Upper Crust owner continues journey to recovery as Omicron poses uncertainty

SSP Group has revealed sales at two-thirds of pre-pandemic levels as the travel catering giant’s recovery continues amid increased uncertainty due to the Omicron variant.

The FTSE 250 firm, which runs the Upper Crust and Caffe Ritazza brands, said that it is “still in the recovery phase” despite improving trends in recent months.

It told investors on Wednesday that sales over the first nine weeks of the current financial year have been at 66% of levels from the same period in 2019.

SSP added that around 72% of its sites, representing 1,950 units, have now reopened after being hammered by pandemic travel restrictions.

The hospitality firm said “a recovery in domestic and short-haul leisure traffic” has helped its revenues to rebound.

Nevertheless, it highlighted that there “remains some uncertainty in the immediate outlook over the winter months, particularly over the potential impact of the Omicron variant on travel restrictions”.

It added that it is however confident in its ability to manage near-term volatility and held firm on its medium-term growth forecasts.

It came as the company reported revenues of £834.2 million for the year to September, falling 41.8% against levels from 2020 and 70.1% against 2019.

The company saw its operating losses reduce to £309.2 million for the year.

The update also comes a week after the company revealed the planned appointment of current Greencore boss Patrick Coveney as its new chief executive officer next year, to replace departing CEO Simon Smith.

Jonathan Davies, deputy CEO and chief financial officer, said: “Though still in the recovery phase, SSP has made strong progress, particularly during the second half of the year, when we delivered positive underlying EBITDA and strong free cash flow generation.

“Against the backdrop of volatility and disruption in the travel sector, we’ve maintained strong operational controls and disciplined management of operating costs and cash flow, as has been evident from the financial performance of the business.

“Over the past year, we’ve continued to re-invest in and strengthen important areas of the business which we believe will underpin our long-term growth, including our customer offer, our people strategy and our technology platforms, and we’ve made real progress in further embedding sustainability into our business.”

Shares in the company were 2.4% lower at 227.6p.