Results for six month period ended 31 March 2022

Business recovering well, significant new opportunities ahead

SSP Group, a leading operator of food and beverage outlets in travel locations worldwide, announces its financial results for the first half of its 2022 financial year, covering the six months ended 31 March 2022.

SSP has had a good first half and revenues are recovering strongly as the travel sector rebounds. The actions taken during the pandemic to protect the business now leave it well positioned to capitalise on the many opportunities ahead.

Financial overview:

  • Revenue of £803.2m (2021: £256.7m), up 212.9% vs 2021 (back to 64% of 2019 level, i.e. pre Covid-19)
  • Underlying1 EBITDA2 of £14.7m compared to an underlying EBITDA loss of £110.3m in 2021 (both on a pre-IFRS 16 basis3)
  • Operating profit of £26.0m on a reported basis under IFRS 16, including credit for non-underlying items of £78.6m (2021: £219.9m loss on a reported basis under IFRS 16, including credit for non-underlying items of £6.7m). On a pre-IFRS 16 basis3, the underlying operating loss1 was £36.4m (2021: £160.7m loss)
  • Loss before tax of £2.3m on a reported basis under IFRS 16 (2021: £299.7m loss). On a pre-IFRS 16 basis3, the underlying loss1 before tax was £55.3m (2021: £182.0m loss)
  • Basic loss per share of 4.1 pence on a reported basis under IFRS 16 (2021: basic loss per share of 42.3 pence)4. On a pre-IFRS 16 basis3, underlying basic loss per share1 of 8.4 pence (2021: underlying basic loss per share of 26.1 pence)4
  • Free cash outflow of £30.9m (2021: outflow of £140.9m), after £41.9m capital investment to support the mobilisation of the new unit pipeline5
  • Net debt of £1,154.6m, which includes lease liabilities of £814.8m. On a pre-IFRS 16 basis3, net debt6 of £340.1m, up from £308.0m at 30 September 2021
  • Liquidity position strong, with cash and undrawn committed facilities of £606.9m7 at the end of March 2022, after repayment of the £300m borrowed under the Covid Corporate Financing Facility (“CCFF”)


Business highlights:

  • Strong recovery in revenue to 64% of 2019 levels in H1; further strengthening in the first six weeks of the second half to 83% of 2019 levels, as Covid-19 restrictions have been lifted, led by leisure travel in both the air and rail sectors and the return of commuters to the workplace
  • Disciplined and flexible programme of unit openings and closures in response to the highly variable levels of passenger demand during H1; with c.2,200 units currently open, representing over 80% of the estate
  • Continued focus on operating efficiency has enabled the business to deliver positive EBITDA in H1 and limit the profit conversion on the lower sales compared to 2019 to 22% of underlying Operating Profit (on a pre IFRS 16 basis)
  • High levels of contract retention, ahead of historical levels, underpinned by the strength of our client relationships, brand portfolio and operational performance
  • Mobilisation of new business pipeline continuing, with c.50 new units opened in the first half
  • Further new business won in H1 (c.80 units with estimated annual revenues of c.£75m), increasing the expected annual sales value of net gains since 2019 to c.£500m (from previously announced £425m), once fully mobilised over the next 2 years
  • Significant market growth opportunity globally, with the financial capacity to invest in organic and inorganic expansion of up to £425m-£475m under our Base Case scenario (up from £350m-£400m previously estimated) over the medium term
  • Further investment in the customer proposition, with the launch of several new innovative brands and concepts, as well as the accelerated roll out of order and pay digital technology across the Group
  • Embedding sustainability into the business, with great progress in the first half
  • The actions taken during Covid-19 to protect and strengthen the competitive position of the business, together with the opportunities we are now seeing, create a strong platform for long term sustainable growth and returns


Recent Trading and Outlook: 


The continued improvement in our trading performance in recent months has been encouraging, and has been driven by the rapid recovery in leisure travel, with business related travel recovering more slowly. The sales recovery is now closely following our Base Case scenario (as set out at the time of the Rights Issue in March 2021).


The second half has started well with sales strengthening further to an average of c.83% of 2019 levels in the first six weeks, led by Continental Europe and North America where revenues are back to well above 80%, driven by a very strong recovery in domestic and leisure demand. In the UK, sales are back to c.82% of pre Covid-19 levels, with the air sector boosted by strong leisure demand, and the rail business helped by the return of commuters in increasing numbers. In the Rest of the World, the picture remains more mixed with strong recoveries in the Middle East, India, Australia and Thailand being offset by very limited travel activity in China and Hong Kong, which we expect to continue in the near term.


