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RNS Number : 2939N
SSP Group PLC
29 September 2021
LEI:213800QGNIWTXFMENJ24
29(th) September 2021
Pre-Close Trading Update
S SP Group plc ("SSP" or "the Group"), a leading operator of
food and beverage outlets in travel locations worldwide, issues a
Pre-Close Trading Update for the fourth quarter of its financial
year ending 30 September 2021, covering the period from 1 July to
30 September 2021. As reported at the Group's Interim results in
June, the business is benefitting from increased passenger numbers
across the travel sector. In the third quarter revenue improved to
27% of 2019 levels and in the fourth quarter is expected to be c.
47%, resulting in second half revenue of c. 37% of 2019 levels. In
the latest week, revenue was approximately 53% of 2019 levels.
As anticipated, domestic travel, which accounts for
approximately 60% of Group revenue, and leisure travel, also
approximately 60%, is recovering more rapidly than international
and business travel. The recovery in the fourth quarter has enabled
the Group to re-open c. 60% of its outlets, up from c. 30% at the
end of the first half of 2021, and it continues to open its outlets
selectively and in line with the recovery in passenger numbers.
Geographically, the stronger trading has been led by Continental
Europe and North America. In Continental Europe revenue in the
fourth quarter is expected to be c. 53% of 2019 levels driven by
the ongoing recovery in rail passenger numbers and increased air
passenger numbers over the summer holiday season. In North America,
revenue in the fourth quarter is expected to be c. 52% of 2019
levels reflecting the ongoing recovery in d omestic air travel. In
the UK, sales have continued to strengthen following the easing of
lockdown restrictions in July, led by the rail sector, and are
expected to be c. 43% of 2019 levels in the fourth quarter. In the
Rest of the World, where the vaccine roll-out has generally been
slower, sales continue to be impacted by lockdowns in some markets,
including Australia and Thailand, and in the fourth quarter are
expected to be c. 29% of 2019 levels.
We have continued to make further good progress on business
development in the second half, extending and renewing contracts as
well as winning new tenders to augment our existing strong
pipeline, including new business wins in the UK, France, India,
Malaysia, Thailand, China and Australia.
The Group continues to manage operating costs and cash flow
tightly. As a result of the improvement in sales over the summer
and the actions taken to manage profitability, the Group is
expected to deliver positive EBITDA in the final quarter and
broadly break-even EBITDA for the second half of the year (on an
underlying, pre-IFRS 16 basis). The second-half performance
reflects the disciplined management of the re-opening programme, a
simplified operating model with a lower and a more variable cost
base, including reduced or waived minimum guaranteed rents, and
lower overheads. In addition, the Group has been successful in
accessing further, significant, short-term government support in a
number of countries in Continental Europe , reflecting the
continued impact of the pandemic on the travel sector.
In the second half of the year, the Group is expected to
generate net free cash flow of c. GBP60m - GBP80m, principally due
to a strong working capital performance, driven by the recovery in
sales during the half, as well as securing further payment
deferrals. At 30(th) September, available liquidity is expected to
be slightly above GBP900m (including the proceeds of the April
Rights Issue and the GBP300m loan from the CCFF, which is expected
to be repaid in February 2022).
Outlook
The stronger trading and cash flow performance in the second
half of the 2021 financial year is encouraging and the medium-term
outlook of a return to pre-Covid levels of like-for-like revenue
and EBITDA margins by 2024 (as set out in the Base Case scenario in
the April 2021 Rights Issue) remains unchanged. However, the pace
of the recovery remains uncertain, and as a consequence, our
current planning assumption is for a slightly slower recovery in
sales during the 2022 financial year. Whilst we anticipate a return
to EBITDA profitability in FY2022 (on an underlying, pre-IFRS 16
basis), the out-turn will depend on a number of external factors
including the pace of the recovery, higher input cost inflation,
the impact of labour availability and the extent of government
support schemes. Reflecting this, our expectation for profit
conversion on reduced sales in 2022 compared to 2019 continues to
be at the upper end of a range of 25-30%.
With the travel sector now starting to recover, the Group
expects to commence the mobilisation of its secured pipeline which
is expected to generate an additional 10-15% of net contract gains
over the medium term and to utilise its significant financial
capacity to drive further business growth and to capitalise on the
recovery in the travel sector.
2021 Full Year Results Announcement
The Group's results for the year ending 30 September 2021 are
expected to be released on 8(th) December 2021.
CONTACTS
Sarah John, Corporate Affairs Director, SSP Group plc
On 29 September 2021: +44 (0) 7736 089218
Thereafter: +44 (0) 203 714 5251
E-mail: sarah.john@ssp-intl.com
Media enquiries
Peter Ogden / Nick Hayns
Powerscourt
+44 (0) 207 250 1446
E-mail: ssp@powerscourt-group.com
NOTES TO EDITORS
About SSP
SSP is a leading operator of food and beverage concessions in
travel locations, operating restaurants, bars, cafés, food courts,
lounges and convenience stores in airports, train stations,
motorway service stations and other leisure locations. Prior to the
onset of Covid-19, we served around one and a half million
customers every day at approximately 180 airports and 300 rail
stations in 35 countries around the world and operated more than
550 international, national and local brands.
www.foodtravelexperts.com
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