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SSP Upper Crust

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Upper Crust and Ritazza owner SSP Group has fallen to first-half pre-tax losses of £300m as the ongoing coronavirus restrictions wiped out revenues.

Sales in the six months ended 31 March 2021 collapsed by 79% to just £256.7m as passenger numbers at airports and train stations across the world remained subdued.

The group called its performance “resilient” in “a very challenging market”.

Since the end of the half, a further 250 of SSP’s units have reopened, taking the total number now trading to about 1,150. It expected to have between 1,200 and 1,500 outlets open over the summer as demand for travel returns.

There has already been a gradual recovery of passenger numbers as domestic and leisure markets returned, particularly in the UK and US as vaccination programmes led to easing of restrictions. However, there has been renewed restrictions in other parts of the world, most notably in India and Thailand.

Sales are currently down by about 70% compared with 2019, which is an improvement on a 81% drop in the second quarter and 79% in the first. Although, the group expected sales for the third quarter as a whole to be down 75% compared with 2019.

While the short-term outlook remained “highly uncertain”, SSP said it remained positive about a further upturn in domestic and leisure travel across the remainder of the current financial year.

“Looking further out, we firmly believe that demand for travel will return and that the actions we have taken, the strength of our balance sheet, our long-standing client relationships and deep understanding of the industry, together with the evolving market backdrop, will enable us to continue to take advantage of new growth opportunities as the market recovers.”

SSP predicted like-for-like revenues would return to pre-Covid levels by 2024.

CEO Simon Smith added: “Despite the challenging trading conditions SSP has continued to deliver strong operational and cash control. Our teams have continued to give their utmost during this period, and I would like to thank them for their commitment and dedication.

“The recovery in domestic and leisure travel has now begun in a number of our territories, and our teams are busy re-opening units in line with passenger demand.

“Over the past year we’ve strengthened our competitive advantages and created a more flexible operating model. 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.”

Shares tumbled 2.1% to 301.7p in SSP as markets opened this morning. The stock has made a solid recovery since the development of the vaccines, but is still a lomg way off its pre-Covid price of 557p.

Morning update

The European Commission has given Total Produce the all clear for its combination with Dole Food Company.

The fruit and veg supplier announced in February the move to create the largest fresh producer in the worl, with revenues of close to $10bn.

Once finalised, Total Produce plans to float the unified group in the US under the name Dole plc.

Following clearance from the European Commission for the deal – along with the expiration of a waiting period under the US antitrust laws – meant the transaction now remained in the hands of Total Produce shareholders.

Uncertainty continued to haunt markets, with the FTSE 100 opening down 0.3% to 7,075.23pts.

Early risers include Cranswick, Hilton Food Group and Compass Group, while fallers include Nichols, Ocado and Sainsbury’s.

Yesterday in the City

The FTSE 100 shrugged off worries about delays to UK reopening next month to rise 0.3% to 7,101.47pts yesterday.

Shares in British American Tobacco climbed 0.5% to 2,788.5p after the group upgraded full-year growth forecasts thanks to a stronger-than-expected performance by its portfolio of tobacco alternatives.

Other food and drink risers yesterday included Just Eat Takeaway, up 3% to 6,579p, packaging firm DS Smith, up 2.7% to 438p, Ocado, up 2.1% to 1,915.5p, and Marks & Spencer, up 2.1% to 164.3p.

Naked Wines, down 1.8% to 782p, Coca-Cola Europacific Partners, down 1% to €50.30, Premier Foods, down 0.9% to 109p, and Reckitt Benckiser, down 0.2% to 6,426p, were among the fallers.

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