Upper Crust owner picking up crumbs as 700 sites remain closed
UPPER Crust owner SSP said it will take a £1.3bn sales hit in the second half of the year as the pandemic continues to cause a slump in overseas travellers and office commuters.
The firm, which operates cafes and restaurants at travel hubs around the world, said sales for the six months to Sept 30 are expected to be down by around 86pc compared with a year earlier.
Despite the significant sales drop, SSP said reductions in rental and labour costs meant that its earnings forecast remained broadly in line with that set out in June. SSP said it expects to report an operating loss of between £180m and £250m in the second half.
SSP revealed it was cutting up to 5,000 jobs in July as it rushed to shore up cash in the face of plunging passenger numbers at railway stations and airports. Before the pandemic hit, the company employed about 40,000 staff worldwide with around 9,000 in the UK.
The latest government advice for people to work from home if they can is likely to deal a further blow to SSP, just as workers were beginning to return to offices. SSP said it has reopened a third
‘Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses’
of its 1,100 outlets since the outbreak first hit, an improvement on its forecasts in July when it anticipated that just a fifth of its sites would be open by the autumn. Sales have also seen a slight improvement over recent months, driven by increased demand at its rail business in continental Europe, where sales are around 66pc lower. Sales have remained between 80pc to 85pc lower in the UK, North America and the rest of the world, SSP said.
Simon Smith, chief executive, said: “Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses. It is with regret that the prolonged nature of this crisis has resulted in us having to restructure and make considerable job losses in order to protect the business. These are always extremely difficult decisions, and we are supporting our colleagues throughout this process.
“In the medium term we expect to see the gradual return of passenger travel to more normalised levels.”