Sales at travel specialist SSP Group have halved as a result of the Covid-19 pandemic and ‘effective shut down’ of the global travel market.
Like-for-like sales at the group, which operates Upper Crust, have fallen by 50.8% for the year ended 30 September 2020. However, this was slightly offset by net contract gains of 2.9%.
Revenue was down 47.9% to £1,433.1m at constant currency with a pre-tax loss of £425.8m on a reported basis. Underlying operating loss was £363.9m, including non-underlying net operating costs of £48.5m. This was in stark contrast to the £221.1m operating profit seen in 2019.
SSP Group had a good start to its financial year stating that it was on track to deliver ‘another excellent set of financial results’ with like-for-like sales growing. As the virus hit, it took ‘rapid and decisive action’ to protect its staff and preserve liquidity by ‘effectively hibernating the business’.
Like-for-like sales in April and May were approximately 95% lower than in 2019, and 90% lower in June. A limited return of short haul air travel over the fourth quarter saw gradual improvement with like-for-like sales around 80% lower than the previous year.
SSP expects sales for the first quarter of the 2021 financial year to remain broadly in line with this, at around 80% lower than the year before. This volatility, it added, is expected to continue through to the second quarter.
“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,” said SSP Group CEO Simon Smith.
He added that the business expects passenger numbers to remain subdued over winter but its optimistic that there will be a “significant upturn” in domestic and international travel as of 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.”