The SSP Group forecasts an 86% decline in revenues in the second half of the fiscal year.
According to the catering company, sales have recovered since the stores reopened.
The British multinational is forecasting a £1.3 billion drop in revenue in the second half of the year.
In an announcement made on Wednesday, SSP Group plc (LON: SSPG) said it saw signs of a recovery in weekly sales after reopening some of its stores to the public as the government eased COVID-19 restrictions. For the second half of the year as a whole, however, the company continues to forecast a massive 86% decline in sales.
SSP had expressed plans to reduce its UK workforce by 5,000 jobs in July, which are attributed to the COVID-19 restrictions.
SSP stated that its weekly revenue in the fourth quarter was still 76% lower year-on-year, but showed a significant increase compared to the third quarter. The recovery in sales is more pronounced in Continental Europe. The company’s overall financial performance, however, was adversely affected by weakness in North America, the UK and several other regions.
CEO Simon Smith’s comments on Wednesday
According to CEO Simon Smith:
“We have seen some improvement in passenger demand since the beginning of the crisis and in response we have reopened our units quickly and profitably, with more than a third of our units now in operation”.
The catering company, which operates in 36 countries and has sales outlets in train stations and airports, said it expects to consume significantly less cash in the second half of the year than it estimated at the beginning of 2020. SSP was confident that passenger numbers would improve in the medium term.
In terms of revenue, however, the British multinational predicts a £1.3 billion decline in the second half. Its operating loss according to SSP will be in the range of 180 to 250 million pounds sterling in the second half of the year.
Britain to impose new restrictions on travel and leisure
However, as new COVID 19 cases resume in the UK, Prime Minister Boris Johnson is expected to impose new travel and leisure restrictions in the coming months.
The company’s shares opened around 5% on Wednesday and rose by a further 6% in the next hour. At 200 pence per share, the owner of Upper Crust and Café Ritazza is now 70% below the previous price level on the stock exchange. Confused about choosing a reliable stockbroker for online trading? To make it easier for you to choose, here is a list of the few top brokers.
At the time of writing, SSP Group plc is estimated at £1.08 billion and has a price-to-earnings ratio of 15.38.