Upper Crust owner SSP sees sales hit by travel restrictions

Upper Crust owner SSP on Wednesday warned sales have plunged as it made an unusual move and asked shareholders to reinvest this year’s dividend payouts into the company.

SSP, the operator of food and drink outlets at airports and train stations, has been hammered by coronavirus-induced travel restrictions.

The firm said it began to see a material impact on trading in its Asia Pacific division from the escalation of the virus in late January and throughout February. Trading then deteriorated rapidly across the entire group during March as the impact of the pandemic spread across the world.

As at the end of May, sales were around 95% lower than a year earlier. In the six months to March total revenues fell 3.7% to £1.2 billion.

SSP’s chief executive Simon Smith told the Evening Standard that the company will reopen some of its stores at London stations, including London Bridge and Waterloo, later this month. It wants to see what footfall and consumer demand will look like.

SSP had announced in February, before the pandemic escalated, it would pay a £26.8 million dividend.

Smith today said following talks with investors in recent weeks, SSP has asked shareholders if they would like to reinvest the payout in exchange for new shares in the business. The offer is open to retail investors too.

SSP said the proceeds from the placing will “further enhance the company’s cash and liquidity position”.

It raised £209 million through a March share placing and now has around £750 million in liquidity.

The FTSE 250 company said: “The impact of the virus has been significant, but we have taken all the appropriate actions to ensure that, even with extremely low sales, we have sufficient liquidity to manage through a prolonged crisis and slow recovery.”

It added: “Our focus now is to gradually re-open our business, operating units profitably and lowering our cost base, whilst ensuring the safety of our customers and colleagues. In time, we will seek out and invest in new long-term growth opportunities.”