June 3, 2020 / 6:34 AM / a month ago

Travel food firm SSP boasts liquidity as virus harms sales

(Reuters) - British travel food group SSP (SSPG.L) said store closures due the coronavirus cut its first-half sales by up to 150 million pounds and swung it into a loss, but it had sufficient liquidity to ride out the crisis even if shops stay shut this year.

SSP, which operates food and beverage outlets in airports worldwide, launched a shares for dividend deal on Wednesday aimed at having shareholders reinvest this year’s payout of up to 26.8 million pounds in the company to enhance liquidity.

The company said sales at May-end were running about 95% below last year.

However, the Upper Crust and Ritazza owner has raised 550 million pounds from Britain’s emergency funding scheme and a share issue, sending shares up 3.5% at 316 pence by 1043 GMT.

It expects a monthly operating cash burn of between 25 million pounds and 30 million pounds by the final quarter if sales remain at current levels until the end of the financial year.

“We believe SSP is an attractive way to play the recovery in passenger air traffic,” Stifel analyst Mark Irvine-Fortescue said, adding that 750 million pounds of liquidity leaves it well positioned to trade through a slow recovery in travel demand.

SSP said it will look to reopen units selectively in larger multi-unit locations to ensure it can operate profitably even with lower footfall.

SSP posted an underlying pretax loss of 10.7 million pounds, for the six months ended March 31, compared to a profit of 54.2 million pounds last year.

It estimated that the pandemic reduced operating profit by around 65 million pounds.

WH Smith (SMWH.L), also a major travel retailer, said last month its revenue plunged 85% in April as sales at its airport and train station shops and kiosks were hit by travel restrictions.

Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shailesh Kuber and Angus MacSwan

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