total value of the 2019 final dividend.
By Tapan Panchal; [email protected]
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