Upper Crust owner hit by £300m loss on back of Covid travel slump

The owner of Upper Crust and Caffè Ritazza slumped to a pre-tax loss of almost £300m in the six months to the end of March, as Covid restrictions kept customers away from its outlets in airports and railway stations.

SSP Group operates its food and beverage branches in 35 countries, and its sales of takeaway sandwiches and coffees plunged by 79% to just under £257m, down from £1.2bn a year earlier.

SSP said the easing of lockdown restrictions in the UK and US had led to an improvement in trading since the end of March, due to higher customer demand as more people began to travel for leisure. However, its sales in the first week of June remained 70% lower than the same period in 2019.

The company has reopened a further 250 units since the end of March, taking the total of trading outlets to 1,150, representing only 40% of its 2,800 branches worldwide.

SSP intends to have reopened up to 1,500 outlets in the summer, as it anticipates a recovery in customer demand.

Despite the London-listed company’s expectation that domestic and leisure travel will continue to recover during the rest of the year, it does not expect its like-for-like revenues to return to pre-Covid levels until 2024.

In other parts of the world, new travel restrictions in countries including India and Thailand, which have been dealing with new waves of coronavirus infections, have affected SSP’s trading.

Simon Smith, the chief executive of SSP Group, said: “The recovery in domestic and leisure travel has now begun in a number of our territories, and our teams are busy reopening units in line with passenger demand.

“We have a strong balance sheet and can see many opportunities to accelerate growth as the market recovers and to deliver sustainable growth for the benefit of all our stakeholders.”

The company said its performance had been “resilient” in a challenging market, and said its financial position had been strengthened by a recent rights issue, leaving it well placed to benefit from the post-pandemic recovery expected in the travel market.

SSP’s journey back to health is likely to be lengthy, said Susannah Streeter, a senior investment and markets analyst at the broker Hargreaves Lansdown. “The working from home trend shows no sign of fully reversing and the captive commuter market is at risk of evaporating long-term. With footfall across rail and air networks likely to stay subdued for much longer, and material uncertainty hanging over the group, auditors have cast doubt on its ability to continue as a growing concern.”

Shares in travel companies rose on Wednesday morning after the EU parliament approved the use of vaccine passports to enable international travel within the bloc during the summer.

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