6th Dec 2022 15:31
(Alliance News) - SSP Group PLC, which sells takeaway food to travellers, on Tuesday revealed a remarkable bounce-back from the near-death experience of the Covid-19 pandemic, but now faces the repeated rail strikes in the UK, adding to threats from cost inflation and the durable popularity of working-from-home.
The London-based travel food and beverage outlet operator of brands such as Upper Crust, Ritazza and Camden Food Co said it swung to a profit and revenue multiplied, thanks to a recovery in domestic and leisure travel in the aviation and rail sectors over the past year.
SSP on Tuesday said pretax profit for the financial year that ended September 30 was GBP25.2 million, swinging from a loss of GBP411.2 million the year before. Revenue multiplied to GBP2.19 billion from GBP834.2 million.
SSP said this was due to more passengers in airports and rail stations. Revenue recovered to 90% of financial 2019 levels in the second half of financial 2022 compared to 64% in the first half. This now has reached 104% during the first eight weeks of the new financial year.
SSP said it expects financial 2023 revenue to be between GBP2.9 billion and GBP3.0 billion, rising to between GBP3.2 billion and GBP3.4 billion in financial 2024.
"Whilst we continue to face into a high level of macroeconomic uncertainty and ongoing cost inflation and labour availability challenges, we believe that the travel food and beverage sector will remain structurally resilient to pressures on consumer spending and that our flexible business model will enable us to actively manage and mitigate these impacts and to deliver further improvements in profitability as the travel sector recovers," SSP said.
The company said it expects the resumption of dividend payments to shareholders during its financial 2023.
"SSP has a heavy dependency on railway station sites so the management team will be crossing their fingers that the industrial action we've seen this year doesn't spill over into 2023 and continue to suppress passenger numbers," commented Lara Martinez, food sector and retail analyst at research house Third Bridge.
The Rail, Maritime & Transport union has called two 48-hour strikes against 14 train companies in the UK next week. More strikes are planned in December, including from Christmas Eve to December 27.
Work-from-home may be the bigger long-term threat.
"Our experts say the real concern is a structural change to working patterns," Martinez added about SSP. "Rail traffic may not return to pre-Covid levels for several years to come hampering footfall at SSP sites."
Shares in SSP were up 3.3% to 223.50 pence each in London on Tuesday afternoon. The stock is down 5.0% over the past 12 months.
By Greg Rosenvinge, Alliance News reporter, and Tom Waite, Alliance News editor
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