Whilst there remains uncertainty in the outlook, including from Covid-19 and the current geopolitical and macroeconomic situation, we remain confident that we are well positioned for a strong summer period in our key markets, notwithstanding the short-term supply chain challenges being seen across the travel industry as it fully remobilises.


Our current expectation is for sales in the second half of the year to be around 80-85% of pre Covid-19 levels and for full year sales to be in the region of £2.0bn to £2.1bn. Whilst the final profit outturn will be dependent on a number of external factors, including the trajectory of the recovery and inflationary cost pressures, we would expect the full year EBITDA margin (on a pre-IFRS 16 basis)3 to be between c.5% (at the lower end of the sales range) and c.6% (at the higher end). This is consistent with the previously indicated range of 25% to 30% profit conversion on the reduced sales compared to 2019.

Our medium-term expectations for the recovery remain unchanged, which are for a return to broadly pre Covid-19 levels of revenue and EBITDA margins (on a pre-IFRS 16 basis3).


In addition to this, at the end of March 2022, the Group had a pipeline of c.230 secured new units, which it expects to open over the next 2 years, ultimately adding a further c.£300m of annualised sales. Including this unopened pipeline, the cumulative net gains secured since the end of the 2019 financial year are expected to add c.£500m to annualised revenue by 2025.


We believe that SSP is well-positioned to benefit from the recovery in the travel sector and we see many opportunities to drive growth.  Should the sales recovery continue to follow our Rights Issue Base Case scenario, we would have the financial capacity for an additional £425-£475m of capital investment to drive further business growth and expansion over the medium term.


Commenting on the results, Patrick Coveney, CEO of SSP Group, said:

“The business is recovering well from a hugely challenging period.  We have seen a significant rebound in trade since the impact of Omicron, with revenues currently running at over 80% of pre Covid-19 levels and with a similar proportion of our sites now open. I would like to thank all SSP colleagues for their dedication, resilience, and professionalism during the Covid-19 crisis, and for their contribution to delivering this robust first half performance. We are also grateful to our clients and brand partners for their support and commitment to SSP especially during the Covid-19 challenges.    

It has been immediately clear to me that I have joined a fantastic organisation that has done all of the right things during Covid-19 to protect the business, but, very importantly, is now taking the opportunity to strengthen the foundations of the business for the recovery. SSP has a number of fundamental strengths, including  very strong local business platforms around the world, industry-leading operational execution, as well as outstanding financial discipline. These attributes, alongside the quality and breadth of our brands and concepts, our digital platforms, client relationships and brand partnerships, give us the opportunity to accelerate our growth and expansion across the international travel markets. We anticipate a full recovery in leisure travel, which drives the majority of our business, and are confident that we are well positioned for the months and years ahead.”    


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1 Stated on an underlying basis, which excludes non-underlying items as further explained in the section on Alternative Performance Measures (APMs) on pages 21-24.

2 Underlying EBITDA (on a pre-IFRS 16 basis) is the underlying pre-IFRS 16 operating loss excluding depreciation and amortisation.

3 The Group adopted IFRS 16 ‘Leases’ on 1 October 2019 using the modified retrospective approach to transition. Following the year of transition, we have decided to maintain the reporting of our profit and other key financial measures like net-debt and leverage on a pre-IFRS 16 basis. Pre-IFRS 16 profit numbers exclude the impact of IFRS 16 by removing the depreciation on right-of-use (ROU) assets and interest arising on unwinding of discount on lease liabilities, offset by the impact of adding back in charges for fixed rent. This is further explained in the section on Alternative Performance Measures (APMs) on pages 21-24.

4  H1 2021 EPS has been restated to reflect the impact of the 2021 Rights Issue.

5  A reconciliation of Underlying operating loss to Free cashflow is shown on page 19.

Net debt reported under IFRS 16 includes lease liabilities whereas on a pre-IFRS 16 basis lease liabilities are excluded. Refer to ‘Net debt’ section of the ‘Financial review’ for reconciliation of net debt.

7  Available liquidity at 31 March 2022 has been computed as £606.9m, comprising cash and cash equivalents of £445.8m, undrawn revolving credit facility of £150.0m and other local government backed facilities of £11.1m.