Upper Crust Owner's Sales On The Rise As UK Commuters Return To The Office
Britain's SSP, which is the owner of Upper Crust and other catering brands, has said that sales are recovering as people are commuting by train to work again after COVID-19 curbs hit travel and slowed growth at its airport and rail station outlets.
SSP, which also runs Burger King and Jamie Oliver chains in travel locations, said that its sales in the latest eight weeks to 30 January were at approximately 57% of 2019 levels, just before the pandemic hit Europe. However, they were down from the nine weeks before that when sales ran at 66% above 2019 levels.
Rise In Number Of Rail Passengers
The recent uptick in sales, following the lifting of restrictions in the UK and some European markets, was driven mainly by a rise in the number of rail passengers.
Underlying Core Profit And Net Cashflow
The London-listed firm, which operates in 36 countries, also said that it made an underlying core profit in the first quarter to December, while net cashflow was broadly neutral.
Analysts said that SSP is well placed to expand and take market share, while restoring margins, as leisure travel could recover fully even as business travel remains uncertain.
"The range of potential recovery outcomes seems very wide at this stage, which SSP now has the balance sheet to contend with," Stifel analyst Mark Irvine-Fortescue said in a note.
Rights Issue, Repaid Financing And Liquidity
SSP raised £450 million in a rights issue last April to see itself through the crisis. This month, it fully repaid £300 million in COVID-19 government financing, leaving it with £630 million of available liquidity.
Lengthy Period Of Making Losses And Return To Profit
The turnaround at SSP follows a lengthy period of making losses in the wake of the pandemic. The company returned to profit in the fourth quarter ending September of 2021.
Revenue And Profit Margins Expectation
SSP still expects its revenue and profit margins to broadly return to 2019 levels by 2024.