Upper Crust owner SSP slumps to huge annual loss - but boss predicts booming 2021 European summer of travel

The firm expects sales during the first quarter of the 2021 financial year to be down ‘approximately 80%’ year-on-year

The travel catering giant also owns Caffe Ritazza

SSP

17 December 2020

London-based catering giant SSP today reported dramatic year-end results showing a nearly £240 million dive into the red.

The FTSE 250 firm, behind airport and railway station staples Upper Crust and Caffe Ritazza, is heavily reliant on tourism and commuter traffic.

The group, which operates in 180 airports across 36 countries, revealed a £239.6 million pre-tax loss on an underlying basis in the year to September 30, down from a £203.2 million underlying pre-tax profit a year earlier. Even after the summer reopening, by September 30 sales were still 76% lower year-on-year.

In its outlook, the firm said it now expects sales during the first quarter of the 2021 financial year to be down "approximately 80%" year-on-year.

At the height of global lockdowns in March, just 10% of SSP's 3000-plus units were open. Today, around 950 are trading.

Chief executive Simon Smith said he is confident that domestic and European travel is to come back in a big way this summer, however, and see revenues return.

Pointing out that the firm’s new business was up 6% pre-pandemic, he said: “I'm not a doom-monger.

“We’re ready to capitalise on the market recovery, and we are expecting that market to recover as the vaccine rollout progresses.

“It doesn’t matter who you talk to - friends, family, other business colleagues - there’s a massive pent up demand in domestic and leisure travel.

“European leisure might have its strongest year ever, frankly, because it’s going to be the place where people want to go this summer.”

The firm, among travel and leisure sector giants to have announced thousands of job losses this year, has cut costs. It launched a £216 million share placing in March and, by September 30, had around £520 million of liquidity headroom.

“We anticipated it would be a long drawn out recovery, and we acted accordingly,” Smith said.

The firm has not been helped by the fact that commuters have failed to return to railway station concourses since March.

But Smith said that the "will people come back to offices in London?" question is being "overplayed".

"I think people enjoy what comes with being in offices," he said. “People might want a bit more flexi-time, and that’s no bad thing for us. If people smooth out their journeys, that might give us an opportunity to offer a better service through the whole day.”