SSP Group, a leading operator of food and beverage outlets in travel locations worldwide, announces its financial results for the year ended 30 September 2020. SSP responded rapidly to Covid-19, taking extensive action to protect its people, raise additional liquidity and reduce its cost base, leaving it strongly placed to capitalise on the recovery of the travel sector.
Commenting on the results, Simon Smith, CEO of SSP Group, said: “Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses in all geographies. We have taken rapid and decisive action to reduce costs, preserve cash and to substantially strengthen the Group’s financial position. I want to thank our teams for their dedication and professionalism during this time, especially when faced with extremely difficult decisions.
Our priority continues to be the health, safety and welfare of our people and our customers, and this has been front of mind as we’ve re-opened our units. By renegotiating rents, rationalising our menus and reducing our unit overheads, we’ve created a new, more flexible operating model. This has allowed us to respond rapidly to passenger demand, successfully re-opening more than a third of our units by the end of September and delivering an important service to the travelling public.
“Whilst we expect passenger numbers to remain subdued over the winter, we are optimistic that, alongside good progress with the vaccination programme, we will see a significant upturn in both domestic and international travel from the Spring. We are ready to respond quickly. The actions we are taking to rebuild the business will put us in a strong position to capitalise on the recovery as well as future new business opportunities, enabling us to deliver long term sustainable growth for the benefit of all our stakeholders.”
Financial highlights:
- Revenue of £1,433.1m: down 47.9% at constant currency; 48.7% at actual exchange rates.
- Like-for-like sales2 down 50.8%: heavily impacted by Covid-19 and the closure of most of the global travel markets since March.
- Operating lossof £363.9m on a reported basis under IFRS 16, including non-underlying net operating costs of £48.5m. On a pro forma IAS 17 basis, the underlying operating loss3 was £211.7m (2019: £221.1m profit).
- Loss before tax of £425.8m on a reported basis under IFRS 16. On a pro forma IAS 17 basis, the underlying loss before tax3 was £239.6m (2019: £203.2m profit).
- Basic loss per share of 76.1 pence on a reported basis under IFRS 16. On a pro forma IAS 17 basis, underlying basic loss per share3 of 45.4 pence (2019: underlying basic earnings per share of 29.1 pence).
- Net debt of £692.0m on a pro forma IAS 17 basis, up from £483.4m at 30 September 2019.
- Further covenant amendments recently agreed, including a waiver of the leverage test until reinstated in March 2022.
- Liquidity position remains strong, with cash and undrawn available facilities of around £520m at the end of September.
Business Highlights:
- Good first half performance prior to the outbreak of Covid-19; strong net new space growth at 5.7% and further progress on our strategic initiatives.
- Rapid and effective response to Covid-19 to protect our people and the business; significant liquidity created, business “hibernated” and units closed.
- Operating costs substantially reduced to reflect low levels of passenger travel during the second half; central and operational management skills retained to enable fast ramp up of the business as demand recovers.
- Agile response to increased demand over the summer; over one third (c. 1,200) units open by the year end; more flexible operating model deployed enabling sites to break even at lower levels of sales.
- Significant focus on cash; extensive action to reduce the cost base and preserve cash resulted in materially lower cash usage in the second half of the year than anticipated at the Interim results.
- Competitive advantages strengthened: client relationships extended and more flexible rent models agreed; brand ranges and menus optimised; customer proposition enhanced through digital technology.
- People and Corporate Responsibility strategies re-defined and being embedded.
- Positive long term travel trends; SSP poised to re-launch the business and take advantage of the future opportunities.
Recent Trading and Outlook: From very low sales in the third quarter of the year (93% lower year on year), passenger numbers increased gradually over the final quarter of the year and by the end of September were 76% lower year-on-year (averaging 80% lower year-on-year during the fourth quarter). In response to the recovery of the travel sector over the summer, we were able to open over one third of our units globally. Since the end of the year, the re-emergence of the virus and further lockdowns, notably in the UK and Continental Europe, have resulted in further volatility in passenger numbers. As a result we expect sales during the first quarter of the 2021 financial year to remain broadly in line with the final quarter of the year, approximately 80% lower year-on-year. This volatility is expected to continue through the second quarter of the new financial year.
Tags: SSP Group
